Folk Economics

Folk Economics

The question has been posed to the relevance of the article on folk economics to future government policy makers and healthcare leaders. Specifically, with respect to how folk economics relates to the policies constituents demand and politicians like to create.

In a general sense the author understand folk economics to be defined as form of popular economics, where lay people blend their own personal bias’ with their view of how the economy does or should work.

The article takes it a step further and says that folk economics considers our economic thinking and instincts to have evolved in a zero-sum, non-division of labor world. Mr. Rubin posits that those evolved instincts (and some cultural elements as well) are counterproductive in our new non-zero-sum, highly specialized division of labor world. Our evolution in this zero-sum world leads to a mistrust of capitalism in general and politicians or policy makers because of their influence on the policies and laws that govern our markets. (Rubin, 2003)

The use of folk economics by those in government and healthcare leadership can help the policy makers:

Understand the opinions of untrained individuals regarding matters such as international trade, labor economics, law and economics, and industrial organization. It is important to overcome the errors of folk economics because voters who believe these errors will favor counterproductive policies. (Rubin, 2003)

Throughout the article Mr. Rubin presents evidence to show that the average persons mind has evolved in such a way that does not allow for them to easily understand economic and political criteria such as market forces, social values and trade union pressure that influence market theory. (Rubin, 2003)

The author is of the opinion that the power of folk economics is extremely important to understand when in a position to implement policy, especially with the potential for it to be long standing and harmful to the economy. An...