So says this PDF study published in Econ Journal Watch, which is a peer-reviewed journal of academic economics.
There are some caveats to the basic claim, chief among them:
That is, they have a number of questions that pit leftist ideas against well-established economic principles, and have seen that more leftists fail to grasp the economic principles, and thus conclude that leftists don’t understand basic economics. But they fail to also craft questions that pit right-wing ideas against economic principles, so it seems to me that what the study has really proved is simply that leftists are more prone to choose left-wing ideology over basic econ principles than right-wingers are prone to choose left-wing ideology over basic econ principles.
I don’t think that’s a surprise.
Anyway, I’m by no means an economics maven, so I thought I’d get feedback from the crowd here.
I’ll confess to not having read the article, but one of the problems I can see from the start is that “well-established economic principles” aren’t scientific truths. As a left leaner, I think some of the basic principles of the market economics that dominates the subject are incorrect premises. Doesn’t mean I don’t understand economics.
This study does offer evidence that there’s widespread economic illiteracy, but I don’t think you’d want to try to draw any other conclusions from it, for all of the reasons that they mention.
Interesting results, They coulda made the right look bad by asking about Laffer curves.
That said, it’s not surprising to me that there’s a lot of ignorant lefties out there.
Bricker, your title does not match your OP. You might want to consider requesting a change to something more content-related and less, shall we say, inflammatory.
Self serving claptrap. I read the study up to and including the 8 questions presented. I noted the weakness of the eight questions and to be fair the authors acknowledge the weakness of the questions and then precede to hand wave those objections away. This is especially troubling when their hand waving contains misleading justifications. Of the 8 questions, nearly all are arguable, and none are written in such a way as to make a binary (yes I know the authors gave a scale, they also went on ignore it in drawing conclusions) response absolute in determining base knowledge.
Restrictions on housing development make housing less affordable.
• Unenlightened: Disagree
It’s possible even under standard economic analysis that restrictions on housing development can make housing more affordable. If developers, for example, are prevented from tearing down low income housing and replacing it with McMansions, they may instead chose to rehab the low income housing, increasing the overall rental supply, those lowering costs.
Mandatory licensing of professional services increases the prices of those services.
• Unenlightened: Disagree
This is probably true, though I don’t think the link is as direct as the neo-liberal economists would have us believe.
Overall, the standard of living is higher today than it was 30 years ago.
• Unenlightened: Disagree
Stupid question. They should talk about real income per head. Thinking that the stadnard of living has fallen may simply reflect a belief that non-financial factors should be included in such a calculation. Earning more money and being required to spend it on child care, for example, doesn’t necessarily reflect a higher standard of living in a true sense, though it would in a neo-liberal economic sense.
Rent control leads to housing shortages.
• Unenlightened: Disagree
This I agree with.
A company with the largest market share is a monopoly.
• Unenlightened: Agree
No problem with this one.
Third-world workers working for American companies overseas are being exploited.
• Unenlightened: Agree
There isn’t a yes or no answer to this. It’s perfectly possible to understand economics and answer it as yes - especially if one believes the entire capitalist wage and employment structure by definition includes exploitation and the production of surplus value.
Free trade leads to unemployment.
• Unenlightened: Agree
Once again, there is no link between believing this and not understanding economics. Free trade can lead to unemployment - that it is a boon to the economy is an assertion by free marketeers, not a proven fact.
No evidence this happens that I have seen. The authors of the questions appear to believe that answering based on the real world, rather than the answers in an economic test-tube, means you don’t understand economics.
Funny thing, according to that quiz, I’m 100% enlightened, but I can see nuances that might make the “unenlightened” answers correct, at least in limited, short-term situations.
I’m a Canadian moderate, incidentally. I understand according to some people on this board (let along the right-wing blogosphere and Limbaugh-land), that makes me a communist, or something.
Oh please! This study shows tons of things. Born again Christians are more economically literate than non-born agains. NASCAR fans are more likely to answer these questions “correctly” than those who aren’t fans. People who shop at Wal-Mart every week are the most economically aware of the whole spectrum of Wal-Mart shoppers and those who spurn Wal-Mart.
And my personal favorite. Protestants are more economically savvy than Catholics, but Atheist/realist/humanist have all the polled faiths beat by a large margin.
Can anyone come up with a cite that proves that this is unequivocally true in all cases, and is a basic “truth”? If not, then the only thing this survey has shown is that left-leaning people disagree with right wing economic dogma that is continually repeated with no basis in fact.
The questions seem to focus on areas where mainstream economics conflicts with left-wing ideology. It would be quite easy to construct questions that do the opposite: say on deficit spending during recessions, or Pigouvian taxes to tackle global warming. Such a study would probably find that the more right-wing your are the less economics you know. IOW this study isn’t well-designed and doesn’t really prove much.
Given the significant flaw in this study that even the authors acknowledge and that the OP highlighted, I don’t see that it tells us anything useful. As the OP noted:
Obviously political ideology is going to affect your worldview, which will come through in economics. But I’m sure you could do the exact opposite with conservatives and get the same results.
Tax cuts result in higher revenues
The American health care model is the best model for business
Environmental degradation in China results in the loss of over 5% of GDP a year
America has one of the highest effective corporate tax rates in the west
Due to our free market mechanisms increasing efficiency and quality, people from Canada and Europe come to the US in droves to enjoy our health care system
Conservatives would likely get all those questions wrong.
