Part of Ron Paul’s mission has been to simplify economic ideas into terms average Americans can understand in order to point out the crimes of Keynesian policies and the Federal Reserve. In doing this he has turned an army of young people on to the sound principles of Austrian economic theory, but the other side is fighting back.
It is no surprise with the number of left-leaning educators in universities throughout the United States that those who prefer Keynesian (or spend-your-way-out-of-debt) economic theory dominate the market on indoctrination. And as it becomes increasingly clear that this mainstream economic policy is deeply flawed and unsustainable, the Keynesians are working to make younger audiences favor their ideas.
The Federal Reserve Bank of New York touts an “education” initiative called the High School Fed Challenge that it claims is an effort to “bring real-world economics” to high school classrooms. In a series of competitions hosted by Fed board members, students compete in analyzing economic current events to determine which are most able to sound like Federal Reserve Chairman Ben Bernanke in delivering suggestions for a course of monetary action.
NPR reported on the most recent installment of the competition which was won by students from Montclair High School in Montclair, N.J.: “The students are clearly very good at parroting Ben Bernanke. But they also seem to have a solid grasp of what the economy means for their own lives…Obviously, putting the words ‘Fed Challenge’ on a college application looks impressive. But there’s also a sense that understanding all this stuff really matters right now. In the finals, the students answer questions about things the people who run the Fed are debating right now — from quantitative easing to the outlook for inflation.”
While only a small number of students participate in the Fed Challenge, the initiative represents what many people might recognize as a broader problem in the state of modern economic thinking: Many leading economists simply have not been largely exposed to Austrian economics. The efforts of people like Paul and Economic Policy Journal publisher Robert Wenzel, however, are slowly bringing the conservative economic idea into the conversation.
Wenzel writes of a speech he was recently invited to give at the Federal Reserve in New York:
I then asked one economist ( a 20 year plus veteran of the Fed) if he was familiar with Austrian economics. He said that in college he had taken two history of economics courses and then said that the Austrian school is part of the classical tradition. This told me that he was not aware of the important differences between the Austrian school and classical economics (and also the neo-classical tradition).
…Overall, I was simply amazed at the lack of knowledge of these economists about the Austrian school. It was very close to non-existent. This points out the extremely important work being done by the Mises Institute and also Ron Paul. The number of students with an understanding of Austrian economics is increasing at an exponential rate. I can’t imagine that future economists, even those who work for the Fed, won’t have some acquaintance with Austrian economics thanks to MI and Ron Paul.
Maybe if the trend continues, it will become normal at some point in the future to read an economic editorial in The New York Times that touts the value of Austrian ideals rather than the Keynesian nonsense regularly disseminated by the likes of Paul Krugman.