Harvard's introductory economics course, affectionately known as "Ec 10" by government and fine arts concentrators alike, boasts an enrollment of 1,021 students this semester. But Ec 10 is only an introduction that acquaints its students with the basic tools of micro-and macroeconomics. It effectively enables them to read The Wall Street Journal and understand what, for example, a rise in interest rates actually means.
But far fewer students go on to take upper-level economics courses, and many scholars have noted that the science of economics is losing its popularity. John Cassidy recently wrote an article in The New Yorker called "The Decline of Economics" citing one of the reasons for economics' acquired unpopularity since Keynes' death as the perception that economists have established very few sophisticated theories that hold water. Therefore many important economic concepts remain inexplicable. "The most significant developments in the American economy over the past 20 years are the slow-down in productivity growth and the increase in wage inequality, and honest economists admit that they don't have [the answers to] either," Cassidy writes.
Consequently, most Harvard students have their first and last encounter with economics in Ec 10. But, according to an article in last Sunday's New York Times, the same is not true in Russia. Yes, Russia. According to the article, first-graders in Russia are being taught concepts such as profit, loss and capital accumulation. The article reports: "A new textbook published this year, Economics for Little Ones or How Misha Became a Businessman, tells the story of a simple but industrious bear who opens a...store in the forest. His sole competitor is described as Winnie the Pooh's Over-priced Golden Beehive Cooperative, and Misha soon trades his apron for a three-piece suit and a cellular phone to become the forest's first tycoon."
During a tumultuous time in Russian history, in which many Russians still wish to return to a communist system, sewing the seeds of capitalism at seven years-old seems to be the only solution for a country with an agenda to remain capitalist. If Russia is to transform itself into a functioning market economy, its children will have to understand the ethos of one--complete to win. According to the Times article, economics has now become one of the foremost majors in Russian universities, while 10 years ago studying economic theory there was an offense punishable by imprisonment.
So why don't we have to start at age seven? American children don't need to be taught about profit and loss in the first grade because capitalism is virtually synonymous with the United States. We are capitalists in the womb, as it were, because everyone and everything around us is the product of a purely capitalist society. What American five-year-old needs to be taught that the one with the most toys wins?
Most Americans who never learn the basic elements of economic theory offered by Professor Martin Feldstein and his Ec 10 staff can thrive in our capitalist economy. These fundamentals--while helpful for a general understanding of the motivations of certain consumer and firm behaviors and peeking into the bigger picture of inflation, unemployment and growth--are not necessary in order to succeed in America's economy because the basic basics might as well be incorporated into the applesauce we eat.
Meanwhile the Russians seem to be falling in love with economics. This is because Russia still has to indoctrinate the fundamentals of economic theory into its people. We have outgrown this need and have found that modern Americans have very little use for highly abstract and sophisticated theories that fail to explain reality. In order for Russia's transition to a free-market system to be both permanent and stable, grounding economic theories in its children seems to be a must. American children know it naturally; Russian children must be taught it. So while it may strike us as strange that seven-year-olds are reading an "economic-sized" version of Winnie the Pooh, it is evidence of one of our favorite mantras, "If you can't beat 'em, join 'em."
Daniel M. Suleiman's column appears on alternate Wednesdays.