Economics and Government

William Polley:

"In a way, this brings us back to the question of the value of economic literacy. If the only reason for becoming economically literate was to become a more intelligent voter, then ignorance would be individually rational. However, the economic world would keep right on spinning. Markets would keep right on working -- except to the extent that policy makers, not subject to the constraints of an economically literate population, get in the way. However, there is a larger social issue at stake. Economic literacy has positive externalities. For me the most compelling argument for economic literacy is not to make sure everyone can shift a demand curve, but simply to teach people how to avoid being taken in by fallacies of composition and other logical fallacies.

[. . . .]

. . . . There's a great deal of social value in a citizenry able to recognize free lunch claims and refute them."

What? Positive externalities? This couldn't be another example of externality abuse could it? Probably not. After all, the implication of there being positive externalities would be to subsidize economists.