Almost 100 eager high school students gathered at Berry College for one of the last FEE seminars of the summer, Economics of the Real World. These students were ready to explore top current issues and events from an economist’s perspective and learn about the virtues of value creation.
The all-star faculty panel included Dr. Sean Mulholland, professor of economics at Stonehill College in Easton, MA (and a FEE alumnus!); Dr. Paul F. Cwik, professor of economics and finance at the University of Mount Olive; and Professor Michael Clark (also an alum!), the Reemelin Chair in Free Market Economics at Hillsdale College.
Hope for the Future
Starting the seminar on a strong note, Dr. Mulholland asked the students, “What kind of world do you want to live in?” Discussing factors such as violence, life expectancy, child mortality, and wages, Dr. Mulholland pointed out that our world is actually becoming safer and more prosperous. Trends show less violence and violent crimes overall, longer life expectancies and lower child mortality, and higher wages, especially for women. Right now, fewer people than ever before live below the poverty line.
After Dr. Mulholland filled the students with hope for the future, Dr. Cwik initiated the second day of the seminar with his talk, “How Economics Helps You Understand the World," reminding the students that economics is a science and is all about how the world is put together and how humans act and interact. He used several real-life examples to illustrate his points on scarcity, incentives, and things seen and unseen.
Students left with a new understanding of the incentives that play into voting.Continuing the momentum of the day, Professor Clark taught the students about “The Role of Institutions.” By asking some of the students to participate in a hands-on activity, Professor Clark illustrated the concept known as the Tragedy of the Commons, and emphasized the importance of property rights. He talked about how the incentive of owning property reduces the over-consumption of a good or piece of land while also encouraging individuals to take care of and grow their property.
After lunch, Dr. Mulholland came back to show “How Individual Action Runs the World.” The students learned about competition driving innovation in the marketplace, the price-signaling system which allows producers and consumers to know the value of a good, and the difference between human action and human design.
Following this talk, Dr. Cwik challenged the students on “Thinking Through the Tough Issues.” He addressed issues like healthcare and minimum wage, informing students that they need to remember to look at the impact such policies would have on all groups, including politicians, consumers, suppliers, bureaucrats, and special interest groups. For the last part of his talk, Dr. Cwik encouraged students to ask questions about tough issues facing their communities and allowed time to talk through them. Some of the issues mentioned were social security, taxes, school choice and vouchers, and Brexit.
Professor Clark returned later in the afternoon to explain the “Economics of Politics” and the concepts of rational ignorance (it does not make sense for the average voter to be fully informed on all issues) and concentrated benefits and dispersed costs (large group pays for a policy while a small group gains the benefits). Some students were surprised to learn that the probability of deciding an election for a single voter is very close to 0%. While Professor Clark was not trying to dissuade students from voting, he was simply making sure they understood the incentives at play.
Learning from the Past
Kicking off the last day with his talk “Good Intentions vs. Good Results,” Dr. Mulholland mentioned several government policies which, although well intentioned, enacted more harm than good. One of his examples was Prohibition. The policy was fought for by special interest groups and intended to make the country safer by taking away the temptation for people to waste their money and time on drinking. Instead of making the country safer, people simply turned to the black market to fulfill their needs. He highlighted the point that if a good or service is made illegal, it will still be produced but attract violence while attempting to hide from the law.
People should never be discouraged by the uncertainty in starting a business.In the afternoon, Professor Clark started with his talk “Entrepreneurship: Not Just for Rich Geniuses.” He emphasized the fact that anyone can be an entrepreneur and mentioned that people should never be discouraged by the fact that there might be uncertainty in starting a business, thereby inspiring the students.
The guest speaker, Steven Carse, founder of King of Pops, was interviewed by FEE’s Jonathan Welch about his entrepreneurial journey. Students were able to combine all the advice they had heard and the lessons they had learned as they listened to Mr. Carse’s story, and took the opportunity to ask questions of someone with their boots on the ground. He told them it was not always easy, but inspired them to continue with their dreams and not let the fear of failure discourage their enterprises.
To finish the seminar, Dr. Cwik explained the “Virtues of Markets.” Even though the students now understood how a free society could work, Dr. Cwik told the students how to advocate for free markets from a moral standpoint. He summarized the seminar by reiterating that markets require trust and honesty and that trade, the building block for markets, ends in a win for both sides. Even greed and self-interest are channeled into beneficial outcomes since profits are proof that a societal problem has been solved or a need has been met.
In addition to attending lectures to learn more about the tools of economic thinking, students had the opportunity to participate in several activities to better understand private property, the harmful effects of a minimum wage, and the benefits of free trade. Whether it was during structured discussion times, nightly socials, mealtimes, or free time on Berry’s beautiful campus, students were eager to have the chance to talk about these ideas with each other and with the speakers.
After these three days, it was clear that the seminar was a success. Students said their expectations of the seminar were greatly exceeded, and that they were inspired to use what they had learned in their everyday lives.