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Source link: http://archive.mises.org/5567/only-technology-and-economic-education-can-save-us/

Only Technology (and Economic Education) Can Save Us

September 5, 2006 by

Manuel Lora’s recent article highlighted the importance of economic education. I’ve long believed the single most important thing we can do is to foster liberty is to promote economic literacy. (I made this point in Why are Austrians Libertarians? and in this interview by Alberto Mingardi.) Why are economic education and economic literacy so important? The basic answer is we can never have a free society–libertarian civilization–without large-scale voluntary respect for others’ rights. The degree of civilization we currently have is made possibly only because most of us, to some degree, would not steal from our neighbors even if we would not get caught. If human nature were such that everyone were totally corrupt, and had no empathy for others and placed no value on others’ well-being, no type of civilization would be possible. That it is demonstrates that there is a significant, systematic, widespread degree of voluntary respect for others’ lives. In other words, stark criminals are in the minority.Most of the majority are not consistent in their respect for others, however, which is why socialism in various forms–institutionalized aggression–persists. Therefore, it seems to me that we can approach a freer society only if the “decent”, civilized among us achieve greater understanding of the effects of the socialistic policies they tend to consent to and favor. This, of course, requires economic education or understanding. It is my view that if the bulk of humankind who view themselves as civilized, and who do care to some non-trivial degree for the welfare of their fellow men and overall civilized progress, had a good understanding of even basic economics, they simply would not favor most socialistic policies in force today, such as minimum wage, wage and hour legislation, socialized medicine, progressive tax rates, and so on–becase they would then realize these policies are incompatible with the more basic civilized norms they really favor–harmony, peace, prosperity, cooperation, etc.

And yet, how can there be economic education of the masses? As an immediate, or practical, matter, there are groups like the Mises Institute and the Foundation for Economic Education, who seek to promote sound economics. Groups like these–in particular, the Mises Institute, since it explicitly devotes itself to the truly sound school of economics, Austrian economics, not just “free market” economics in general–are therefore critical and essential.

But it remains true that most people are not academics or autodidacts. If nothing else, they have no time for personal enlightenment on the level of reading Hazlitt, Mises, or Rothbard. They are too busy with their careers and families. Moreover, those that do embark on such studies encounter much mainstream soft-socialist economics implicit or explicit in what they seek to read, creating yet another obstacle to sound economic understanding.

But given the lack of time for or interest in personally economic enlightenment, how can we ever hope to have a populace economically literate enough so that significant societal shifts towards freedom happen naturally? I believe that, if it can happen, it can only happen over time and because of technology and capitalism. If we reach a point where the riches and prosperity of capitalism permit people to work, say, 10 hours a week, and retire (or have the ability to retire) at 40, we are likely to see a blossoming of autodidacticism. Such prosperity can only be achieved by capitalism and various technological advances that help us to prosper despite being hampered by state controls.

Moreover, the increasing digitization and instant access to written works will catalyze this. And two other factors should be noted. First, even though there will in the future be both socialist and capitalist economics and politics to choose from, as we achieve greater prosperity and harmony in our increasingly commercial and capitalist system, there will be a greater natural awareness of the validity of the free market way of thinking, just as the fall of the USSR has led to a sort of background awareness of the superiority of capitalism over socialism that did not exist twenty years ago.

Second, free market economics is true; whereas socialist political and economic theory is self-contradictory, pseudo-scientific, and bankrupt. We can only hope that, in the long run, the basic decency of most people, combined with their ability to learn given a chance, and increasing economic prosperity due to capitalism and technological advances, and ready access to insights of free market thinkers, will lead to an eventual enlightened populace that throws off the chains of statism as incompatible with the basic values of civilized people.


quasibill September 5, 2006 at 10:56 am

Absolutely agree with the sentiment, and think that not enough is said about this aspect. However, I’d like to point out that in actuality, we already are wealthy enough, as a whole, to be at your tipping point. The two problems are states (duh) and the confiscatory and wealth reducing powers they exercise over their citizens, and materialism. Even with our state and its huge wealth destruction, most people live well beyond subsistence. However, they constantly spend well beyond their means for luxuries that they definitely don’t need, and probably don’t really want, forcing them to work ever longer hours to make more money – especially when they’ve trapped themselves with debt to buy this unnecessary items in the first place.

Not that I’m advocating some coercion or whatever to end materialism, but that it might be necessary to first address the cultural bankruptcy of pure materialism through education before large numbers of people will have the free time you envision to become autodidacts.

