Tuesday, September 28, 2004

Public economic ignorance

Bryan Caplan has a good, concise paper on economic illiteracy: ... economic illiteracy is rampant in the general public.

Here is a representative quote:
One survey item that captures the public's anti-market bias is the question asking why
the price of gasoline rose back in 1996. Is the reason the "normal law of supply and
demand," or is it instead "oil companies trying to increase profits"? An overwhelming
majority of economists - 89% - points to supply and demand. An almost equally lopsided
fraction of the public - 74% - says the opposite. In the minds of public, prices apparently
go up when businesses suddenly start to feel greedier. Economists, in contrast, expect
businesses to be greedy year-in, year-out; but depending on market conditions, greed
may call for prices to go up, go down, or stay the same.


We know now for certain, Bastiat got it right nearly 200 years ago.
(Via EconLog)

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