Zinger or below the belt? WSJ argues that "liberals and Democrats" are economically unenlightened

An editorial in today's WSJ (Are You Smarter Than a Fifth Grader? ) argues that "self-identified liberals and Democrats do badly on questions of basic economics."

Written by a George Mason economist, the article is admirably transparent in its reasoning. The analysis turns on a battery of Econ 101-style questions on a Zogby poll (e.g. "Restrictions on housing development make housing less affordable.) It turns out that self-identified Republicans and libertarians score substantially better on this quiz than Democrats. Conclusion: the left doesn't understand, or is unwilling to accept, the fundamental economic tradeoffs that exist in any society. In the author's words, the left is "economically unenlightened."

Usually when I see this kind of thing in the WSJ, I'm inclined to ignore it as partisan sniping. In this case, they lay out their methodology thoroughly enough to invite inspection. And against my will, I find myself agreeing, because I don't see anything wrong with the analysis. Here's my reasoning.

The first thing to check is the quality of evidence. In order to score respondents' answers, the researchers had to designate right and wrong answers to each question on the quiz. What questions, exactly, were asked? Did the scoring reflect objective truth, or was there libertarian dogma in the way things were framed?

Here are the 8 questions.

Question	"Unenlightened" Answer	Validity
1. Restrictions on housing development make housing less affordable	Disagree	High
2. Mandatory licensing of professional services increases the prices of those services	Disagree	High
3. Rent control leads to housing shortages	Disagree	High
4. Free trade leads to unemployment	Agree	Low
5. Minimum wage laws raise unemployment	Disagree	Medium
6. Overall, the standard of living is higher today than it was 30 years ago	Disagree	High
7. A company with the largest market share is a monopoly	Agree	Medium
8. Third World workers working for American companies overseas are being exploited	Agree	Low

On the whole, these questions strike me as having high validity. They measure what they intend to measure. A respondent who answers these questions correctly probably does have a better understanding of the likely consequences of economic policies. And therefore, it looks like a substantial part of the left's constituency is unwilling to come to grips with hard choices.

I'm not sure I want to believe that. Does anybody see a way out of this conclusion?



Notes on specific questions:
Questions 1 through 5 focus on fundamental tradeoffs in price, quantity supplied, and market intervention. The first three are well-grounded in evidence. The fourth is true -- in the long run. The last one is contested, but (having read up on the subject for a final debate in a policy analysis class) the proponderance of evidence supports this conclusion. Bottom line: both theory and evidence strongly suggest that the tradeoffs described in these questions are real forces in society.

Question six is a simple factual question about recent economic history. Question seven is a vocab question.

Question eight is more values-based. A typical economist will tell you that Third World workers aren't being exploited, because they voluntarily choose to accept and continue in those jobs. Companies aren't exploiting people; they're giving them new opportunities. The counterargument is that (some) workers are led into sweatshop jobs under false pretenses, and held there against their wills. This is exploitation. Additionally, one could argue that it is "exploitation" in a moral sense for a company to pays its workers only Third World wages plus a fraction when it could pay more.