The Political Economy of Economic Education: The Moral Dimensions (Report‪)‬

Introduction Economics is commonly thought of as difficult to teach. In some respects, this is surprising. The basic economic concepts of scarcity, opportunity costs, the law of demand and supply, and marginalism are really quite straightforward. At an early age, everyone becomes familiar with scarcity. Indeed, we believe the best explanation for the "terrible twos" is that at about age two children discover scarcity. This discovery quickly leads to an awareness of the ubiquity of opportunity costs. Few things are more reasonable than people buying more when the price goes down and supplying more when the price goes up. Even the paradox that water is far more valuable than diamonds, but the price of diamonds is far higher than the price of water, is easily explained with the concept of marginalism. It is true that deriving the implications of these basic concepts can be difficult, but this difficulty is commonly far greater than it needs to be. Much of what economists learn in their doctorate programs is how to take simple ideas and render them completely incomprehensible. If they do not learn it there, they learn it when trying to publish their papers. (1)