Is Your Economic IQ?
Could You B A Sisyphus?
Judd W. Patton
“A widespread understanding of the operations and problems of the U.S.
economic system is essential if Americans are to meet their
responsibilities as citizens, voters, and participants in a basically private
enterprise economy.” So proclaims
a 1966 U.S. Senate resolution. This leads to an obvious question: What is your (the reader’s) Economic IQ
(Intelligence Quotient)? Can you
carry out your responsibilities as a U.S. citizen based on your understanding of
our free-market economy, or would your economic understanding be akin to
Who is Sisyphus, you ask? Well,
in Greek mythology Sisyphus was a wicked king condemned to hades (hell) to
perform the unending task of rolling a heavy stone up a steep hill, only to have
it roll down again when it reached the top.
Clearly his efforts were futile and to no good purpose.
Sisyphus suffered severely. In
the economic realm, by analogy, Sisyphus may symbolize individuals who impede
economic progress. Their thinking
contains economic fallacies, myths, and half-truths that cause them to follow
our political leaders blindly or advocate unsound, counterproductive,
dead-end economic policies. Unknowingly,
they perpetuate obstacles to the detriment of themselves and their fellow
citizens by their low Economic IQ’s.
Like Sisyphus, the fruits of their labor bring no reward or
accomplishment, just unending aggravation, futility, and failure to the economy.
Unfortunately, many people today follow in the footsteps of old uncle
Sisyphus. As someone said, “ If ignorance paid dividends, most of us would
make a fortune on what we don’t know about economics!” But unlike Sisyphus,
those with low Economic IQ’s
are not condemned to continue in futile efforts to achieve individual economic
betterment and public policy success. Every
person, no matter what their station in life, can dramatically increase their Economic
IQ if they are so
motivated! It just takes a
systematic plan and three keys. It’s
as easy as one, two, three to unlock the door to a higher Economic
Learn to Use Time-Lapse Thinking
The art of economics consists in tracing some act or policy not merely as
to its immediate economic effects, but also as to its long-run effects.
Like watching a flower blossom in a few seconds through the magic of
time-lapse photography, one must learn to see the “hidden” long-term effects
of economic actions. For example, many actions seem beneficial in the short run.
Drinking excessively, using one’s credit card to consume beyond one’s
means, or the governmental printing of money to cover huge deficits, all may
seem justified in the short run. Regardless,
thoughtful time-lapse thinking reveals the disastrous nature of these actions. Those with high Economic IQ’s always grasp the
“day of reckoning” in such human actions.
Learn to Think Without Tunnel Vision
The art of economics also consists in tracing the consequences of any act
or policy not merely for one special interest group, but for all groups.
In other words one’s perspective or vision, by analogy, must include
that which is directly in front of one’s eyes and that which is
in the peripheral areas as well. For example, a protective tariff can clearly be seen to
benefit a domestic producer. It
limits foreign competitors. But the
complete economic perspective notices the detrimental effects on: (1) U.S.
consumers (they will pay more for products), (2) foreign producers (their
incomes will decline), and (3) U.S. exporting firms (foreign demand for U.S.
products will decline). Only tunnel
vision can justify the beneficial nature of protective tariffs.
Learn to avoid such thinking at all costs.
Study Good Economics
Finally, initiate a planned, systematic course of study. Study good economics by free-market economists and writers,
and avoid bad economists, writers and pundits who ignore the first two keys!
Here is my advice. Start
expanding your Economic IQ by reading a classic work on economics by
Henry Hazlitt entitled, Economics In One Lesson.
It’s available from the Foundation for Economic Education (FEE), the
Mises Institute and Amazon.com. The Mises Institute has an outstanding Study
Guide on Economics. Go to: www.mises.org.
The FEE Web site is: www.fee.org.
Click on their Online Bookstore and use it, along with the Mises Study Guide, as
part of your master plan to improve your economic knowledge, understanding and
wisdom, and say “good-bye” to Sisyphus forever!
Economics is the proper study of every individual.
Be a committee of one to raise your Economic IQ, starting today!
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