Right, if you remove the political ambiguity, and thus ask specific and direct economics questions, you will probably get a similar failure rate. Since after all, these students were not required to take econ courses as part of their degree.
But when you ask these questions of Joe the Plumber on his way out of Wal-mart, he won’t be able to answer them either. What you’ve done is show that both students and laymen without economics training fail to answer economics questions. The same way if I asked the difference between mitosis and miosis I’d get failure from both groups.
It’s also why I used the “objects of different mass fall at the same rate” statement. It generate the same sort of thought process as these 8 questions. An idiot has observed two objects fall and noted they fell at different rates so the statement is false. And an educated person would say something along the lines of, “that’s only true in a vacuum, real life doesn’t have a vacuum, so the statement is false.”
What is interesting about this study is that the author phrased the questions in such a way that educated individuals were guessing wrong, but completely uneducated individuals were guessing right. Hence the title of the study.
It’s also why Sam Stone’s example was good: Increasing taxes decreases revenue.
Educated conservatives would tend to erroneously agree with this statement, while uneducated individuals would tend guess correctly since more taxes means more money.
The authors targeted a group they knew trended liberal, and baited them with questions they knew liberals would answer wrong.
Definitely trolling, but a rather crafty execution.
No, that’s not what I said. I believe the students would do quite a bit better if the questions weren’t so loaded. This doesn’t necessarily make them more “enlightened” because they very likely will answer the loaded and the abstract questions differently. I think it would tell us at what point people are uncritical of their own beliefs.
Professional economists are occasionally no better at this than Joe the Plumber.
You make a good point, the authors even comment on this. But I don’t think the recent recession shows a flaw in the economic principles, but rather how they are applied. The same way a bridge can collapse. It’s not because engineering professors put a slant on their lectures. It’s because there is a degree of interpretation of how the principles should be applied.
“Minimum wage laws raise unemployment”
If that was an engineering question, analysis of it would involve breaking it down into its component principles:
what is the current actual minimum wage
what is the proposed change
how would that change labour costs
how much profit is available to respond to an increase in labour costs, if there is sufficient profit the company could possibly absorb the increased cost. If they are already a zero profit, increased labour costs mean decreasing the number of workers.
what is the current unemployment, how much more is acceptable,
what is the cost associated with increased unemployment
If someone was to totally botch one of those 6 questions, the whole thing collapses, like a bridge with one bad gusset plate.
Not meaning to suggest that no such study as economics exists, but wondering how much of what we have here as accepted orthodox economics is suspect, due to political influence. Or, more correctly, the influence of a preferred political philosophy and the need to validate that philosophy.
For instance, the questions you outline above are entirely sensible questions. A practitioner of Marxist economics would likely ask very similar questions, just transposed into the key he sings in.
Its nearly impossible to imagine that such influences from the business community and the wealthy don’t have some influence, the question is how much, how significant? No idea what metric one might apply.
I think we’re saying similar things, although what you seem to be characterizing as “politically loaded,” I would characterize as “value judgments.” But, my point is that a statement such as “People in third world countries are paid less than their marginal products” is a statement of economics that lends itself to economic analysis whereas a statement about “exploitation” is dependent on how you choose to define exploitation. While many people would choose to define a worker who is being paid less than his marginal products as being exploited, a number of people, for ideological reasons do not chose to define the term that way, and I believe the authors of this study fall into that group.
What you are saying doesn’t make sense. “Marginal product” is the additional output produced by adding one additional unit of labor. As you add workers overall production per worker increases to a point and then begins to decrease as they start to get in each others way and create bottlenecks. You wouldn’t use marginal product to determine the fairness of wages. You use marginal product to determine the number of workers that maximimizes production.
I don’t see what the price of the products produced has anything to do with whether a worker is being “exploited”. Exploitation is about working conditions and economic freedom.
I’m not using it to determine the fairness of wages (since fairness is again a value judgment). I’m saying that you can analyze the statement as a statement of economics (which you then proceeded to do). I have made exactly 2 statements about “fairness” in this thread: (1) that the concept of fairness (or exploitation of whatever) is a value judgment and that (2) the fact of being paid a wage, any wage, doesn’t indicate by itself whether the wage is “fair” or “exploitative.”
This is my point. What exactly is “exploitative” is defined by which metrics you chose to look at, which is a value judgment. You have defined “exploitation” to be about working conditions and economic freedom. I think those are acceptable metrics to look at, but I don’t think they’re necessarily the only metrics to look at.
ETA: I read the use of “marginal products” to mean that the employee is not being paid enough to compensate for the additional value of his output (which, remember, that’s not my phrasing).
Gotta work. I’m out for a few days. If anyone doesn’t agree with me that some of these statements are value judgments rather than clear statements of economic principle, we’ll have to agree to disagree.
One of the most basic findings of the neoclassical wage labor model is that workers are paid their marginal products. This is what allows labor markets to clear in models of perfect competition. I hate to cite wiki, but:
I’m not a labor economist, but am not entirely unfamiliar with labor models. Some of the assumptions are obviously abstract and not wholly reasonable. But the idea that workers are paid their marginal products is anything but crazy.
I like your approach. The problem I’ve always had with the “minimum wage increases cause unemployment” meme is that it assumes that the employer had too many workers in the first place. If he’s an efficient employer, he already has the minimum number of employees.
It’s perfectly reasonable. I just don’t understand what it has to do with exploiting workers.
Minimum number of employees to do what? Production isn’t fixed. Potential revenue isn’t fixed. When you increase minimum wage, you increase employers costs. If the marginal costs of hiring another worker is greater than the revenue that worker will produce, it’s not worthwhile to hire them. The employer will turn away potential work, decreasing overall production, because it isn’t cost effective to take that work on.
The problem I have with this logic is that it assumes that the right number of workers is a constant, and does not change with labor costs. This is clearly not true.
Let’s try a simple example. You’re running a McDonald’s, say. Your employees make minimum wage. That wage goes up by law. What happens? Are you going to cut production? Not really an option in a fast food joint. Are you going to cut back on employees? If the answer to that is yes, then the logical question is why do you have excess employees in the first place? If you could get by without them, you already would be. So the only alternatives left to you are raising prices or decreasing profits, neither of which is going to raise unemployment.
In fairness, yes it can - if the resulting increase in fast-food prices drives marginal consumers out of the market, then volume will decrease and the demand for employees will decrease as well. But not if the consumption curve is so inelastic that there’s no change over that price range, which might be the case.
Kneel before me! Well, except for the McCain bit, but I can’t vote.
Yep… and that goes for his OP too.
This is certainly true. In fact, speaking for myself, I see minimal differences in economic and fiscal performance regardless of which party is in control of Congress, so I base my political support largely on candidates’ social policy positions.
Good point. But it’s worth noting the same logic when people try to claim that Fox News viewers are more ignorant than viewers of other networks. In that case too, the result is derived by focusing specifically on right-wing nonsense, versus asking about left-wing nonsense.
I see your premise above has gotten support in this thread, and yet the Fox stuff gets trotted out all the time here.