Rich suggested this topic. I wish I had, because I think it is one of our most important topics in years. The way basic, introductory-level economics has been abused to make bad national policy has been a pet peeve of mine for many years.
Sure, all rhetoric in politics is kept sound bite and bumper sticker-friendly. (Not to a fourth grade level like Trump’s rhetoric, perhaps, but still.) And, everybody does it. “Our borders are unguarded/open.” Liberals aren’t patriotic. Neoconservatives love war.
But, when it comes to rhetoric –and policy, too – concerning economics, something much, much more pernicious goes on. It has been called the problem of “Econ 101ism” or “Economism.” Economism, to quote the coiner of the term, is “the misleading application of basic lessons from Economics 101 to real-world problems, creating the illusion of consensus and reducing a complex topic to a simple, open-and-shut case.” For years I’ve seen way too many politicians (and their pundit and journalist enablers) use over-simplified – and thus often inaccurate – Econ 101ism as a kind of Gospel that fully explains how the world really works. They use its “lessons” to show what correct government policy has to be and anybody that disagrees doesn’t understand economics.
Everybody does Economism sometimes. Liberals sometimes indulge in it when thinking and talking about international trade and, less often IMO, about macroeconomics (govt spending levels). But, as the articles below explain better than I will on Monday, there is something about Econ 101’s easy, breezy, oversimplified analysis of how markets work that easily seduces conservatives. All those pretty supply and demand curves leading to ideal equilibriums without ever a need for government interference.
Again, I don’t mean this topic to be about economic polices and rhetoric that I think are wrong. I mean it to be about those that are wrong for one particular reason: They are based on a belief that the highly simplified textbook explanations of how markets work should tell us all we need to know about what policies should be. Econ 101ism, to me, is too often a shield for preferences that based on other things, like ideology and moral beliefs. .
I’ve tried to keep the linked readings fairly easy and, well, breezy. They oversimplify, too, but get the idea across.
DISCUSSION QUESTIONS –
- What does Econ 101 teach about how markets and govt interference in markets work? What important things does it gloss over?
- In what big ways can well-meaning political advocates misinterpret the lessons of Econ 101?
- How do the lessons of Econ 101 get misused by politicians; i.e., what is Economism?
- What are some good examples of Economism in action on the Right and Left?
–> In tax policy? Financial regulation? Trade? Wages and labor markets? Health care? Education?
- How can seductive rhetoric based on Economism be effectively countered?
- What’s the “other side” POV here? Is Econ 11ism not a big thing?
SUGGESTED BACKGROUND READING –
Conservative use of Econ 101ism –
- Easy to understand explanations:
- Example: If my life depended on it I couldn’t invent a better example of Econ 101ism than this Forbes article.
- Also FYI, markets don’t and can’t exist for many important things.
Liberals use of Econ 101ism –
- Liberals are wrong to cry Econ 101ism. Read this conservative POV.
Paul Krugman goes after Bernie Sanders’ agenda.[Update: Oops, it has nothing to do with Econ 101-type criticism.]
- Free trade has not driven U.S. job losses. (FYI there is another POV.)
Special Topics in Econ 101ism –
NEXT WEEK: What beliefs have you changed since you were young?