{"id":325146,"date":"2024-05-01T10:16:39","date_gmt":"2024-05-01T08:16:39","guid":{"rendered":"https:\/\/climatescience.press\/?p=325146"},"modified":"2024-05-01T10:16:42","modified_gmt":"2024-05-01T08:16:42","slug":"economic-education-has-become-economic-disinformation","status":"publish","type":"post","link":"https:\/\/climatescience.press\/?p=325146","title":{"rendered":"Economic education has become economic disinformation"},"content":{"rendered":"\n
\"\"<\/figure>\n\n\n\n

<\/p>\n\n\n\n

From CFACT<\/a><\/p>\n\n\n\n

BY PER BYLUND:<\/em><\/p>\n\n\n\n

Modern economics is in terrible shape. But economics education appears to be worse still. This becomes clear when discussing basic economics with those who have taken courses in the field. Rather than doing away with economic misunderstandings and outright nonsense, economics education apparently provides students with a pseudoscientific rationale for their illusions.<\/p>\n\n\n\n

Two such ideas are annoyingly common. One is the view that markets can only work under perfect conditions. The other is that economic growth requires that profits tend toward zero. Yes, they are ridiculous, but they are so commonly held (and believed so strongly) that they suggest a fundamental failure of economics education. Whether or not they are explicitly taught, it is easy to see how an economics education that focuses on models rather than understanding can lead to\u2014if not create\u2014such misperceptions.<\/p>\n\n\n\n

\u201cMarkets Only Work under Perfect Conditions\u201d<\/strong><\/h4>\n\n\n\n

Introductory economics courses often take the perfectly competitive model as a starting point so as to introduce students to economic thinking. It makes sense to do it this way. By assuming away complexities, students can be introduced to the economic way of thinking, ceteris paribus reasoning, and supply-and-demand analysis.<\/p>\n\n\n\n

The approach is innocent but can be counterproductive or even destructive unless students also learn that a model is merely a simplified version of (and thus different from) reality. The model is not reality, and its assumptions are not real, but because of its simplified assumptions, it facilitates analysis of reality. A model is a tool.<\/p>\n\n\n\n

This obvious fact seems to not be communicated to economics students, who instead adopt the model wholesale as not only a description of but a necessary condition for reality. In other words, because the supply-and-demand diagram used on the blackboard relies on \u201cperfect information,\u201d many students conclude that real markets only work under such conditions.<\/p>\n\n\n\n

It is of course the other way around: markets work because they solve or alleviate the problems that are excluded from the model. As Friedrich Hayek pointed out, there is no competition in the perfectly competitive model. All such activities are assumed to have already taken place so that the allocation under end-state efficiency can be explained\u2014and the economic trend in markets therefore uncovered. But students somehow learn the exact opposite.<\/p>\n\n\n\n

\u201cEconomic Growth Requires That Profits Tend toward Zero\u201d<\/strong><\/h4>\n\n\n\n

This idea is similarly a misapplication and misunderstanding of a model presented to students. In the static model of the economy, under assumptions of perfect information and zero transaction costs, economic profits will be zero. This is mainstream economists\u2019 rather quirky explanation of economic efficiency: because all opportunities have already been taken advantage of, value production is maximized.<\/p>\n\n\n\n

As follows from this model logically, profits tend toward zero as market reality closes in on \u201cperfect\u201d competition assumptions (that is, the problems are solved or alleviated). There is empirical support for this, too: profits tend to fall in commodity markets and mature industries that are no longer innovative (the low-hanging fruits have been picked). Producers compete on cost rather than value. But this does not mean the economy is in an end-state; it only means some industries (such as grain production) have come to the end of the road in terms of product development\u2014entrepreneurs see little or no opportunities for new value creation.<\/p>\n\n\n\n

In reality, economic growth is the process of closing in on this highly theoretical end-state (which we, as Austrians realize is only<\/em> theoretical\u2014it cannot and never will be achieved). Our higher standard of living (economic growth) is the result of innovations that create more value\u2014it is not the result of an absence of innovations.<\/p>\n\n\n\n

