For more than 50 years the National Council on Economic Education has
worked to bring economic education into K-12 classrooms, mostly by providing
training and materials to teachers. That mission, always a challenge,
may face its biggest test as schools—with pressure from state and
federal agencies—move increasingly to standardized curricula. Will
a new federal law ensure that economics gets taught in the nation's schools?
Or will economics courses be marginalized by the growing emphasis on core
skills, like reading, math and science? Or will such courses like math
and science save the day for economics, allowing economic principles to
be taught alongside those disciplines?
These and other questions were asked this spring at a gathering in Washington,
D.C., of nearly 200 educators, policymakers, politicians and others interested
in economic education. The purpose of this National Summit on Economic
and Financial Literacy, jointly sponsored by the NCEE and the Federal
Reserve Bank of Minneapolis, was to investigate "What Works"
in economic education and, perhaps more importantly, "What Needs
to be Done." In the latter regard, holding the conference in Washington,
D.C., was an obvious choice.
"This is truly an opportune moment," said Robert F. Duvall,
NCEE president, in his opening remarks, in which he addressed the 2002
enactment of the No Child Left Behind Act. The Act includes funding for
Excellence in Economic Education, a new program to promote economic and
financial literacy among K-12 students through teacher training, research,
assessment and dissemination of best practices. "I believe that we
are here in this place, at this time, with the opportunity to make a difference
in the education agenda in this country," Duvall said.
Just how to go about making that difference was a matter of some deliberation.
The No Child Left Behind Act, as suggested above, is largely focused on
such core skills as reading, writing and math, with economics relegated
to a subset of disciplines and activities. That means the economic education
establishment still has a lot of convincing to do when it comes to influencing
school districts, and it means that economic educators and their supporters
must decide how best to accomplish their goals—whether at the federal,
state or local level.
The following excerpts highlight the Summit's two keynote speakers, as
well as comments from some of the panel debates; for more information
on this event and other matters pertaining to economic education, please
visit the NCEE's Web site, or the Minneapolis
Fed's economic education site.
Federal Reserve Board Vice Chairman Roger Ferguson led off
the Summit, and following are some of his thoughts about economic education
"I know that I could speak for much longer than you care to listen
about why the understanding of economics and finance is crucial for individuals
in a market economy. Knowledgeable and astute consumers promote competition
among providers, which benefits us all. Personal financial security enhances
individual well-being. Increasing national savings allows us to invest
more productively for tomorrow. And, at a more fundamental level, our
social fabric and national image are intimately connected to our material
aspirations. The United States cannot be the land of opportunity unless
all of our citizens have both the tools and the ability to use them to
improve their lives and livelihoods.
"As you may know, I have been trained both as a lawyer and an economist.
I think the point can fairly be made that the most critical underpinnings
of our society are the Constitution and our market structures. From my
perspective, however, the education that we provide our citizens about
the rule of law differs dramatically from what we provide about the functioning
of markets. By the time I graduated from junior high school I had read
the Constitution; not until much later did I study how prices are set
in a market economy. This imbalance can and will be addressed by your
work and that of many others. Fortunately, as my Federal Reserve Board
colleague Ned Gramlich pointed out recently, changes in our financial
system—including the increasing complexity and diversity of product
offerings—have created consumer demand for improved education."
The second keynote speaker, Anne O. Krueger, first deputy managing
director of the International Monetary Fund, shared her thoughts on the
need for a better understanding of economics, so that people could make
more informed judgments about such important policy issues as globalization
and international economic development.
"... What I want to do is turn to the viewpoints of the IMF and
talk a bit about the importance of economic education to us, and of course
there are several dimensions to this.
"First is the surge of popular demonstrations against so-called globalization,
which, in a sense, can be interpreted as really against capitalism. ...
Many of the young people—and I think they are mostly young, although
I saw some demonstrators out here about a month ago and I wasn't entirely
persuaded—most of the young people involved take part, I think, because
they really have the best of humanitarian motives and I think they really
do mean very well. But very often, at least according to my understanding
and I think the understanding of most economists, what they are advocating
is almost exactly the opposite of what they think they are trying to achieve.
What they are saying they want to do and what effect it will have is exactly
opposite. ... But sometimes it's self-interest and OK; but when, in fact,
well-meaning people are advocating things that will achieve the opposite
of what they intend, I get a little bit more concerned.
