The cold fact is that we live in a world where our wants exceed our resources. We must all choose what wants we will let go unfilled, which we will satisfy, and how we will do so. And since individuals have different wants, all societies must have mechanisms for deciding which resources are going to be used to satisfy which people’s wants. Economics is the study of these choices by both individuals (micro) and societies (macro). That most Americans don’t understand how these choices are made or how the economy works was recognized more the twenty years ago when the Council on Economic Education sounded the alarm about the poor state of economic literacy in the U.S.. Taking a page from a highly successful campaign to raise awareness about illiteracy (Why Johnny Can’t Read), they began to explain: Why Johnny Can’t Choose.
Five years ago, economic illiteracy came home to roost. Too many people and companies had made poor decisions because they didn’t understand the consequences of the choices they were making. The cumulative effect of those bad choices combined with poor government policy and a regulatory environment that looked the other way to put us in the worst economic calamity since the Great Depression. Foreclosures skyrocketed, employment plummeted, government bailouts and big budget deficits ensued. Lots of people suffered and are still suffering.
As we begin to climb out of this huge hole, some of the hardest hit states including Florida have vowed to diversify their economies and return to prosperity through targeted investment in entrepreneurial activity. Universities in these states have been asked to help achieve this objective by educating more students in the STEM disciplines and imbuing them with the entrepreneurial skills and acumen that will lead to the creation of scalable businesses that will become pillars of a new economy.
So when a committee of higher education leaders were asked to recommend ways to streamline the set of courses all students must take to graduate from a Florida college or university, guess which subject was among the courses they decided to remove from the general education requirements? Yep, economics. Anthropology, comparative politics, psychology, sociology and world history were deemed more appropriate to students general education. Really? Really.
When faced with constrained resources and a diverse set of wants, a committee that lacked even a single economist, recommended we eliminate the discipline that studies the exact problem that confronted them. They did this despite the experience of the last five years and the current emphasis state policy makers are placing on entrepreneurial activity and economic diversification.
Business students will of course continue to get a healthy dose of economics. We control these requirements and UCF may still require economics as part of its approach to general education. I would hope so. There is no crime in being economically illiterate, but it is irresponsible for our institutions of higher learning to claim that they are preparing citizens for leadership roles in the twenty-first century, a century that will be driven by a complex world economic system increasingly based on free markets, without providing these same students with a firm grasp of how this system works and influences the opportunities and choices that will confront them. That all UCF students would take these courses at UCF would also offer us greater quality control (and ensure full employment for UCF economists).
But, as UCF business students you should care that with this change many more Floridians will be allowed to graduate from college economically illiterate. These new graduates will vote on government leaders and their policies just like you and as the last five years made clear the decisions these people make about how they allocate their resources will impact your economic and financial future. In short, economic illiteracy generates negative externalities. A course on financial literacy would be useful too, but I don’t want to be greedy. Besides if you understand the economics, you can pick up the finance, while the reverse is less true.
The good news is that it’s not too late to influence the committee’s recommendations. So far, the committee has only asked for comment from faculty but a period of public comment is coming and it would be good for the committee to hear from students, alums and interested citizens. Watch for it. Or if you are so inclined, I would suggest you leave a comment here and I will make sure the right people see all of them at the appropriate time.
Paul Jarley, Ph.D., is the dean of the UCF College of Business Administration. He blogs every week at http://www.bus.ucf.edu/dean. This post appeared on January 28, 2013. Follow him on Twitter @pauljarley.