It seems clear that the creative destruction that capitalism thrives on makes many people uncomfortable to begin with; adding to that base level of anxiety the uncertainties associated with the recent popping of the tech and mortgage bubbles and the corresponding decline of the dollar, and it is easy to imagine a toxic backlash against the more freewheeling aspects of capitalism.
Unfortunately, the greater certainty that is offered by the semi-socialist economic model is accompanied by slower economic growth, lower standards of living and much higher levels of unemployment that we have experienced here in the United States. German unemployment, now at its lowest rate in 15 years, still hovers near 8.4%--68% higher than in the United States. France’s unemployment rate is 8.3%, again low compared to recent history in France, but much higher than in the United States.
The (Bill) Clinton campaign famously rode to victory on the theme "it’s the economy, stupid;" and to a great extent, every politician knows that economic concerns drive political behavior. Today, Americans are anxious about our economic future, and it seems probable that one consequence of that will be a rise in government attempts to reign in and direct the market—to become more like Europe.
If that is the case, we may not be able to blame the shift on a steady diet of anti-capitalist propaganda in the schools, as is the case in Europe. In America, the cause is the widespread ignorance of the virtues of the marketplace, which makes us more susceptible to the siren calls of the economic populists whose policies would just as surely undermine our prosperity as the European socialists do.
The solution? Again, only half of American students are taught basic economics in our public schools, and still fewer of our college students get a good grounding in economics to counteract the overwhelmingly leftward bent of higher education. It’s long past time that we recognize that a basic grounding in economics is a necessary component of our education to become good citizens.
Economic literacy would not eliminate genuine policy disagreements based upon competing values, but at least it would give Americans a common baseline of understanding that would elevate the debate. Americans would at least understand the trade-offs that various policies entail, and that would be a step in the right direction.
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