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.