Manuel Lora September 5, 2006 at 11:45 am

Though I don’t deny that some people, even most perhaps, are spending a lot, how much different would it be without a central bank to facilitate super-easy credit? Maybe what you see as the tipping point that you say is caused by abundance and spending has been greatly exaggerated by central banking and debt.

quasibill September 5, 2006 at 12:43 pm


“how much different would it be without a central bank to facilitate super-easy credit? Maybe what you see as the tipping point that you say is caused by abundance and spending has been greatly exaggerated by central banking and debt.”

I think we’re on the same wavelength. Personally, I see the Fed as the single biggest enemy to liberty in the U.S. today. Not only does it empower the state to do things it otherwise couldn’t afford, it warps culture in myriad “bad” ways. I’m far from a conservative, but I see much to praise in traditional sentiments regarding savings, envy and the feeling that the sum of life is not measured in terms of how much money an individual produces and consumes.

happy lee September 5, 2006 at 1:07 pm

I was touched by Arthur Foulkes’ remarkable essay in the current Free Market. I wonder what the longterm benefit would be if each of us volunteered to teach a little econ in highschool? Maybe bring a grab bag of free handouts for the few kids who express a further interest in this stuff — MNR’s For a New Liberty, Hazlitt’s Econ in One Lesson, Rand’s Atlas Shrugged, etc. I had to stumble upon this stuff by myself in college. What a difference it would’ve made to see a little of it in highschool. (I’d offer that we should offer classes in colleges, but the intellectual bodyguards of the State would fend off any such attempts….)

Roger M September 5, 2006 at 2:27 pm

A huge portion of voters watch professional wrestling, and they vote. We should figure out ways to reach that group. A while back this blog had a lesson plan for teaching econ to 5th graders. I suggest we take that plan and use it to reach wrestling and NASCAR fans. We could also use it for journalists, but it might be to difficult for them.

Paul Edwards September 5, 2006 at 2:52 pm

I think that libertarians and Austrians must at the very least, be educating their children thoroughly in these two fields of knowledge. Through this home-based education, they should also instill in their children the importance of these ideas, not merely as interesting and useful insights, but as knowledge that is critical towards the advancement of western civilization. The ideas that we pass on to our children need to be recognized by them as important enough to be taken to heart and to be able to defend them against others, and to again pass on to their own children in like fashion.

A case where this approach would possibly have had notable impact is in the situation of the Buffet family. Howard Buffet was a staunch libertarian and a friend of Murray Rothbard. In contrast, Howard Buffet’s son, Warren, while a spectacularly successful businessman, reveals himself to be somewhat less of a libertarian and actually ignorant of the free market economics under which much of his success hinged on. In terms of his entrepreneurial skill in contrast with his lack of understanding of free market economics, he has been referred to as an idiot savant.

Would it not be more advantageous for liberty if it had as a spokesman such a successful and renowned businessman as Warren Buffet who was also a principled libertarian who understood the ethical and economic principles on which his success was founded? Instead I hear statists quoting him to support their arguments for government intervention in the market. That’s disgusting and does not seem to assist the cause of liberty very much at all.

Nick Bradley September 5, 2006 at 4:39 pm


Materialism is directly caused by the state. The state, through various interventionist polcies, most notably expansionary monetary policy, have artificially raised the time preferences of the people. For example, if inflation is worth more now than it will be tomorrow, I am going to spend it now!

As the state reduces its size, time preference will do down with it. As time preference decreases and forward-orientedness increases, materialism will decrease as well.

Adem Kupi September 6, 2006 at 10:57 am

Yes, in fact, monetary inflation, and the resulting high time preference is also a major reason why people are not economically literate. First, all of their naive observations of the economy are distorted by inflation, and secondly, they don’t have time, at least in their minds, to really question the world as presented by the media, etc.
Intellectual activity becomes a relatively low priority when other priorities are artificially subsidized by inflation.

TGGP September 6, 2006 at 11:13 am

Everyone is a materialist to some extent, but inflation certainly exacerbates it.

Vince Daliessio September 6, 2006 at 12:07 pm

Re inflation and time preference;

Observe carefully the spending behavior. The vast majority of people get rid of dollars as fast as they can.

Why? Because a) every dollar loses value due to monetary inflation every second it is held; b)loss of value is compounded by flat wages and higher taxes; c) available net interest is negative when adjusted for inflation and taxes. People buy instead of saving because they value objects, and the utility of having and using those objects more than the dollars they exchange for them.

If monetary inflation and income taxes were eliminated, spending would decrease and saving would increase. While I do not accept this outcome as justifying such a policy (appeal to utility), they should nonetheless be eliminated for moral reasons.

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