Friday, March 29, 2019

Visiting Column # 12 -- Shall We Teach THIS, Please?

We are subjected on about a weekly basis to factual errors in economics on the part of Rep. Alexandria Ocasio Cortez, the "honors" graduate of Boston University in economics and, until recently, bartender, who appears to have sucked the oxygen out of contemporary political discourse.

This leaves us to determine if the biggest downer is that the people of her district in the Bronx couldn't come up with anyone better than a bartender to represent them, or for the poor Economics Department up there at BU, that gives degrees "with honors" to someone who apparently can barely count change.  Or, worse, that their degree is so useless that six years later their honors graduates are reduced to tending bar.

Or, perhaps, the Democrats, who are stuck having this ninny representing the current thinking of their party.

Either way, this all sort of led me to the thesis of this piece.  You don't have to have an economics degree, even from BU, to know that when you chase Amazon out of town and claim the tax break "can be spent elsewhere" as if it exists after chasing away the jobs it would produce, you're showing a total lack of understanding of what you are supposed to have studied.

But do we actually think that most incipient high school graduates from the class of 2019 would be able to explain why her logic is totally blank?  I don't.  I don't think so because I wasn't taught that sort of thing as a high school senior in 1969, and I'm pretty sure that the left has sufficiently drained any remaining unbiased economics training out of contemporary curricula 50 years since.

Now, I don't think that we have to mandate a full year of economics for high school students, but with the "block scheduling" more prevalent in today's high schools, featuring half-year classes, it would seem that we could provide a semester's curriculum on "handling money for life" that would not only help teach teenagers about micro-economic concepts like debt, savings and compound interest that affect their family, but perhaps some macro concepts about business, taxation and tariffs so they understand the terms.

There is one specific lesson that I believe spans both the micro and macro sides, that I think could be taught in two sessions and which would have immense benefit to every student, even if it is NEA union members doing the teaching (ugh).

That is the notion of the value of labor.

I'm on record as having espoused the notion that people should be paid not what they need, but what their value is to their employer -- within reason, of course ("reason" includes the value of longevity, the prevalence of available labor, the niceness of the employer, etc.).  That value is the fundamental driver of wages, after all, and it would be extremely helpful if children came out of high school with an understanding of that -- seeing things, albeit briefly, through the eyes of the employer.

My first professional job was for $11,000 a year as a programmer for the old Burroughs Corporation in Boston.  But before that time, I had made (in no order) $3.00 an hour behind the desk of a bowling alley, $3.00 an hour working landscaping, $2.50 an hour behind the desk of a different bowling alley, $3.00 an hour sweeping up a cabinet-maker shop, and $8,000 a year as the statistician for the Registry of Motor Vehicles in Massachusetts (which I don't regard as "professional" since I did only clerical work).

No one taught me this lesson, but I came to understand, osmotically, that the reason that I wasn't paid more than I was, was because my work wasn't really worth more to the people paying me.  I could have done a brilliant job behind the desk of that bowling alley, but it wouldn't have generated any real amount of new business for the place that I could claim credit for -- my job was to keep things going and avoid problems.  Avoiding problems was worth $3.00 an hour in 1971, and if I didn't take it, some other kid would.

What, I would ask, if today's high school graduates had at least a fundamental understanding of business accounting?  Not that they have to get the notion of debits and credits and double-entry stuff and the like, but at least to understand the difference between an income statement (or P&L) and a balance sheet.  In other words, to know what an asset or a liability is, and why having a high income doesn't mean, a priori, that you are wealthy.

If they came out knowing that "tax breaks for the wealthy" is an oxymoronic concept, since we don't really tax "wealth" except for property taxes, that might be nice.

If they came out knowing that a business can have high revenues but not be profitable, that would be nice.  Top line, bottom line ... that sort of thing.

Mainly, though, it would be great if they came out with enough understanding of how a business makes profit.  How it earns money but has to expend that money on labor, rent and operating expenses, and if anything is left, well, that's what "profit" is.  How the amount left after rent and operating expenses determines what kind of salary budget can be available, and how that becomes the real driver of wages in the private sector.

And that the private sector operates under different guidelines from the way government works, mostly.

If our next generation applies for a job with the understanding that what they will be paid stems not from how big their mortgage is, or how many kids they have, but rather what the business has available to pay employees, well, that would be a winner.

Because then they would understand that, in order to earn more, they would have to make the connection between the service they provide their employer and how that service produces more revenue or lowers costs.  If a better job brings in more revenue to the company, then it can be rewarded with a raise.

It seems so simple, but if even honors graduates from Boston University in economics don't grasp that concept, then perhaps we need to find a way to get it across in high school.

I'd love to teach it.  May I, please?  Oh, wait.  I just did.

Copyright 2019 by Robert Sutton
Like what you read here?  There are over 1,000 posts from Bob at, and after four years of writing a new one daily, he still posts thoughts once in a while as "visiting columns", no longer the "prolific essayist" he was through 2018, but still around.  Appearance, advertising, sponsorship and interview inquiries cheerfully welcomed at or on Twitter at @rmosutton


  1. Beautifully put. However, not only do kids not get these concepts, we have senators, journalists, government officials, and a rather depressingly large fraction of adults in America who need this education.

    1. And, George, for them it is too late. We desperately need to teach the "value of labor" lesson in the schools, but those NEA-addled people who teach these days can't be relied upon to understand that lesson, let alone convey it.

  2. I'm afraid the social justice warriors are not only taking over liberal arts subjects in university after university, but it has clearly trickled down into high schools, where special 'victimhood' style classes are now taught, and are sometimes required. (Experience is speaking here). There are more than a few economics departments that have been tainted, but I'm afraid we're going to see some of them go completely over to sjw-dominated subjects. The future is bleak unless sober people begin to push back, hard and long.