"... [W]e hear critics who are arguing that the pursuit of economic
growth through global integration leads to a 'race to the bottom' in labor
and environmental standards. There is precious little evidence that low
standards deliver competitive advantage, and lots of evidence that [as]
economic growth comes about, labor and environmental conditions improve
because people are richer and they want that set of conditions. People
do not have bad environments because they think they are wonderful, people
have bad environments because they figure they better get a least one
bowl of rice in their stomachs per day, because if they don't do that
there is no point because they won't be breathing that air anyway.
"As incomes rise and per capita income keeps going up ... the evidence
is very, very strong that people start beginning to clean up their own
environment. And yet we hear all about environmental standards that we
want to impose on others because we are well meaning and we think it is
good. And yet, if we want a good environment, what we want to do is accelerate
economic growth to get them there faster-and yet it's counterintuitive.
This is part of what economic education needs to do.
"... [T]hese are just examples and I think I could go on all day
[discussing] policy choices for which greater economic literacy would
permit a more beneficial and a more productive debate, out of which would
come an economically more viable, more productive society. There is a
great deal to be said for it. Unfortunately, we live in a world in which
the term 'textbook solution' has become almost a pejorative term. Textbooks
don't provide the answer to every policy dilemma, but if you ignore some
of the basic principles of economics they will come and bite you, very
often, in much higher-cost ways that you were trying to avoid in the first
place. So, I hope very much that all of you are very, very successful
in your endeavors. I think it is an important cause and one that is underappreciated,
on the part of almost everybody.
The first panel of the Summit delineated the current issues surrounding
economic education, as well as those looming in the near future.
Time for a concerted effort on a national scale
"There are many organizations working on economic education,
from many different perspectives. The National Council, Junior Achievement,
the Foundation for Teaching Economics, The Jump Start Coalition, the Federal
Reserve System and many others really too numerous to mention in the short
time that we have here. These organizations need to work more closely
together to make a convincing case for economic education. An education
that would include a series of courses covering personal finance, business,
career education, public policy and basic economics. I think we need to
form a national commission that would put this curriculum together and
also be responsible for evaluating how well states and school districts
do in terms of meeting and providing this economics curriculum for their
students. ... I think that is really one of the basic purposes of this
summit and I hope its going to be one of the outcomes-that we will have
a more cooperative venture that will make a more effective case for economic
William Walstad, Director
National Center for Research in Economic Education
Integrating economics into other subjects
"Attention has been given and dollars have been allocated so we can
bring economics off the back burner and into the mainstream of social
studies education and the school curriculum. But this success does not
come without challenges, which I think can be viewed as opportunities.
To meet these challenges, or to take advantage of these opportunities,
we need to develop new materials that meaningfully use economics and personal
finance to teach reading and math, and that can be integrated into other
content areas. We need to design new testing instruments, we need to develop
partnerships with school districts and I think we need to rethink the
way we design and deliver professional development for teachers."
Bonnie Meszaros, Associate Director
Center for Economic Education and Entrepreneurship
University of Delaware
Teaching economics the right way
"Unfortunately, often what we call economic literacy is a very
fact-based approach: What does GDP stand for? Does the Federal Reserve
deal with monetary policy or fiscal policy? Answering those questions
correctly is the definition of an economically literate person. I don't
believe that creates—it does create informed citizens—it does
not create thoughtful citizens. And good economic education should be
about creating informed and thoughtful citizens. Unfortunately that is
extremely difficult, and I'm much more pessimistic than some of the other
panelists, and some of the other speakers you have heard today and probably
some of the speakers you are going to hear later on. I think the natural
tendency is to create curricula and programs that can be drilled, taught
via memorization, taught via reading, taught via repetition and then tested
via multiple test questions. ... Most of what we teach at the college
level is a dumbed-down version of what we teach graduate students, which
is a waste of time for students who will never go on to become professional
economists. What we should be teaching at the college level is what an
educated person should know about economics, and that is not what we teach
in most of our principles of economics classes."
Russell Roberts, Professor
Washington University, St. Louis
You still need the teaching tools
"The first point has already been made by Russ, which is the priority
of teaching the economic method, the economic way of thinking ... [but]
where I would differ is perhaps that the tools of economics are essential,
almost as essential. I suppose if you have a really brilliant kid who
could learn the way of economic thinking without a supply and demand curve,
that would be fine, but I think for most mortals you need that. Then,
once you have learned the economic method-the economic of way of thinking,
economic logic-you can apply it to many of the other areas of great concern
here in the public policy arena."
