Home > Uncategorized > Economic propaganda—not education

Economic propaganda—not education

from David Ruccio

There’s no doubt, after the crash of 2007-08, students—including those in middle schools—could use more economics education.

Unfortunately, they’re not getting it. They’re just being exposed to propaganda.

“What is the basic economic problem all societies face?” April Higgins asks her sixth-grade class.

Ava Watson, raises her hand: “Scarcity.”

The teacher asks for a definition and the class responds, in unison: “People have unlimited wants but limited resources.”

Not bad for a bunch of sixth-graders.

What April Higgins is engaged in is not economics education. It’s just neoclassical economics.

You see, there is no single “economic problem.” It all depends on which theory we’re looking at. According to neoclassical economists, all societies in all places and times have faced the same problem: scarcity. And, of course, private property and markets are their proposed solution.

But that’s not the economic problem as defined by Keynesians (how to analyze and use the visible hand of government to get out of less-than-full-employment equilibria) or Marxists (how is the surplus produced, appropriated, and distributed and how can exploitation be eliminated) or many other schools of thought.

The fact is, middle-school economics education (like high-school, undergraduate, and graduate economics education) is dominated by one school of thought, one approach among many, that is presented as “economics.” In the singular.

And that’s because it’s run by the Council for Economic Education and stipulated, in some instances, by government decree:

The Texas education code states that economics must be taught with an emphasis on the free market system and its benefits.

Economics education, at any level, means exposing students to and having them grapple with the assumptions and consequences of different economic theories and systems. Focusing only on one approach and system—neoclassical economic theory and capitalism—is just propaganda.

  1. graccibros
    March 4, 2016 at 6:38 pm

    Thanks David, I’m worried about this issue as well. It sent me scrambling to find an issue of the NY Review of Books which contained an article by Michael Massing, former editor of the Columbia Journalism Review entitled “How to Cover the One Percent.” It was in the Jan. 14, 2016 Print Edition (Volume LXIII, Number 1 if you’re trying to find it online).

    On the second page of the article is this long paragraph, so bear with me, but I think readers will find it worth it:

    “In 2009, for instance, the billionaire hedge fund manager John Paulson gave New York University $20 million to create both an Alan Greenspan Chair in economics and a John A. Paulson Professor of Finance and alternative Investments. In 2010, the Peter G. Peterson foundation, which is dedicated to reducing government spending and the national debt, gave a three-year $2.45 million grant to Columbia University’s Teachers College to develop a curriculum ‘about the fiscal challenges that face the nation,’ to be distributed free to every high school in the country. The philanthropic arm of BB & T, a financial services company in the North Carolina, has given millions to more than sixty colleges and universities to examine the ‘moral foundations of capitalism’ and promote the works of Ayn Rand. What has been the impact of these donations? How much control, if any, do the donors have over what’s taught? The type of website I’m proposing would seek to answer such questions.”

    Now it’s hard to say, for me at least, which of these donations is more troubling; maybe the Peterson Foundation one to Columbia because it superficially seems more neutral, but it’s scope of reach is breath-taking. I tried to do some follow up with Columbia to see what type of review board them might have set up to make sure the content was as neutral as possible, but that’s never easy even if the grant were given over entirely to economists themselves free from Peterson fiscal bias looking over their shoulders. So if anyone knows what the final product was like or can share some insights into the process, by all means chime in.

    And notice that there are no large donor grants to set up the Robert Heilbroner, Robert Lekachman, Michael Harrington or George Lichtheim chairs or educational material in their names…it all slants Right with varying degrees. Not even the ending to Greenspan’s term with the Great Financial Crisis and his role in deregulation, “Greenlighting” it, prevents the honors.

    • March 7, 2016 at 9:42 am

      I agree wholeheartedly. It’s an issue of how vested interests pursue the indoctrination of thee future economist-minions. The narrative spreads like a virus through the minds of the students, it is picked up by the rest of the population and by the politicians and lawmakers. An idea thus becomes “reality”, “truth” and “fact based” and in last instance “immutable”.
      Witness the current debate(s) on basic income and the screaming attacks from the proponents of the neoclassical model.

