May

6

Honesty In Economics Schools

Filed Under Careers, Colleges And Universities, Economic Education, Economics, General 

Do you know the biggest reason parents aren’t teaching their kids economics these days? It’s not because there are only a few economics curricula on the market (though that’s true). It’s not because they don’t have time to squeeze economics in (a good course will require only 20-40 minutes per week). It’s because parents want to shield their kids from economic education!

Why would parents want to “protect” kids from economics? According to a study by Frank, Gilovich & Regan cited in the Spring 2000 issue of Markets and Morality, “students completing an introductory course in mainstream economics were far more likely to be less honest at the semester’s end than were students completing a course in astronomy.” In light of financial and ethical collapses at firms like Enron and Qwest, parents are wary of the economic world and hesitant to teach their children its wiles.

Our hesitation is perfectly understandable. Ironically, though, if the above-cited research is accurate, we should be doing just the opposite! We should teach our kids the mechanics of free markets from an ethical perspective.

According to Milton Friedman, Nobel-prize winning economist, the free market system is the most ethical system of exchange because of its mutually-beneficial, non-coercive nature. Free market exchanges are based on self-interested choice, allowing all participants to act only when it benefits them. Not only do our kids miss this lesson, but so do many adults!

And perhaps this is why we’re experiencing so many economic frauds and failures. Former Federal Reserve Chairman Alan Greenspan said recently that, “Improving basic financial education at the elementary and secondary school level will provide a foundation of financial literacy that can help prevent younger people from making poor decisions that can take years to overcome.”

Why is socialist thinking gaining momentum in our national discourse? It’s because a growing number of people think that capitalism lacks an ethical foundation. They’ve never been taught the moral basis of capitalism and don’t understand how its checks and balances operate. To many of us, the concept of self-interested behavior sounds more like “selfishness” than “a system based on freedom of choice.”

Our kids are also failing to learn their role in our economic system. What powers they possess in the free market will never be tapped if our kids aren’t educated as to just what those powers are!

But perhaps the most important lesson our kids are missing is how to think in cost / benefit terms. How many parents struggle in store aisles, saying over and over, “No” to our children without ever really teaching them the concept of an opportunity cost?

Frightening as real-world economics might be, the study of economics contains valuable life lessons we shouldn’t hide from our kids. As Greenspan said, their understanding of finance and economics will help our kids avoid making bad decisions that can take them years to overcome.

 

 

economicsschools.com

Author: Stephanie Herman

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