Economic history (and teaching) links
Estimating the demographic cost of socialist policies in India:
These policies yielded economic growth of 3.5 percent per year, which was half that of export-oriented Asian countries, and yielded slow progress in social indicators, too. Growth per capita in India was even slower, at 1.49 percent per year. It accelerated after reforms started tentatively in 1981, and shot up to 6.78 percent per year after reforms deepened in the current decade. … with earlier reform, 14.5 million more children would have survived, 261 million more Indians would have become literate, and 109 million more people would have risen above the poverty line. The delay in economic reform represents an enormous social tragedy. It drives home the point that India’s socialist era, which claimed it would deliver growth with social justice, delivered neither. …
For the first three decades after India embarked on socialist planning in 1950, such policies yielded annual GNP growth of 3.5 percent and per capita growth of 1.49 percent. In the 1960s and 1970s, the four East Asian tigers (Korea, Taiwan, Singapore, and Hong Kong) achieved 7-8 percent annual GNP growth. Later, the mini-tigers of the Association of Southeast Asian Nations (Thailand, Malaysia, and Indonesia) also achieved 7-8 percent growth. So India’s socialism made it an economic laggard in Asia. India’s share of global exports fell from 2.2 percent at its independence in 1947 to 0.45 percent by 1985, but socialists viewed this as a success of self-sufficiency rather than a disastrous loss of the gains of trade. …
The fall of the Soviet Union that same year helped convince Indian politicians that more socialism could not be the way out of India’s crisis, and Deng Xiaoping’s successful market-oriented reforms in China showed that economic liberalization could yield major dividends. The Indian reform process was gradual and fitful, but its cumulative impact enabled India to become a miracle economy in 2003-2008, averaging almost 9 percent annual GNP growth, and more than 7 percent annual GNP growth per capita. This improved both incomes and social indicators. …
India’s infant mortality rate (IMR) dropped from 132 per thousand births in 1971 to 53 per thousand in 2008. Over this 37-year period, the elasticity of IMR reduction with respect to the growth of per capita GNP was -0.82. That is, for every 1 percent increase in GNP per capita, IMR declined 0.82 percent. …
The elasticity of literacy improvement with respect to per capita GNP growth from 1971 to 2008 was 0.56. That is, for every 1 percent increase in GNP per capita, literacy improved by 0.56 percent.
… the elasticity of the poverty head-count ratio with respect to per capita GNP growth was -0.68. That is, for every 1 percent growth of GNP per capita, poverty declined by 0.68 percent.
… My projected trends of both per capita GNP growth and IMR reduction in India are far lower than what South Korea actually achieved. So, the figure for “missing children” appears conservative. ..
I make no claims to great precision, but I do claim plausibility. Economists are familiar with the enormous power of compound interest, so they should not be surprised that faster GNP growth over 35 years would have yielded far better social outcomes than actually experienced.
… And yet these well-intentioned policies unwittingly killed millions of children. Verily, the way to hell is paved with good intentions.
About the economics of piracy:
Rosenberg and Birdzell (1986:92), for example, argue that “…policing the oceans proved largely impracticable until the nineteenth century, when rival maritime powers shifted their attention from fighting each other to the suppression of piracy and the slave trade. Until then, merchant ships had to be armed for their own security, and the fact that privately owned vessels were regularly armed made for a considerable degree of insecurity for other vessels.”
… In the language of club theory, a Letter of Marque and Reprisal meant that if a member of your club predates on a member of my club, I can seek vengeance against a member of your club.
… The state had ideological legitimacy while pirates did not. North defines a state as “an organization with a comparative advantage in violence, extending over a geographic area whose boundaries are determined by its power to tax constituents” (North 1981:21).
… Leeson further shows how pirates were responsive to market incentives and shows how they were pioneers of tolerance out of pure self-interest that helped them overcome their prejudices (pp. 156-57, 159, 164). The costs and benefits of enslaving people were such that it was unprofitable (pp. 166-67); further, conscription of captured sailors would undermine the crew’s unanimity and the legitimacy of the ship’s institutions.
… Piracy met its demise and acquired its romantic historical image during a period when a coalition of religious, political, and cultural leaders helped to fashion an image of the pirate as a bloodthirsty rogue rather than as a legitimate competitor in the market for violence (Rediker 2004:127). Puritan leader Cotton Mather, for example, urged the eradication of piracy and of pirates, whom he called the “common enemies of mankind” (Rediker 2004:127).
Examining the European trade boom 1500-1800 (pdf):
Section III asks whether the trade boom can be explained by declining trade barriers. If there was such a decline, then it should have left a trail marked by falling commodity price gaps between exporting and importing trading partners. There is no such evidence, suggesting that “discovery” and transport productivity improvements were offset by trading monopoly markups, tariffs, non-tariff restrictions, wars, and pirates, all of which served in combination to choke off trade. The trade boom would have been a lot bigger, it seems, without those man-made interventions.