      • graccibros
        March 7, 2016 at 5:35 pm

        Yes, Redditobase:

        And that’s what Sheldon Wolin feared in the book I listed second, “Democracy Inc.” The depoliticization of the general population and the highly ideological nature of field of economics, which young students are perhaps least likely to be able to identify, unravel and act on…given their dependencies…(of which there are lots more after they graduate…)

        I have read all the reservations about lists and counter lists, and I share those reservations…and I drew up a paragraph of books and articles which I left out that I could add or substitute…my point in doing so was not to be pedantic or to start and ideologically correct list to answer the Right’s famous names of Hayek, Rand and Friedman…I’m sure there are Right wing lists at the think tanks and U of Chi…
        …but rather my purpose was to jolt the students I spoke to a bit, and also, because I sent out a little essay about it to my Email list and posted at the DailyKos where I am BillofRights, precisely to counter the depoliticization I see all around me in a little red state area in a supposedly blue state. You can ask Bernie Sanders about the lack of power to alternative economic ideas in deep red states…yes it race trumping class interest…but there is nothing out there to balance the equation more towards class and mutual economic interest. How come there is no “right to a job” to go with “right to health care” and that’s from a candidate who plugged FDR’s Second Bill of Rights?

      • March 7, 2016 at 8:03 pm

        I’m with you on efforts to expand interactions on how and why economic actions are organized as they are and some of the alternatives to these. As Twitter and Facebook prove everyday helping things go “viral” can have significant and widespread impacts. But also as Twitter and Facebook show most of these “viral” processes don’t last very long. How to make such considerations durable and useful are the real concerns we must deal with. And then how to translate them from gossip and “bitching” to changes in collective organization, even against opposition?

      • March 7, 2016 at 7:54 pm

        Don’t get too carried away about “vested interests.” We’re all involved in vested interests. In work we believe in and want to see expanded. In the way government is organized and carried out. In how our lives are organized, and who/what has the right to organize them. Earlier versions of “economics” had vested interests in well functioning households and nations, focused on the ways a study of these could help societies prosper and endure. Neoclassical economists had different vested interests. Many of which are opposed by the vested interests of authors on this blog. And compromises are often the order of the day.

  2. March 5, 2016 at 12:49 am

    Who would trust Fox News or the Wall Street Journal to publish textbooks dealing with labor issues. By the same token, why should this be any different for McGraw-Hill or Newsweek magazine in the 1940s?

    In the 1940s, Mason Britton, vice chairman of the McGraw-Hill board of directors chaired the Advertising Federation of America which spearheaded the campaign against Harold Rugg’s social studies textbooks.

    Joining the Advertising Federation and the American Legion’s campaign against the Rugg textbooks, the National Association of Manufacturers commissioned Columbia professor Ralph Robey to review 600 textbooks. Robey wrote the Newsweek economics column from 1937 to 1946 that was subsequently taken over by Henry Hazlitt when Robey moved on to become chief economist of the NAM

    In his 1958 article, “How Pressure Groups Operate,” Henry Turner wrote, “The National Association of Manufacturers and other groups have prepared and distributed to the public schools posters, booklets, books, radio skits, film strips, and other ‘teaching aids.’ In 1957 the NAM announced that it distributed “at least two million booklets” free to the schools every year.’5 The gas and electric public utilities during the 1920’s surveyed textbooks and suggested changes in the presentation of materials regarding public utilities. Approximately three decades later an official of the National Association of Real Estate Boards told a Congressional committee that his organization had stimulated the writing of textbooks that were used ‘in 127 colleges and universities in teaching . . . the economics of real estate.'”

    From the 1920s to the 1950s, the NAM boasted about teaching the college economics teachers and writing the textbooks. In 1922, the NAM Open Shop Publicity Bureau “supplied 1,500 colleges and university teachers of economics and sociology with material…. Practically all of the college and university teachers of sociology, government, and economics receive our publications.”

    At the NAM’s 1923 convention, president John Edgerton credited Sargent with attracting “a great deal of favorable attention from our seats of learning in this country. He is teaching the teachers. He is teaching the professors and college presidents.”

    Among the contributors to NAM “educational literature” were Harvard University President Charles W. Eliot and University of Chicago economics professor and founder of the Journal of Political Economy, J. Laurence Laughlin. One doesn’t have to take their word for it to at least suspect they had a good deal of influence.

  3. March 5, 2016 at 10:11 am

    Economies are networks and we should be teaching economics using graph theory from an early age. How do you represent a company as a network, both internal person-to-person transfers and external? Is a family similar?

    How about a country, what does “free trade” do to the networks that it connects? Can you compare migration with off-shoring as networks? Unemployment, it’s being disconnected from the network. How do you abstract a market as a network? What kind of network causes more inequality than another?

