Evaluating Economic Performance and Policies: A Comment

Abstract

Lester Thurow offers several good suggestions and stimulating thoughts in his critique of the Economic Performance and Policies section in the Framework. Let me outline his central points and my response. Thurow argues that the Framework discussion of economic goals and policies essentially presents a social welfare function for use at the high school level. In his view, this approach is not the way to examine economic policy in the curriculum. Economics has little to say about how the tradeoffs are to be made because we cannot derive the social weights for the economic objectives. Therefore, although a social welfare function is helpful in enumerating the economic goals for high school students, it is not useful for evaluating economic policy. This point makes sense. The Framework appears to overstate the case for a strict evaluation of economic performance and policy. As Thurow notes, we cannot expect high school students to evaluate economic performance and policies because, in addition to the uncertainty about the weighting of goals, the causes and effects of most economic events are still open to study. Just leaving students with the message that we can optimize economic goals and that there are direct trade-offs, as the Framework seems to suggest, is too simple an explanation for what is happening in a complex world. While I agree with this main point, it also presents a serious problem for effective economics instruction at the precollege level. The problem is that high school students learn from simple examples (as do college students, adults, and voters). To start teaching by focusing on the myriad of the possible relationships among economic goals, and by showing a series of counterpoints where trade-offs among goals do not exist when they are thought to exist by many economists, makes the teaching of economics more difficult and frustrating for the student than is necessary. It is as if we put the word equal before all other beings, and thus turned a meaningful phrase into nonsense for the student. Therefore, the Framework is correct in suggesting that we begin teaching students to evaluate economic performance or policies by identifying the basic economic goals found in most societies and then illustrating what appears to be some of the basic trade-offs among those goals (e.g., equity and