I learned of this on Noah Smith's blog Noahpinion, where many an economic idea or controversy is artfully and entertainingly discussed. Noah is rightly intrigued by this paper, by Paola Sapienza and Luigi Zingales, entitled "Comparing Beliefs of Economists and the Public," in which it becomes obvious that the average citizen doesn't think much of economists' notions or expertise, treating them more like zany, out-of-touch Zen masters than people with relevant ideas.
I don't agree, but there's nothing more emblematic of our time than the average citizen's contempt for experts, especially in the area of money and spending and counting and predicting based on it. The average citizen thinks, "I'm broke, I'll stop spending. Why doesn't the government get it??!!?" Of course, what the average citizen forgets is that most of us are in hock up to our eyeballs already, with mortgages, car loans, and credit-card debt, and are in no position to criticize. Plus, they also forget that governments don't function like households, and they also forget what they don't know yet, which is, unfortunately a lot. But I digress.
The sharpest difference between the "expert" economist and the average American, according to Sapienza and Zingales' data, is in the area of trade. Most economists agree that free trade is superior to managed trade -- or protectionism, if you will -- because although free trade can have deleterious effects on certain industries, especially in developed nations with a heretofore higher wage structure, in the long run winners and losers in free-trade battles will both win in eventual absolute terms. Or something like that.
|The Old South: Talk about cheap labor.|
The average American thinks differently. If the American South used to have a robust textile industry that was decimated by the availability of cheaper textile goods from Asia, then the average American would conclude that our government should have prevented that from happening, should have "protected" us from this consequence.
|The New South: Atlanta tech CEOs ring the opening bell.|
An economist might see a bigger picture, one where things would settle down into a set of interconnected comparative advantages among nations and regions. Whereas Indonesia might gain a comparative advantage in textiles because of cheap labor, Atlanta, Georgia, might switch from textiles over time to technology because of our comparative advantage in that area. In fact, this is the kind of change countries and regions all over the world undergo constantly. And if in the end, burgeoning middle classes develop all over the world, then these richer, healthier, stronger economies will begin to consume more, and that consumption might be of technology from Atlanta, Charlotte, Jacksonville, etc.
As standards of living rise around the globe, education flourishes and citizens begin to demand more attention be paid to areas like healthcare and the environment, which can only help the collective population of the planet. Do you think, for example, that an expanding middle class will put up with the pollution in China as we witnessed just this week? See the picture below, and, yes, the answer is no.
|Beijing, January 2013: This is not fog, my friends.|
Still, I don't expect the average American to take all these things into account. They generally see things only in their own backyards, and it's easier to blame the government, or foreigners, or "libtards" for their misfortunes. Sometimes that can be true, as in Washington's recent failure to include a public option in Obamacare.
No, the average American is too busy shopping at Walmart -- buying up a slew of cheap Asian textiles -- to pay attention to trade issues. But they'll still have an opinion about it, even if it runs counter to the way they actually conduct themselves in the regional, national, or world economy.
Until and unless education can work to reduce ignorance, or the media begin to understand economics enough to help in this war against ignorance, we can expect the citizenry to continue to march off to Walmart, max out their credit cards, while marching around chanting "Buy American" or "Guvmint get your hands off my Medicare" or "What part of 'stop running up deficits!' don't you understand??!"
Good grief. If only ignorance truly were bliss. We're beyond that now, in the Internet Age, where ignorance is, uh, contagious.
|Attention, Walmart shoppers: Don't forget to stay within your budgets!|