    If we bring out the idea that economies are networks and can be analysed fruitfully with graph theory it’ll be more engaging and more real-world relevant than finding the crossing point of two made-up curves.

    • March 5, 2016 at 12:48 pm

      Pavlos, are you entirely agreeing with me, or just I with your first and last sentences? The problem with these blog discussions is that we cannot show networks visually, nor even (by a quick glance at a writer and his words, whether his theme is networks (which include ourselves), and what is going on in them, and how most simply to represent them.

      Here I find your questions most stimulating, because I rarely, myself, think in terms of questions rather than problematic situations. Over the last several years I have attempted to answer them by reference to and explanation of graphical methods, notably the interpretation of economics in the terms of SSADM relational analysis of macro and micro systems, feedback circuit analysis of PID error control systems and an in-depth educational plus physiological/functional/maturation level explanation of the Myers-Briggs findings on personality differences. As I have had no feedback to suggest you have even noticed this, or even the instructions I have given for where to see (e.g. a Wheatstone Bridge) or how to construct the minimal (macro) diagram of system relationships, I am at a loss as to how to respond to your stimulating questions. I would like to show you my answers, but without a graphical flow diagram to discuss I can’t. Is this not worth pursuing via email/attachments?

  4. March 5, 2016 at 11:30 am

    To quote a fairly decent James Bond movie, “One man’s terrorist is another man’s freedom fighter.” So how do we decide the difference? Whether April Higgins is involved in education or propaganda is decided by the relationships in which Ms. Higgins’ teaching and the materials from which she teaches are involved. If those relationships are built around the most common and most written about aspects of “economic” actions, then Ms. Higgins is teaching those to the students and meeting her obligations as an educator. If those relationships are centered around questioning and perhaps challenging the most common and most written about aspects of “economic” actions then Ms. Higgins fails to point out and explain those questions and challenges and tor that reason is not meeting her obligations as an educator. So both are correct, depending on the relational starting point.

    Tom’s comments support my points. Clearly the relationships making Ruggs’ research and textbooks are nearly 180 degrees from the relationships making the critiques of Ruggs’ research and textbooks by the NAM, American Legion, and the Advertising Federation. Moreover, the relational basis of the opposition of the second and third are clearly different from relational basis of the NAM’s opposition. Studying these relationships processes is how we figure out how, why, and by what means these conflicts began and continued. And if so inclined how we might intervene to change them.

  5. March 6, 2016 at 1:59 am

    Thanks David for sharing such a important information about the subject. I am high school teacher and teach economics and business studies. I agree with you that we are not teaching what is economics rather how neoclassical economists define economics. Time has come to seriously think and do something about economics syllabus at high school and college level as we already know that how dangerous these neoclassical theories can be.

    • March 6, 2016 at 4:51 am

      Just to keep the record straight, neoclassical theories are not the only dangerous ones. Classical theories have dangers embedded in them. As do Keynesian theories, Marxist theories, and socialist welfare theories. It’s not so much the first word that makes them dangerous, but the second – theories. Theories can be useful tools. But like chain saws and blow torches – also useful tools – failure to control the theories by keeping a close and constant focus on how they are used can cost more than a severed hand or 3rd degree burns. It can cost our link with the objects of our study, actual actors doing actual things. Much of which the theory will not explain or even anticipate.

    • David Chester
      March 6, 2016 at 7:44 am

      Ashish, Indeed it is a heart-felt wish by many serious thinkers in economics that the subject be better taught, but first the teachers themselves need some improved information and methods. May I suggest that my working-paper SSRN 2600103 and the associated book in its reference list, can show the way that this can be achieved?

  6. graccibros
    March 6, 2016 at 3:20 am


    You mean like this one I handed out Thursday evening at my talk to a business major Fraternity at Frostburg State Univ. in Western Maryland?

    Upon further thought, I re-named it a “Syllabus for a New Political Economy.”

    Sorry that MS-Word doesn’t carry over too well into the blog.