Of the 8 questions in the study, the answers really are not cut and dried.
“Overall, the standard of living is higher today than it was 30 years ago.”
How do you define standard of living? We have more cars and our cars are better. However health care is more unreliable and insecure. Jobs are harder to find. Thirty years ago one wage earner could support a family, now it takes two.
I don’t see how you can have a cut & dried correct answer for that question.
“Third-world workers working for American companies overseas are being
exploited.”
Again, which companies, which third world countries and who defines exploitation?
With respect to the costs of licensing, the effect is stunningly direct. It could not possibly be more direct. It’s the potential benefits that are more murky and indirect.
The benefits of professional licensing, and whether they are enough to justify the very direct costs, are the open question. But there is no real evidence that those benefits even exist–relative to the level of incompetence we experience even given this sort of regulation–let alone outweigh the very real cost to customers of licensing requirements. There are a lot of ridiculous, or merely ambiguous statements, in this survey. This is not one of them. It might be worth it because of the indirect benefits (I’m inclined to think so, if the regulation is well designed–which it typically is not), but there’s simply no doubt that licensing raises costs. But frankly, I find even the most rah-rah free marketers are strangely silent on the costs of this government regulation, if they happen to personally enjoy the fruits of the restriction in supply from licensing procedures. To pull an example completely at random: if they happen to be lawyers.
Most of the other questions in this survey are not nearly so clear.
I can point you to the Card and Krueger study (1994) that found no relationship between an increase in the minimum wage in 1992 in New Jersey and unemployment. It’s come under some fire, though, so I’m not sure how reliable it is.
But even in theory, it can go further than that. If you’re dealing with labor market under a monopsony (or potentially under employer-collusion situations that resemble monopsonistic conditions), an increase in the minimum wage will increase the number of jobs up to a certain point. It is true, however, that a minimum wage that is high enough will eventually cause unemployment. The question is whether most US labor markets are near that condition. And for this monopsony exception alone, the minimum wage question was a poor choice.
While I don’t have any argument with questions 1-5, but 6 and 8 are problematic at best, and 7 is wrong.
Plenty of instances of things I’d consider exploitation of third-world workers working for American companies have been documented. So absent a modifier of ‘some’ or ‘all’ or ‘most’ before ‘third-world workers,’ ISTM that the respondent is being given overmuch freedom to insert a modifier in his mind has s/he answers the question.
Yes, free trade causes unemployment. The literature is filled with specific examples of free trade enabling jobs to be moved overseas, leaving very specific people unemployed in America. So it’s inarguable that free trade causes unemployment. It’s a fact.
But it also creates jobs, and the overall effect is that free trade creates more jobs than it destroys.
But they didn’t ask whether free trade raises unemployment. They apparently meant to, but didn’t.
Whether minimum wage hikes increase unemployment depends on the existing minimum wage, the size of the increase, and the distribution of where the money’s coming from to fund the increase.
If you’re giving a wage hike to people whose wages are so low that they’ve got little choice but to spend every dollar they make, then every dollar that goes into that wage hike will have a very nice multiplier effect as it moves through the economy, generating new demand and creating new jobs. And this can potentially outweigh the jobs lost because some employers can’t afford to pay as many employees the new minimum wage.
Because that’s the other factor: what proportion of workers employed at minimum wage (or between the old and new minimum wages) work for employers who are just getting by, and would really have to cut jobs if the minimum wage goes up, and what proportion of such workers work for employers who might have to reduce the next couple of dividends by 25¢?
The higher the ratio of the latter to the former, the fewer jobs will get lost upfront as a result of the minimum wage hike (and the less the spending being displaced by the minimum wage hike will be), and the more likely the jobs created by the stimulative effect of that money being unlocked.
So even aside from this survey’s bias in terms of only questioning lefty orthodoxies, there are real problems with the questions here, and it doesn’t even measure its one-sided measurement very well.
I look forward to future threads involving economics when a conservative says, “I remember a study recently that showed liberals don’t understand economics.”
I also look forward to laughing at that person. Not because he/she is conservative, but because he/she will have demonstrated a lack of intelligence.
But to the study: This shit is funny. The authors refer to a state of “enlightenment.”
“Our data indicate that Americans of the sort to participate in such a survey, those
who are college-educated are no more economically enlightened than those who
are not.”
Essentially, they didn’t find that college educated respondents knew more about economics. Then they go on to blame centrists (liberal) professors!
So with all due respect, the title of this thread is misleading and needs to be changed to:
Study says: the more you lean left, the less economically enlightened Buturovic and Klein think you are.
Ha, I also just realized it’s not just “liberal.” The study also found that the more “african-american” you are the less you know about economics.
Now THAT’S an edgy thread title.
Those that voted for Obama got 4.59 of the questions wrong, African American 4.26.
The study also finds that viewers of NASCAR are more economically enlightened than non-viewers. And those that shop at Wal-mart more economically enlightened than those that don’t.
It also found that the lower a person’s income, the higher they scored!
So to sum up: The group most economically enlightened are Asians, that voted McCain (or Barr), obviously don’t consider themselves latino, live in the suburbs, are atheist, married, fans of NASCAR, not an investor, shops at Wal-mart, and earns less than $50k a year.
If I make up a bunch of questions about negative externalities, the Tragedy of the Commons, etc, so that the “enlightened” economics answer runs counter to naive right-wing views, can I publish a study about how the more left you lean, the more you know about economics?