Bluematter.

Mark Harrison has a thought provoking piece on staff and student attitudes towards free trade at Warwick, a leading economics department in the UK. The results are striking, if not entirely unexpected. Loosely speaking, they can be seen to reflect the difference in opinion between professional economists and an intelligent, generally privileged subset of the population with a keen interest, and some experience, in economics.

Harrison asked first-year undergraduates and academic staff to state whether they agreed with six propositions about trade:

1. Industries can be classed as essential or inessential, or ranked in order of national priority
2. When competition takes place in international markets, some countries gain and some countries lose
3. Exports are a gain to each country, and imports are a loss
4. A sign of a country’s economic strength is the scale on which it attracts capital from the rest of the world
5. Import taxes and restrictions, and export subsidies, add to a country’s total employment
6. Actions that are undertaken for profit or self–interest are morally questionable for that very reason.

His results?

“Pop mercantilism” has majority support among first–year students: more than three fifths would agree that industries or activities may be ranked in terms of their importance to society, and that some countries lose from taking part in international trade.

Staff opinion was most divided on the questions whether or not some countries lose by taking part in trade, and whether or not a capital account deficit may indicate relative economic strength, but even here the dissenters were in a small minority. No member of staff would agree that the pursuit of self–interest is immoral per se.

The gap between student and staff attitudes is widest on the propositions that industries or activities may be ranked in terms of their importance to society (staff and student respondents disagreed in the ratio 86% to 21%), and that a country may lose from trade (64% to 29%).

While this study took place back in 2000, I doubt much has changed since then. This brings me to what has been a recurring theme on this blog: People, including the 'intellectual elite' at Warwick or Harvard, have trouble understanding the fundamental lessons of economics.

Economists now have a solid grasp of how the social world works and what steps we need to take to improve it. Unfortunately, we are not nearly as good at telling why some ideas fail to filter through to voters and policy makers.

Understanding public perceptions of economics and loosely branded 'economic policy' is a vastly under-researched area, and many academic economists seem to have taken science's definition as 'disinterested study' too close to heart. While I agree that in many cases reform runs into vested interests, it is usually economic illiteracy that allows these very interests to make a persuasive, if in reality flawed, case to voters and policy makers.

If our aim is not only to understand the world but also to make it better, we need to take a step back and redirect some of our energies away from understanding and towards explaining. And to do this we first need to grasp what the public biases are, why they are so persistent in the face of mounting evidence - and, most importantly, what we can do to overcome them.

Update: Bryan Caplan, via Alex Tabarrok, makes a similar, narrower argument about anti-market bias.