Economics as a necessity for civic literacy

The Athenians were right: an (economically) educated populace is the first prerequisite of a functional democracy.


Okay, a recent top story in the papers for some time now has been the idea of Dion’s “Green Shift”, carbon tax, whatever you want to call it. If you’re actually reading this, I’m sure you know what I’m talking about. I was recently tuned in to local radio, featuring a call-in show on this issue. It’s particularly contentious out here in Newfoundland, because the rural culture lends itself to fuel consumption, and the province is an oil exporter.

Regardless, this radio show was flooded with opinions. A lot of ‘we need to keep our oil for ourselves, ban exports’. A lot of ‘we need government subsidies at the pump’. This sort of thing. What I find strange about this is that the economics profession by and large – I’d estimate 95%+ here – would dismiss these opinions as bad for Newfoundland and bad for society in general.

Similarly, an equally large proportion of economists would probably agree that if global warming imposes costs on society, a carbon tax or a cap-and-trade system is the correct way to fight carbon emissions. (These plans are actually equivalent according to economics.) Heck, many would support a tax on carbon even if global warming was a fantasy and other nations were unwilling to match our carbon tax, since burning cheap gas produces other things we don’t want – traffic congestion, urban sprawl, smog, and so forth.

Now, I don’t want to say economists are always right, because we’re not. But I’ve yet to hear a remotely convincing argument that would move me to consider supporting local oil autarky or a different scheme to control greenhouse gases. So I’m going to proceed under the assumption that the economists are right. Deal with it.

The problem for me is that if the aforementioned radio show is any indication, these “correct” policies aren’t going to garner substantial public support and so we’ll end up with inferior plans, meaning that we’re all worse off. This lack of democratic rationality has already been written on by such people as Brian Caplan, but it’s still a problem. The tyranny of the majority reigns.

Really, the only solution to fixing this is to improve the education of the populace – one more reason the government has a role in funding postsecondary education. If you’ll permit me to quote Susan Jacoby: “It is difficult to suppress the fear that the scales of American history have shifted heavily against the vibrant and varied intellectual life so essential to functional democracy[.]”

Wrong country, but the point is still clear: education, and I would argue in economics above all, is necessary for the voting booth to mean much.

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Economics as a necessity for civic literacy

  1. The impression that I’ve had regarding this issue is that the public debate is not so much against a carbon tax/cap and trade per se, but rather the problem is what to do with the associated revenues generated by those schemes. Federally, all of the parties are essentially in agreement that a price should be put on carbon, the policy differences are really only its relative value and how to measure and tax it. I can’t comment too much on provincial politics outside BC, except to note that even oil-rich Alberta has gone ahead and put a price on carbon, of a sort, so even there it seems there is some level of consensus.

    The real problem comes when we start looking at how the revenues raised by the tax should be distributed. Should it be taken from carbon rich provinces and funnelled into carbon poor ones, or should it be kept in the same province/region? Should the money be put in general revenues, “revenue neutral”, or exclusively toward environmental causes? I think that arguments based on solid economics could, in principle, be made for any of those cases, depending what the specific goals of the government and the carbon tax.

    As far as economics itself goes, I agree that at least foundational economics, along with other topics such as civics, statistics, and logic should be mandatory reading for all members of an informed society. For the broadest possible reach, I would argue that these topics should be introduced at the high school (or earlier) level. By the time we start only at post-secondary, already half the cohort has been lost.

  2. – re ‘comment by rick’ – Stanford kind of passes by the most important part of the capitalist rabbit hole – you understand nothing if you don’t understand where the money comes from in the first place, and the cancer that that is – for a turning on the light in a truly scary place, start here – Banketeering – how the banks have been stealing trillions from you, and the tap is still running http://www.rudemacedon.ca/dlp/box/box01-money.html .

  3. Though it should be noted that education is always a quandry – the ability to obtain information through the senses allowed for the continued expansion of civilization. Those societies which have feared this exposition of nature have invariably collapsed in either major or minor fashion. In the United States the ability to economically purchase and own basic information systems, [ie., the book, video, cd, pc] has reached such a turning point that illiteracy on most subjects is above 80 percent. Heaven forbid that nature place an evolutionary challenge, forward. The loss to the current society of man will indeed be profound.

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