Monday, August 07, 2006

The Problem with Europe

According to Newsweek, the problem with Europe is that students are taught to distrust capitalism:

when Dariani looks back at his high-school days, a decade ago in the west German city of Kassel, he remembers his teachers warning against exactly what he's doing [being an entrepreneur]. "They taught us the market economy was a dangerous wilderness full of risk and bankruptcy," Dariani says. "We never learned how prices affect supply and demand, only about evil managers and unjust wages."

I have long thought that that good economics education is the foundation for good economic policy. In a democracy, people get the government they want. If the people have warped ideas about how economies work, the result is bad policy.

What the world really needs is more people reading my favorite economics textbook. Fortunately, there is now a European adaptation. The economies of Europe should start to look up soon.