Education as Disinformation<\/strong><\/h4>\n\n\n\n

That students struggle with understanding the use and value of models, and may draw the wrong conclusions when studying market forces in the abstract, is unfortunate but understandable. It is the duty of the economics instructor to make sure students do not get the wrong ideas\u2014that they go home with a greater understanding of how economies and markets work. Education, after all, should be enlightening and provide the student with new knowledge.<\/p>\n\n\n\n

But somehow, economics education fails to communicate the obvious fact that markets solve<\/em> problems, not that they require that all problems have already been solved. And that economic growth is the creation of new value<\/em>, not the absence of creating such value.<\/p>\n\n\n\n

The failure of economics education is not merely the unproductive use of instructors\u2019 and students\u2019 time. As the above examples show, it is, in fact, destructive\u2014students of economics get the wrong ideas and, therefore, graduate with less (not more) understanding of how markets and economies work.<\/p>\n\n\n\n

Economics education with this outcome is disinformation, and we are better off without it.<\/p>\n\n\n\n

Per Bylund, PhD is a Senior Fellow of the Mises Institute and Associate Professor of Entrepreneurship and Johnny D\u2026<\/em><\/p>\n\n\n\n

This article originally appeared at\u00a0The Mises Wire<\/a><\/em><\/p>\n\n\n\n

<\/p>\n","protected":false},"excerpt":{"rendered":"

