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Todd Zywicki writing for Volokh Conspiracy reports that a new study finds that conservatives and libertarians are more knowledgeable about basic economic concepts than are progressives and liberals:

Some of the results in this new article by Zeljka Buturovic and Dan Klein in Econ Journal Watch (a peer-reviewed journal of economics) are startling:

• 67% of self-described Progressives believe that restrictions on housing development (i.e., regulations that reduce the supply of housing) do not make housing less affordable.
• 51% believe that mandatory licensing of professionals (i.e., reducing the supply of professionals) doesn’t increase the cost of professional services.
• Perhaps most amazing, 79% of self-described Progressive believe that rent control (i.e., price controls) does not lead to housing shortages.

Note that the questions here are not whether the benefits of these policies might outweigh the costs, but the basic economic effects of these policies.

Those identifying as “libertarian” and “very conservative” were the most knowledgeable about basic economics.  Those identifying as “Progressive” and “Liberal” were the worst.

Zywicki adds that the propositions tested by Buturovic and Klein are basic and well-known to even first year economic students:

It would be hard to find a set of propositions that would meet with such a degree of consensus among economists to rival these propositions–which boils down to supply restrictions raise prices and price controls create shortages.  These are issues on which economic theory is exceedingly clear, well-confirmed over decades of empirical support, and with a degree of unarguable consensus among trained scholars in the field. 

Given what economist and political philosopher Thomas Sowell has said about the conflict between those with a conservative, or constrained, vision of the world and those with a liberal, or unconstrained, vision of the world, it’s unsurprising that the authors of this study have found that the latter lack an understanding of basic economic principles.

Conservatives, Sowell says, think of the world, and especially humanity, as containing limits. Liberals think of the world, especially humanity, as being unlimited. In short, the former believe that societal constraints are necessary because man is not capable of constraining himself. The latter believe in the virtual limitlessness of human potential.

Here’s Sowell from his classic A Conflict of Visions:

Running through the tradition of the unconstrained vision is the conviction that foolish or immoral choices explain the evils of the world – and that wiser or more moral and humane social policies are the solution.

In the constrained vision, social processes are described not in terms of intentions or ultimate goals, but in terms of the systemic characteristics deemed necessary to contribute to those goals – “property rights,” “free enterprise,” or “strict construction” of the Constitution, for example.

In other words, conservatives focus on social processes while liberals focus on direct social solutions.

Economics is the study of the process of allocating scarce resources.¹ One of those scarce resources is human potential. Consequently, because liberals - those with an unconstrained vision of the world – don’t believe (at least in theory) that a scarcity of human potential exists, they are bound to misunderstand or refute the basic tenets of economics which are premised on the very fact of that scarcity.

Footnotes:

¹  Economics was defined by Lionel Robbins in a 1932 essay as “the science which studies human behaviour as a relationship between ends and scarce means which have alternative uses.”

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