Most college students who take an introductory economics course will not take another course on the subject ever again—and, perhaps more importantly, they’ll leave said course with a more negative view of economics than when they entered. As Charles Wheelan wrote in his 2002 bestseller Naked Economics, “most bright, intellectually curious college students suffer through Econ 101, are happy to pass, and then wave goodbye to the subject forever.”
It’s no secret—and thus an even bigger shame—that the greatest opportunity students have to gain some basic knowledge of this indispensable topic is wasted on teaching models and theories in an incomplete, out-of-context, and ultimately inadequate way.
Let’s consider some examples.
The model of a “perfectly competitive” market is a valuable model to be sure, but introductory economics courses have a tendency to only tell half the story. For some, that means introducing the concept with the example of a farmer, leaving out the fact that the majority of today’s agriculture is subsidized by governments across the globe. (The U.S. spent approximately $20 billion on farmer subsidies in 2012, the E.U. paid out about $53.85 billion in 2010, and Japan has been paying its farmers nearly $50 billion every year since 2009.)
For others, that means a flawed introduction of “the market” itself. Most present “the market” as being the essential—indeed, only—venue for all economic transactions, implying that businesses are responsible for the near-entirety (if not all) of our country’s commodity and employee demand.
Senator Ted Cruz recently capitalized on this kind of thinking in his criticism of a recent NBC/WSJ poll, which reported a record-setting low in GOP approval ratings. In his critique, Cruz argued that the poll was obviously skewed, since “20 percent of the people polled were government workers,” and of course “the people who work for the government” would be upset with something like, you know, a government shutdown. But since they were overrepresented in the poll, these figures were clearly not reflective of the country’s true sentiment.
It’s a fairly compelling argument, until you realize that approximately 17 percent of working people are in fact employed by the government. But you’d never know that from Econ 101.
Then there are price floors like the minimum wage. The minimum wage is necessarily bad for the economy, the curriculum generally implies, because it’s higher than the “equilibrium wage,” and therefore causes a surplus of workers to enter the market yet be left unemployed. It suggests that the minimum wage is too high and that, indeed, shouldn’t exist at all, because “the market” can produce a far better decision than legislators can.
It would therefore seem like raising the minimum wage to $10 or $12—a move that many state, local, and even our federal government are now seriously considering—would be a terrible idea, as it would cause unemployment to rise and business to fall. But as recently as this year, UChicago’s Booth School of Business found that approximately 40 percent of the world’s leading economists don’t actually believe that would happen, with another 22 percent saying they’re “uncertain.” More than that, these experts agreed by a nearly four-to-one margin that the benefits of raising and indexing the minimum wage would outweigh the costs.
Likewise, the Laffer curve, which illustrates the relationship between taxation and government revenue, was the darling—perhaps even defining—arc of the Reagan administration. Despite having both theoretical and practical applicability, it’s also heavily disputed and taught in a vacuum in most (if not all) introductory economics courses.
I find it exceptionally challenging to think of a single other discipline eager to teach such controversial concepts to impressionable, first-time (and far too often, “last-time”) students, particularly without the context necessary for students to fully grasp the real-world applicability of what they’re learning.
To be sure, the modeling that goes into understanding price floors and ceilings and taxes all carry great educational value, and should by no means be stripped from introductory courses. But much as we should expect from any other models of comparable controversy, they should never be taught in a vacuum as they are, for the most part, today—the sorts of vacuums that imply these models are facts simply because no information has been introduced to suggest otherwise.
Instead of preparing students with a comparative and inclusive discussion that compares the minimum wage to inflation and other important metrics, today’s approach tends to perpetuate totally false ideas about how our economy works. It does the exact opposite of what such courses should, at least in part, aspire to do: prepare students to understand and accurately discuss the major policy issues of our day.
It’s true that some courses—including those at our school—already do this. But even they generally do not do it enough. Especially in an introductory course, reality should not be relegated to a once-in-a-blue-moon, if-you-want-to-learn-more supplementary reading—it should, I think, be placed right next to the models, front and center.
Most people who take these kinds of courses do not go on to seek out more information about issues like the minimum wage, yet complete them feeling as though they have a thorough grasp of what’s at stake. Instead of fueling the fire of destructive, widespread ignorance (and a next generation of angry activists, fired up about issues they’re devastatingly misinformed about), let’s cultivate a society of economically informed citizens.
Because here’s the thing: Different sets of information from different points in economic history can be used to support and refute a number of economic concepts, and it’s important to prepare students to interpret the kinds of evidence and arguments they’ll inevitably encounter throughout their lives.
Let’s start teaching more than models—let’s teach reality.
Anastasia Golovashkina is a third-year in the College majoring in economics.