AIER Helps Bring Economics to the Classroom

– September 24, 2018 Reading Time: 3 minutes

Students don’t learn enough economics, neither as a subject nor as a way of thinking across the curriculum. AIER was proud to sponsor and partner on an exciting event last week called “Teach the Teachers.”

I was privileged to work with Professors Tawni Hunt Ferrarini of Lindenwood and Donald G. Fell of FTE and the University of Colorado Colorado Springs on a day-long program for high school and middle school teachers from around the St. Louis area entitled “Fundamentals of Environmental Economics.”

The participants weren’t the only ones who learned a great deal. I had several aha moments watching Professor Fell, who led most of the day’s sessions, expertly explain the importance of markets, scarcity, and tradeoffs as they relate to environmental issues. What he did was no small feat, as the attending teachers were drawn from all backgrounds, with a wide range of exposure to economics and political views.

The Power of Concrete Examples

Economists, especially those of us most forcefully advocating free markets, usually speak a common language that allows us to talk to each other in generalities and abstractions. Watching Professor Fell was a master class in how to leave that language and those abstractions behind when talking about markets to people outside of our bubble.

It quickly became clear to me that participants without much training in economics, or those who tended to favor more heavy-handed government interventions on environmental issues, would not respond to conceptual or philosophical arguments. After a quick crash course in ideas like scarcity, marginal thinking, and externalities, Professor Fell dedicated most of the day to specific problems and solutions. The results were clear.

The first group exercise of the day was about overfishing. Professor Fell had six teachers participate in several rounds of a simulated fishery, with a bit of real money at stake. The tragedy of the commons became crystal clear as they learned that without property rights, people fish too much, too soon. By tweaking the rules in several ways, Professor Fell showed how defining property rights was superior to any top-down solution.

I again saw the power of concrete examples in my own session with the teachers, which I based on a recent AIER article about our town’s ban on plastic water bottles. My goal was to get the teachers to question the assumption many of us make that environmental activism means protests and advocacy designed to make governments take action.

The teachers debated the merits of the political approach taken here in Great Barrington versus the more voluntary approach I sketched out in my article. The debate was lively, with teachers taking both sides. I hope the exercise will lead to similar debates among students in the teachers’ classrooms.

The final group exercise, on land use, most dramatically drove home the lessons of the day. The teachers were put into groups tasked with deciding where to locate a new elementary school. The exercise was adapted from a real-life case in Florida and featured a mind-bending array of constraints and tradeoffs. In picking among nine possible locations for the school, the teachers faced endangered species, town and historic heritage sites, student safety, the needs of a job-creating new factory moving to town, angry local residents at a town hall meeting, and even an adult nightclub.

The complexity of the exercise made the underlying lesson very clear. We would all like to protect the environment and do many other things, but difficult pragmatic choices that require sacrificing some of those things are almost inevitable.

Environmentalism Needs Economics

Focusing on specific issues drove home not only the economic realities of environmental policy making, but also the true nature of free market ideas. Many people believe the myth that free markets and environmentalism are incompatible, that believing strongly in one means excluding the other.

But market-based solutions are often far more effective, and have far fewer unintended consequences, than top-down regulations. In thinking through numerous case studies, the attending teachers had to let go of any preconceived notions and embrace the necessity of economic thinking when protecting and improving our natural environment.

We once again thank Professors Tawni Hunt Ferrarini and Donald G. Fell for what we hope will be the first of many collaborations.

Max Gulker is a former Senior Research Fellow at the American Institute for Economic Research. He is currently a Senior Fellow with the Reason Foundation. At AIER his research focused on two main areas: policy and technology. On the policy side, Gulker looked at how issues like poverty and access to education can be addressed with voluntary, decentralized approaches that don’t interfere with free markets. On technology, Gulker was interested in emerging fields like blockchain and cryptocurrencies, competitive issues raised by tech giants such as Facebook and Google, and the sharing economy.

Gulker frequently appears at conferences, on podcasts, and on television. Gulker holds a PhD in economics from Stanford University and a BA in economics from the University of Michigan. Prior to AIER, Max spent time in the private sector, consulting with large technology and financial firms on antitrust and other litigation. Follow @maxg_econ.