National Policy Choices And An Uninformed Majority

Posted on June 9, 2010

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Recently Zogby International conducted a survey to measure which group of voters were more knowledgeable about the economic policy choices facing the United States.  Those questioned were asked if they considered themselves to be Liberal, Moderate or Conservative. They were also asked their political affiliation or party choice either Democrat, Republican or Independent. They were next asked eight questions concerning basic economics. None of the eight questions were designed to challenge ideological leanings of any particular group.  The questions were basic Economics 101 and the answers were known and uncontested truths of economic theory. The questions were as follows:

1.   Do restrictions on housing development make housing less affordable?

2.  Does mandatory licensing of professional services increase the price of those services?

3.  Is the standard of living in the U.S. today by and large higher than it was 30 years ago.

4. Does rent control lead to housing shortages?

5.  Is a company with the largest market share a monopoly?

6.  Are Third World workers working for American companies overseas being exploited?

7.  Does Free Trade lead to unemployment?

8.  Do minimum wage laws raise unemployment?

The answers are: 1. yes  2. yes  3. yes  4. yes  5. no  6.no  7. no  8. yes

By an overwhelming margin Conservatives and Independents did better than Liberals in correctly answering the eight questions.  Liberals on average incorrectly answered about 5.2% of  the questions.  Conservatives  missed at an average of  about 1.6%  and Independents including Libertarians did slightly better at a 1.4% average incorrect answers.

As a young man I was fascinated for a time in understanding Marxist economic theory.  I remember being very aware of the liberal fellow travelers of the time. They were overwhelmingly Liberal Democrats who liked to engage in the revolutionary jargon of the Marxists,but if you talked with them you quickly realized that they were painfully ignorant of the economic theories that went along with the rhetoric.  Today we have much the same thing occurring as Liberal Democrats try to manage a staggering economy that they know very little about.  Sadder yet is that the constituents that put them in office know even less.   The economist Adam Smith believed that giving the power of government to the uninformed was a terrible thing, but not something that is unusual. I think that if we look at the present administration in Washington and the voters who put them there, we may begin to understand why things just aren’t getting much better.

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