Free markets and free education
America's economy leads the world, but few high-school students
To no one's surprise, the latest GDP numbers that were released
last week showed that America once again leads the world in domestic
production, extending a record of dominance that began more than
a century ago.
Unfortunately most high-school students don't have a clue about
the origins of that dominance.
Much of this is due to the fact that America's teachers, who
are celebrating National Teacher's Day today , do a far better
of job of teaching the evils of capitalism, than they do of explaining
how our workers became so productive in the first place.
A big chunk of America's success is due to two reasons: free
education and free markets.
The role of free primary and secondary education in boosting
our national productivity is by now widely recognized. Americans
understand that a population that can read, write and do basic
arithmetic has a leg up when it comes to learning new skills
and making effective choices. In fact the model has long since
been emulated by most of the world's advanced economies.
Yet free schooling for children is hardly universal. When the
United Nations set its Millennium Development Goals four years
ago, one key target was to bring the world's primary schooling
completion rates to 100% by the year 2015.
This is something the U.S. has been doing for more than a hundred
years. And we don't just provide free primary education, we also
provide free high school education and we heavily subsidize many
universities and community colleges.
While high school students are generally aware of the importance
of our free public education system, they are less clear about
the role that free markets the second key element in America's
success ---play in boosting national income.
Much of this has to do with their teachers.
According to research conducted by the Foundation for Teaching
Economics, many high school teachers harbor suspicions that capitalism
is not good for the poor. What's more, these views affect what
they tell their students and often translates into an anti-business
attitude in their instruction.
The effects can be seen in the anti-globalization protests, in
which angry youth play a key supporting role.
Yet the benefits of free markets in reducing poverty are widely
accepted by most economists.
Last week the World Bank released figures showing that the proportion
of people living in extreme poverty, (less than $1 a day) has
dropped by almost half between 1981 and 2001, from 40 to 21 percent
of global population.
Not surprisingly the countries that excelled were those that
did the best job in educating their population and increasing
Far for hurting the poor countries, freer trade is actually crucial
to their success.
"To achieve and sustain the levels of economic growth needed
to reduce poverty, developing countries need greater access to
foreign markets," concluded the report's authors .
Indeed according to the World Bank one of the most biggest obstacles
toward increased trade facing the poorer countries is the $330
billion that rich countries spend to subsidize their agricultural
producers. These subsidies have a devastating effect because
70 percent of the world's poor live in rural areas, and agricultural
products are one of the few areas in which they can sustain a
Of course open markets alone won't be enough to substantially
improve the lot of the poor. Other key elements of the capitalist
system, including respect for private property, rule of law and
a culture of entrepreneurship also need to be present in varying
degrees. But these tend to follow open markets in lockstep.
To help stimulate the debate, the Foundation for Teaching Economics
has been conducting a series of seminars for high school teachers
across the country titled "Is Capitalism Good for the Poor?
The courses use case studies drawn from around the world, to
show how economies that have more of the elements traditionally
associated with capitalism do better than those that don't.
The teachers are given free classroom materials and lesson plans,
the hope being that they will take what they have learnt and
pass it along when they get back into the classroom.
So while National Teacher's Day is the perfect opportunity to
salute the men and women who get most of the credit for educating
one of the world's most productive workforces, we must also ask
them to do more to explain to our youth the sources of that productivity.
Because if our next generation of leaders doesn't understand
how wealth is created, America's economic lead could evaporate
a lot faster than we might like.