Modern economics is in terrible shape. But economics education appears to be worse still. This becomes clear when discussing basic economics with those who have taken courses in the field. Rather than doing away with economic misunderstandings and outright nonsense, economics education apparently provides students with a pseudoscientific rationale for their illusions.<\/p>\n","protected":false},"author":121246920,"featured_media":325148,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_coblocks_attr":"","_coblocks_dimensions":"","_coblocks_responsive_height":"","_coblocks_accordion_ie_support":"","_crdt_document":"","advanced_seo_description":"","jetpack_seo_html_title":"","jetpack_seo_noindex":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","default_image_id":0,"font":"","enabled":false},"version":2},"jetpack_post_was_ever_published":false},"categories":[1],"tags":[691818946,691820955,691828433,691828432],"class_list":{"0":"post-325146","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","6":"hentry","7":"category-uncategorized","8":"tag-disinformation","9":"tag-economic-growth","10":"tag-model","11":"tag-modern-economics","13":"fallback-thumbnail"},"jetpack_publicize_connections":[],"jetpack_featured_media_url":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2024\/05\/0College-classroom.jpg?fit=2550%2C1645&ssl=1","jetpack_likes_enabled":true,"jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/paxLW1-1mAi","jetpack-related-posts":[{"id":418380,"url":"https:\/\/climatescience.press\/?p=418380","url_meta":{"origin":325146,"position":0},"title":"Merry Christmas Germany: 15 years of permanent stagnation in Germany to be realistic","author":"uwe.roland.gross","date":"23\/12\/2025","format":false,"excerpt":"Germany's economic future looks uncertain, with forecasts suggesting up to 15 years of stagnation. The Ifo Institute warns that without significant structural reforms and an increase in workforce potential, Germany's growth could flatline by the end of the decade and even become negative in the 2030s. Germany has been often\u2026","rel":"","context":"In \"economic crisis\"","block_context":{"text":"economic crisis","link":"https:\/\/climatescience.press\/?tag=economic-crisis"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/12\/0AQMpgChlEPlFbNnuXtMNS_RG619SyMUOxh7G-aT9XPHtIam3DMoAvBdf5Y1wjN9vUnscguPqWyFlC0mtJlvs7BGIq82vh-Qzy9SXebveDNnq_e2bGtBHsr60gWxCbmP-1.jpeg?fit=1200%2C671&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/12\/0AQMpgChlEPlFbNnuXtMNS_RG619SyMUOxh7G-aT9XPHtIam3DMoAvBdf5Y1wjN9vUnscguPqWyFlC0mtJlvs7BGIq82vh-Qzy9SXebveDNnq_e2bGtBHsr60gWxCbmP-1.jpeg?fit=1200%2C671&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/12\/0AQMpgChlEPlFbNnuXtMNS_RG619SyMUOxh7G-aT9XPHtIam3DMoAvBdf5Y1wjN9vUnscguPqWyFlC0mtJlvs7BGIq82vh-Qzy9SXebveDNnq_e2bGtBHsr60gWxCbmP-1.jpeg?fit=1200%2C671&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/12\/0AQMpgChlEPlFbNnuXtMNS_RG619SyMUOxh7G-aT9XPHtIam3DMoAvBdf5Y1wjN9vUnscguPqWyFlC0mtJlvs7BGIq82vh-Qzy9SXebveDNnq_e2bGtBHsr60gWxCbmP-1.jpeg?fit=1200%2C671&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2025\/12\/0AQMpgChlEPlFbNnuXtMNS_RG619SyMUOxh7G-aT9XPHtIam3DMoAvBdf5Y1wjN9vUnscguPqWyFlC0mtJlvs7BGIq82vh-Qzy9SXebveDNnq_e2bGtBHsr60gWxCbmP-1.jpeg?fit=1200%2C671&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":239335,"url":"https:\/\/climatescience.press\/?p=239335","url_meta":{"origin":325146,"position":1},"title":"As Germany\u2019s Economy Falters, Green-Socialist Government Moves To Redefine \u201cProsperity\u201d","author":"uwe.roland.gross","date":"12\/01\/2023","format":false,"excerpt":"If Germany\u2019s Federal Economics Minister Robert Habeck (Green Party) gets his way, prosperity will no longer be defined by GDP and income, but by how many wind parks are built, social inclusiveness, groundwater nitrate content and many other vague social metrics.\u00a0","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/01\/image-555.png?fit=1200%2C675&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/01\/image-555.png?fit=1200%2C675&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/01\/image-555.png?fit=1200%2C675&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/01\/image-555.png?fit=1200%2C675&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/01\/image-555.png?fit=1200%2C675&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":268136,"url":"https:\/\/climatescience.press\/?p=268136","url_meta":{"origin":325146,"position":2},"title":"British Government Funds Campaign to Rewrite Climate Science Entries on Wikipedia","author":"uwe.roland.gross","date":"18\/07\/2023","format":false,"excerpt":"A major rewriting of the science published on Wikipedia that is sceptical of the \u2018settled\u2019 climate narrative is being funded by a number of Governments from Scandinavia and the U.K. The operation is being directed by the green activist group, the Stockholm Environment Institute (SEI), under a project titled \u2018Improving\u2026","rel":"","context":"In \"Stockholm Environment Institute\"","block_context":{"text":"Stockholm Environment Institute","link":"https:\/\/climatescience.press\/?tag=stockholm-environment-institute"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/07\/image-550.png?fit=1100%2C848&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/07\/image-550.png?fit=1100%2C848&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/07\/image-550.png?fit=1100%2C848&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/07\/image-550.png?fit=1100%2C848&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2023\/07\/image-550.png?fit=1100%2C848&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":419710,"url":"https:\/\/climatescience.press\/?p=419710","url_meta":{"origin":325146,"position":3},"title":"Welcome