Robert Costrell, Director
Research and Development
Massachusetts Executive Office
of Administration and Finance
The final panel of the day discussed the need for setting a concerted
economic education agenda.
An international agenda
"We talk about planning a national agenda for economics education.
I tend to think we may not be thinking big enough by thinking national.
I think we are going to have to increasingly think global. ... As someone
who now teaches a number of international students, I have become acutely
aware of the fact that the U.S. economic system isn't easily transferable
to other countries. If you are just thinking about monetary policy, the
major thing the Fed does is move short-term interest rates. If you don't
have capital markets in your country you're not going to be able operate
monetary policy by just changing short-term interest rates. You have got
to have the full spectrum of maturities, you have got to have trading
so that actual changes in interest rates can be reflected. I think that
recognizing that the U.S. system is not always immediately transferable
will help to heighten our sensitivity to some of these questions."
Susan Phillips, Dean
School of Business and Public Management
George Washington University
New teaching aids will make a difference
"I don't think there has ever been a more important time to focus
on economic education, but I suspect that statement has been made at all
meetings on economic education and it is always going to be true. The
economy is going to continue to get more complex, we are going to have
new products, new transactions. It's going to get more global, and it's
always going to be the most challenging time to tackle economic education.
But the good news is the tools of economic education—all education,
but particularly economic education—are evolving so rapidly. It is
easier to reach a lot of people and we have a lot of teaching aids and
computers and interactive programs and games that make learning fun. Other
tools are just beginning to show what enormous potential they have. I
think the days of moaning [about] the lack of economic literacy are really
behind us. This meeting is about what works, and there is a lot to say
and that is very encouraging."
Alice Rivlin, Fellow
Time to get obnoxious
"It is very difficult for educators to make their case that economics
should not go away while we teach our kids to read. Educators, principals
and district superintendents and charter school operators have to make
a decision about where they are going to put scarce resources. ... I need
for you to be obnoxious. I need for you to say it is not OK to put aside
economics. ... We really need to be making our case as professionals that
economics, as a course, absolutely has to stay, that it does relate to
so many things that are going to be important for these students. That,
in fact, if we take economics a lot more seriously we probably could improve
our other studies, like mathematics, the broader spectrum of social studies,
history, and so on."
Lisa Graham Keegan, CEO
Education Leaders Council
Whose standards are important?
"It is extremely important to recognize the changes that have just
been put into place, bringing increased focus on reading, writing and
mathematics and science. ... The business community across this country
has raised those issues, has said: We are short of mathematicians coming
through our system at all levels, in higher education and into the workplace
of science; we have problems with writing and reading and other issues.
So the demand on those subjects in our education systems from here on
out is going to go up. At the same time, there are growing voices saying
we have to have standards and assessments for technology, so our students
understand technology. We have a growing voice advocating for students
to understand the global community, and there are standards and tests
being talked about. And in economics we have just heard, and you have
heard all day, how critical it is. Now, folks, all that ain't gonna get
done—you can't come into a public school system in this country and
dump all this on it and walk out the door and say: This is what students
should know and what they should be able to do. That simply isn't enough
and it isn't respectful of the system and the job that it has to do. ...
We must get our hands dirty and work with the state people that are putting
the curriculums in place."
Roberts T. Jones, President and CEO
National Alliance of Business
In addition to numerous other presentations, including those concerning
national economic assessments, and presentations by award-winning teachers,
the Summit participants heard from two members of Congress.
Working at the federal level
"I guess I would say on behalf of Congress that we've been a little
slow on the uptake here. What you have been doing for years, we are just
starting to appreciate. And let's make certain we work together to leverage
what we can contribute at the federal level ... with what you are doing
in terms of leadership on the ground, and hopefully we'll be able to make
some headway in this situation."
Rep. Earl Pomeroy, North Dakota
Member, House Ways and Means Committee
"I think we need to redouble our efforts. I don't know
whether this Treasury [Department] can serve the purpose, but I am interested
in sort of getting feedback from you as we move ahead as to whether [Treasury]
can be an appropriate coordinating point for all of the efforts that are
being made. We need to really bring together knowledge about the initiatives
and disseminate that to get the best practices working, and then figure
out how you get a system working in each state, maybe through the state
councils."The Economic Literacy Project
Sen. Paul S. Sarbanes, Maryland
Chairman, Committee on Banking,
Housing and Urban Affairs