I'm back! Before I get settled back in I'd just like draw attention to an interesting journal article by Paul H. Rubin on Folk Economics, where he demonstrates that people aren't "programmed" to understand economics; instead, it's something that must be learned. This is in line with other studies I've read on gender differences in economics (which states that men have a better, on average, understanding of economics because they associate with people who have studied it within their social networks - in other words, they tend to be more exposed to it) and so on. All seem to conclude that it's exposure rather than "natural ability"; it's reading and study that dictate how proficient one is at economics (of course there are exceptions!). As I've mentioned earlier, getting people to take the "second step" in logic - to see beyond the immediate consequences of an action - can be quite the task!

Anyway, here's the abstract:

Folk economics is the intuitive economics of untrained persons. It is concerned with distribution, and does not allow for or understand incentives. Folk economic notions evolved in our ancestors in circumstances where there was little in the way of specialization, division of labor, capital investment, or economic growth. It can explain the beliefs of naive individuals regarding matters such as international trade, labor economics, law and economics, and industrial organization. It is important that voters understand economic principles. Economists would do a better job of persuading others and of teaching if we paid explicit attention to folk economics. Because untrained individuals do not fully understand gains from trade, training in economics is likely to improve welfare by increasing the number of trading opportunities. There is evidence that this is in fact true.

Go and have a read - it's only twenty odd pages. I'll get back to criticising the latest government "initiatives" in the next few days, not like it's difficult!