Economic Literacy?

Are You Smarter Than a Fifth Grader?
by John Stossel

GMU Economist Dan Klein, who introduced me to Hayek’s spontaneous order with a wonderful essay he called Rinkonomics, today writes that: “The left flunks Econ 101.”

Klein and a Zogby researcher reviewed 4,835 people’s answers to eight simple economic principles, like:

“‘Restrictions on housing development make housing less affordable.’ People were asked if they: 1) strongly agree; 2) somewhat agree; 3) somewhat disagree; 4) strongly disagree; 5) are not sure.”

This seems like a no-brainer. Restrictions make anything less affordable. Yet the: “percentage of conservatives answering incorrectly was 22.3%, very conservatives 17.6% and libertarians 15.7%.

But the percentage of progressive/very liberals answering incorrectly was 67.6% and liberals 60.1% ...

The other questions were:

1) Mandatory licensing of professional services increases the prices of those services (unenlightened answer: disagree).

2) Overall, the standard of living is higher today than it was 30 years ago (unenlightened answer: disagree).

3) Rent control leads to housing shortages (unenlightened answer: disagree).

4) A company with the largest market share is a monopoly (unenlightened answer: agree).

5) Third World workers working for American companies overseas are being exploited (unenlightened answer: agree).

6) Free trade leads to unemployment (unenlightened answer: agree).

7) Minimum wage laws raise unemployment (unenlightened answer: disagree).”

Please. These are obvious. Who could get these wrong? Sadly, lots of people.

“Those responding . . .
Democratic averaged 4.59 incorrect answers.
Republicans averaged 1.61 incorrect, and
Libertarians 1.26 incorrect.”

No wonder America is on a Road to Serfdom.

“Governmental power joined with wrongheadedness is something terrible, but all too common. Realizing that many of our leaders and their constituents are economically unenlightened sheds light on the troubles that surround us.”

Source: From John Stossel's section on Foxnews.com. John Stossel's Take. June 8, 2010 01:12 PM UTC