09 May 2010

Education, Ideology, and Economics

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Zeljka Buturovic and Daniel B. Klein just published a study of the correlation between an elementary understanding of economics and people’s levels of education and political ideologies.

The 8 simple questions used as measuring sticks of “economic enlightenment” were:

1. Restrictions on housing development make housing less affordable.
• Unenlightened: Disagree
2. Mandatory licensing of professional services increases the prices of those services.
• Unenlightened: Disagree
3. Overall, the standard of living is higher today than it was 30 years ago.
• Unenlightened: Disagree
4. Rent control leads to housing shortages.
• Unenlightened: Disagree
5. A company with the largest market share is a monopoly.
• Unenlightened: Agree
6. Third-world workers working for American companies overseas are being exploited.
• Unenlightened: Agree
7. Free trade leads to unemployment.
• Unenlightened: Agree
8. Minimum wage laws raise unemployment.
• Unenlightened: Disagree

They found that education produced only a slight difference in economic enlightenment, but that political ideology produced far more significant differences.

(Although the authors note that none of the questions actually challenge conventional conservative positions, they) think that the measurement as-is captures something real. At least since the days of Frédéric Bastiat, many have said that people of the left often trail behind in incorporating basic economic insight into their aesthetics, morals, and politics. We put much stock in Hayek’s theory (Hayek 1978, 1979, 1988) that the social-democratic ethos is an atavistic reassertion of the ethos and mentality of the primordial paleolithic band, a mentality resistant to ideas of spontaneous order and disjointed knowledge. Our findings support such a claim, all the caveats notwithstanding. Several of the questions would seem to be fairly neutral with respect to partisan politics, particularly the questions on licensing, the standard of living, monopoly, and free trade. None of those questions challenge policies that are particularly leftwing or rationalized on the basis of equity. Yet even on such neutral questions the “progressives” and “liberals” do much worse than the “conservatives” and “libertarians.”

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