    Suggested Readings for Young Business and Economic Majors

    1. Karl Polanyi, The Great Transformation: The Political and Economic Origins of Our Time (1944).
    2. Sheldon S. Wolin, Democracy Inc.: Managed Democracy and the Specter of Inverted Totalitarianism (2008).
    3. Mark Blyth, Austerity: The History of a Dangerous Idea (2015)
    4. Thomas Piketty, Capital in the Twenty-First Century (2013).
    5. David Harvey, The Enigma of Capital and the Crises of Capitalism (2010).
    6. William Greider, One World, Ready or Not: The Manic Logic of Global Capitalism (1997).
    7. John Gray, False Dawn: The Delusions of Global Capital (1998).
    8. Naomi Klein, This Changes Everything: Capitalism vs the Climate (2014).
    9. Alyssa Battistoni, https://www.jacobinmag.com/2015/12/naomi-klein-climate-change-this-changes-everything-cop21/
    10. ________________, https://www.jacobinmag.com/2014/01/alive-in-the-sunshine/
    11. Donald Worster, Dust Bowl: The Southern Plains in the 1930’s (2004).
    12. Robert d. Leighninger Jr., Long-Range Public Investment: The Forgotten Legacy of the New Deal (2007).
    13. Cass Sunstein, The Second Bill of Rights: FDR’s Unfinished Revolution and Why We Need It More Than Ever (2004).
    14. James A. Morone, Hellfire Nation: The Politics of Sin in American History (2003).
    15. Gary Wills, Reagan’s America (1987).
    16. Russell Banks, Dreaming Up America (2008).
    17. Christopher Lasch, The True and Only Heaven: Progress and Its Critics (1991).
    18. Mark C. Taylor, Confidence Games: Money and Markets in a World Without Redemption (2004).
    19. Michael Lewis, Liar’s Poker: Rising Through the Wreckage on Wall Street (1989)
    20. _____________, The Big Short: Inside the Doomsday Machine (2010)
    21. James Galbraith, The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too (2008)
    22. _______________, The End of Normal: The Great Crisis and the Future of Growth (2014)
    23. Yanis Varoufakis, http://www.nakedcapitalism.com/2014/02/yanis-varoufakis-can-internet-democratize-capitalism.html
    24. _______________, http://www.nakedcapitalism.com/2013/12/yanis-varoufakis-confessions-erratic-marxist-midst-repugnant-eurozone-crisis.html
    25. http://harvardlawreview.org/2015/04/policing-and-profit/

    • March 7, 2016 at 3:09 am

      Okay, you hand out a “Syllabus for a New Political Economy.” Someone else hands out the “Syllabus for a really new political economy.” Then comes “Syllabus rebutting the new political economy.” Where’s it stop? This is what happens frequently in court cases. How do courts settle on an answer and a decision? Since this is not criminal law, the criterion is “preponderance of evidence.” Which set of texts and conclusions is supported by a majority of the evidence? There are two problems with using this in a teaching situation. First, even “minority” evidence may help us understand parts of events. But which evidence and which parts? Second, teaching the subtle mixing of evidence from different perspectives is difficult, particularly for secondary school students, and even college undergraduates. But substituting one set of “truths’ for another is not the answer. In teaching US history one topic in particular creates tension. Is the US the greatest country in the world? In some respects that’s possible. In others, it’s questionable. No “black and white” answers! Why should economists assume they could do any better in their teaching?

      • blocke
        March 7, 2016 at 8:00 am

        I really don’t see the difficulty in answering a question like
        “Is the US the greatest country in the world?” It all depends on what is meant by great, and you start with the students there. In my book, The Collapse of the American Management Mystique, I said that America could not be America without a people of plenty residing within its border. That was my definition of great and the entire book worked on the theme. Set up different purposes and metrics and find different answers and modes of analysis. That is pretty good education for students because it requires them to think.

      • March 7, 2016 at 7:45 pm

        Students may be a place to begin. But they can’t be the end of the process. Since creating understanding and knowledge (“reality”) is both collective and processional, interactions on such topics need to extend beyond any classroom. So how to go about extending the interactions (verbal and physical) on such topics beyond any one setting is the tough issue we face. And it’s becoming tougher to resolve as more and more efforts are made to limit such interactions to news analysts, experts, and “leaders” of business and opinion.

  7. Christina
    March 7, 2016 at 5:32 pm

    In NYS economics education is required not just in high school but in elementary school as well. Ten years ago a fifth grade teacher asked me to speak to my child’s class. I used M&Ms to help them visualize the disparities in per capita GDP. I held up two bags, one with 300+ candies for the US and one with less than10 candies for Ethiopia. The class went silent except for one student who said, “Well, that’s not fair!”
    Sometimes simply presenting data will encourage outside of the box questions and comments. Of course, the chocolate didn’t hurt either.

    • March 7, 2016 at 8:07 pm

      Great strategy. Learning is always more than just words. Now the questions are: will these students ask their parents about this “unfair” thing? And will their parents ask their government representatives, their ministers, their bankers? With this, big trees from little acorns grow.

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