JONATHAN CHAIT JUNE 8, 2010
Conservatives are very excited about a new study by George Mason economist Daniel Klein purporting to show that conservatives and libertarians understand economics far better than liberals do. Here's Klein's op-ed in today's Wall Street Journal:
Who is better informed about the policy choices facing the country—liberals, conservatives or libertarians? According to a Zogby International survey that I write about in the May issue of Econ Journal Watch, the answer is unequivocal: The left flunks Econ 101.
Zogby researcher Zeljka Buturovic and I considered the 4,835 respondents' (all American adults) answers to eight survey questions about basic economics. We also asked the respondents about their political leanings: progressive/very liberal; liberal; moderate; conservative; very conservative; and libertarian.
Rather than focusing on whether respondents answered a question correctly, we instead looked at whether they answered incorrectly. A response was counted as incorrect only if it was flatly unenlightened.
If you look at the questions, though, they turn out not to gauge so much economic knowledge as agreement with the neoclassical economic model. Klein lists his questions:
1) Mandatory licensing of professional services increases the prices of those services (unenlightened answer: disagree). 2) Overall, the standard of living is higher today than it was 30 years ago (unenlightened answer: disagree). 3) Rent control leads to housing shortages (unenlightened answer: disagree). 4) A company with the largest market share is a monopoly (unenlightened answer: agree). 5) Third World workers working for American companies overseas are being exploited (unenlightened answer: agree). 6) Free trade leads to unemployment (unenlightened answer: agree). 7) Minimum wage laws raise unemployment (unenlightened answer: disagree)
Note that all these questions measure not economic knowledge per se but agreement with the neoclassical model. There are no questions about, say, whether tax cuts at current levels tend to increase or decrease tax revenues. This was a test obviously designed to portray conservatives as better informed.
Conservatism and libertarianism believe that the neoclassical model of self-correcting markets and perfectly rational behavior perfectly, or almost perfectly, whereas liberals tend to believe that the model falls short in all sorts of ways. (See: Economic Collapse, 2007.) Klein's method consists of asking respondents whether they essentially accept his model. Klein treats anybody who thinks a Third World worker for an overseas American firm is being exploited as ignorant of economics, when this is obviously a questions of values rather than knowledge. The minimum wage question is even worse. It counts anybody who doubts that minimum wage laws always raise unemployment as ignorant, when in fact empirical evidence suggests that in practice the link may be nonexistent.
The only thing this study demonstrates is the ideological hackery of its authors.