College Students Need Basic Economic Knowledge


Jason Garshfield
Staff Writer

UCSB students have many general education (G.E.) requirements. If you’re in the College of Letters and Science at the University of California, Santa Barbara, you must meet both general and special subject area requirements in arts, literature, foreign language, writing, world cultures and ethnicity, among other fields. There have even been proposals for new G.E.s, such as one pertaining to gender and sexuality.

Why not establish an economics G.E.? Economics is at least as necessary to our intellectual development as any of these other fields.

I, myself, took Econ. 1 and 2 during my sophomore year as prerequisites for the political science major. The other option for me would have been Econ. 9, a simplified, intro-level class for non-majors, but in the interest of intellectual rigor I decided to take the long route.

I paid greatly for my integrity. Econ. 1 and 2 are steeply-curved classes, but in spite of the damage they did to my GPA and my ego, I consider the introductory economics classes to be some of the most valuable classes that I have taken at UCSB. These courses taught me lessons about society, human behavior and resource allocation that challenged my beliefs, enhanced my critical thinking abilities and changed the way I approach problems. Even the brutal grading curve helped teach me one of the most basic lessons of economics: the law of scarcity.

Today, I barely remember how to measure a negative externality or how to calculate the deadweight loss of a tax burden. But because of my experience with these basic economic concepts, I feel far ahead of the curve when it comes to understanding the economy. The level of economic illiteracy at UCSB and in our society is astounding. Almost every day, I meet people who hold fundamental misconceptions about economics that a simple dose of Econ. 1 could correct.

This is alarming because we are all participants in the political process, and politics and economics are interrelated. Many of the central political questions we face today are actually economic questions, with empirical economic answers.

In fact, economists can help us in this area more than politicians can. To win elections, politicians must give voters what they want, even if it is not economically sound. Economists are different. Because they are removed from the political process, they can study economic questions without this inherent conflict of interest.

Let’s take an example: right now, many students on campus support raising the minimum wage. This is one of the most popular talking points of presidential candidate Bernie Sanders, and it was one of the central demands of the Million Student March last November. But is this good economic policy?

In fact, the minimum wage was one of the first topics we studied in Econ. 1. We learned (and demonstrated through a simple experiment in discussion section) that the minimum wage is a type of price floor for labor — and, like all price floors, a minimum wage law above the market’s natural equilibrium point will lead to a tradeoff, costing some workers their jobs while improving the wages of others.

The Million Student March protesters had a lot of passion, and this is admirable. But how many had taken Econ. 1? How many had studied the economic arguments for and against raising the minimum wage? If we are going to be a politically active campus, and if some of our activism is going to center around economic reform, then we should at least be educated enough to know what we are advocating for.

Many classes at UCSB, including some that satisfy our current G.E. requirements, teach a worldview that is harshly critical of capitalism. As a result, many UCSB students leave college with a negative impression of the free market system. But if UCSB is truly dedicated to the pursuit of knowledge, then it should adhere to the principle of justice known as Audi alteram partem — “listen to the other side.” An econ G.E. requirement would ensure that students get a chance to learn how a capitalist economy actually works before dismissing it as immoral.

I might not have been the greatest econ student ever, but I would take a genuine intellectual challenge over an easy A any day. So long as the current system of G.E. requirements stands, UCSB should establish a requirement that its students learn basic economics. Intellectual rigor demands nothing less.