To 2026: Europe Laying Groundwork for Climate Science Censorship!","author":"uwe.roland.gross","date":"03\/01\/2026","format":false,"excerpt":"EU overreach amid failing climate policies, accusing leaders of using censorship to silence opposition rather than address economic fallout (e.g., high energy costs, farmer protests). As of January 2026, climate disinformation is not explicitly classified as a DSA systemic risk. Enforcement focuses on illegal content, elections, and general misinformation; no\u2026","rel":"","context":"In \"authoritarian control\"","block_context":{"text":"authoritarian control","link":"https:\/\/climatescience.press\/?tag=authoritarian-control"},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2026\/01\/0AQMxNoFHNtCdqWunHZ_FYOb0lwSCV_IbhyAG2s63Q2nNP9zi_gyZji0ZzZCRRfEQz_x1uV3LlnmNLEUFF27CDBdcrGuz1xGUpVTF8xsnu1NDP5hwEnn0lLcvT7b48sI8-1.jpeg?fit=1175%2C925&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2026\/01\/0AQMxNoFHNtCdqWunHZ_FYOb0lwSCV_IbhyAG2s63Q2nNP9zi_gyZji0ZzZCRRfEQz_x1uV3LlnmNLEUFF27CDBdcrGuz1xGUpVTF8xsnu1NDP5hwEnn0lLcvT7b48sI8-1.jpeg?fit=1175%2C925&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2026\/01\/0AQMxNoFHNtCdqWunHZ_FYOb0lwSCV_IbhyAG2s63Q2nNP9zi_gyZji0ZzZCRRfEQz_x1uV3LlnmNLEUFF27CDBdcrGuz1xGUpVTF8xsnu1NDP5hwEnn0lLcvT7b48sI8-1.jpeg?fit=1175%2C925&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2026\/01\/0AQMxNoFHNtCdqWunHZ_FYOb0lwSCV_IbhyAG2s63Q2nNP9zi_gyZji0ZzZCRRfEQz_x1uV3LlnmNLEUFF27CDBdcrGuz1xGUpVTF8xsnu1NDP5hwEnn0lLcvT7b48sI8-1.jpeg?fit=1175%2C925&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2026\/01\/0AQMxNoFHNtCdqWunHZ_FYOb0lwSCV_IbhyAG2s63Q2nNP9zi_gyZji0ZzZCRRfEQz_x1uV3LlnmNLEUFF27CDBdcrGuz1xGUpVTF8xsnu1NDP5hwEnn0lLcvT7b48sI8-1.jpeg?fit=1175%2C925&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":232274,"url":"https:\/\/climatescience.press\/?p=232274","url_meta":{"origin":325146,"position":4},"title":"World Economic Forum Climate Misinformers","author":"uwe.roland.gross","date":"03\/12\/2022","format":false,"excerpt":"The World Economic Forum\u2019s (WEF) managing director, Adrian Monck, was recently\u00a0interviewed by CBC\u00a0and claimed that Canadians expressing concerns about WEF influence on Canada were engaging in \u2018conspiracy theories\u2019.","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/12\/0Screenshot-2022-12-03-180051.png?fit=1200%2C672&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/12\/0Screenshot-2022-12-03-180051.png?fit=1200%2C672&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/12\/0Screenshot-2022-12-03-180051.png?fit=1200%2C672&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/12\/0Screenshot-2022-12-03-180051.png?fit=1200%2C672&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/12\/0Screenshot-2022-12-03-180051.png?fit=1200%2C672&ssl=1&resize=1050%2C600 3x"},"classes":[]},{"id":249801,"url":"https:\/\/climatescience.press\/?p=249801","url_meta":{"origin":325146,"position":5},"title":"Scientists Shifting Global Warming Goalposts to 1.8-1.9C?","author":"uwe.roland.gross","date":"26\/03\/2023","format":false,"excerpt":"\u201c\u2026 economic modelling has often suggested that temperature increases well above \u2026 the 2 \u00b0C target \u2026 would result in higher total welfare \u2026\u201d","rel":"","context":"Similar post","block_context":{"text":"Similar post","link":""},"img":{"alt_text":"","src":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/07\/00IMAGE-numerical-weather-modeling-050216-1120x534-landscape.jpg?fit=1200%2C675&ssl=1&resize=350%2C200","width":350,"height":200,"srcset":"https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/07\/00IMAGE-numerical-weather-modeling-050216-1120x534-landscape.jpg?fit=1200%2C675&ssl=1&resize=350%2C200 1x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/07\/00IMAGE-numerical-weather-modeling-050216-1120x534-landscape.jpg?fit=1200%2C675&ssl=1&resize=525%2C300 1.5x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/07\/00IMAGE-numerical-weather-modeling-050216-1120x534-landscape.jpg?fit=1200%2C675&ssl=1&resize=700%2C400 2x, https:\/\/i0.wp.com\/climatescience.press\/wp-content\/uploads\/2022\/07\/00IMAGE-numerical-weather-modeling-050216-1120x534-landscape.jpg?fit=1200%2C675&ssl=1&resize=1050%2C600 3x"},"classes":[]}],"_links":{"self":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts\/325146","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/users\/121246920"}],"replies":[{"embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=325146"}],"version-history":[{"count":3,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts\/325146\/revisions"}],"predecessor-version":[{"id":325150,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/posts\/325146\/revisions\/325150"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=\/wp\/v2\/media\/325148"}],"wp:attachment":[{"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=325146"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=325146"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/climatescience.press\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=325146"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}