… the growth of world trade was pretty much the same in the 19th and 20th centuries, roughly 3.5 percent per annum. This is a surprising fact, given that world GDP growth doubled from 1.5 to 3 percent per annum between 1820-1913 and 1913-1992 … Since the growth of world trade was almost identical in the two centuries, it follows that trade shares rose much faster in the 19th than the 20th century. So far, it looks like the 19th century is the canonical globalization epoch, not the 20th century … trade growth prior to 1800 was much slower, about 1.1 percent per annum.
… Indeed, long distance trade in the pre-18th century period was strictly limited to what might be called noncompeting goods: Europe imported spices, silk, sugar and gold, which were not found there at all, or were in very scarce supply; Asia imported silver, linens and woolens, which were not found there at all (with the important exception of Japanese silver before 1668).
… the price spread on pepper, cloves, coffee, tea and other non-competing goods was
not driven solely, or even mainly, by the costs of shipping, but rather, and most importantly, by monopoly, international conflict, and government tariff and non-tariff restrictions. But we are indifferent about the sources of commodity price convergence: anything that impedes price convergence suppresses trade, and there is no evidence of secular commodity price convergence before the 1820s. … suggests that pretty much all of the intercontinental trade at this time was by state-chartered monopolies. Like most monopolies, they raised prices paid by consumers (in Europe), lowered prices paid by suppliers (in Asia), restricted output and limited trade. This is hardly the stuff that globalization is made of!
… There is plenty of evidence of an inter-continental trade boom during the Age of Commerce, but there is very little evidence of commodity price convergence between the continents.
… Obviously, we take globalization to mean the integration of commodity markets between continents. The Voyages of Discovery also involved a transfer of technology, plants, animals and diseases on an enormous scale, never seen before or since; but this is not the focus of the present paper. Furthermore, the economic potential of the Voyages of Discovery could never have been fully realized without the peopling of these frontiers and the investment of European capital in them; thus, it also involved factor markets. More to the point of this paper, the inter-continental trade boom that followed the voyages of Columbus and da Gama must have had its source in some combination of three factors: a boom in European demand for tradables (the continent that was pulling away economically from the Rest), a boom in tradable supply from the Rest, and a decline in the barriers to trade. If a decline in trade barriers had accounted for the trade boom over the three centuries following 1492, then globalization would have been the driving force, as implied by the world history rhetoric.
… the relative price fell across the first half of the 19th century, and at the most dramatic per annum rate seen across the whole half millennium before 1850. To repeat our comment above, we view this evidence as consistent with powerful globalization forces at work after the French Wars.
… However, it was Asian goods whose relative price fell in European markets over the three centuries, not the relative price of goods from the Americas.
… they suggest the following: European surplus income fell in the 16th century, so it could not have contributed anything to the trade boom; surplus income grew fairly vigorously in the 17th and 18th centuries, when its contribution to the trade boom must have been much more important; and surplus income boomed in the 19th century, when it must have contributed very importantly to the trade boom.
… The four estimates produce remarkably similar results. European income growth explained none of the 16th century trade boom: income actually fell during this period, as did the domestic relative price of these imported goods. The 16th century trade boom can therefore be explained either by rising Asian supply, falling Asian demand, or by some combination of the two. … In contrast, the more modest 17th century trade boom can be explained entirely by European income growth, as evidenced by the rising relative prices of non-competing imports during the period. The 18th century trade boom must be explained by a mixture of demand and supply: between 59 and 75 percent of the trade boom can be explained by European income growth; it follows that between 25 and 41 percent of the trade boom can be explained by changing Asian supply. Over the three centuries as a whole, European income growth explained between 50 and 65 percent of the inter-continental trade boom.
… Thus, by the time of the European Voyages of Discovery, the official imperial policy of shutting China’s doors to external trade was already in place.
Three hundred and fifty or four hundred years is a long time to leave world trade in the hands of others. Is it possible that China’s de-globalization move “crowded in” European trade with the rest of Asia?
… These relative price facts and the sources-of-trade-boom accounting for 1500-1800 are also consistent with the view that China crowded in European trade with the rest of Asia over the three centuries following da Gama. Of course, these relative price and trade boom accounting facts are not proof of the Chinese-retreat-crowded-in-Europe speculation, but they are certainly consistent with it.
.. In the 16th and 17th centuries, total factor productivity growth was very slow in European agriculture (even in English agriculture …), so land rents must have been driven primarily by land/labor ratios - periods of rising population pressure on the land being periods of rapid increase in the ratio of land rents to the wages of landless laborers, as well as, more importantly, periods of rising land rents by themselves. … how tight the English correlation was between the wage rental ratio and the land-labor ratio … pressure on the land between 1600 and 1850 not only lowered the wage/rental ratio but also raised deflated land rents. Thus, European population pressure on the land must have contributed mightily to the trade boom after 1600, and the mechanism was from decreasing land-labor ratio, to increasing land rents, to increasing economic surplus, and to demand for “exotic”
imports from Asia and the Americas. …
Three conclusions are inescapable: a quantitative study of the international economy after the Voyages of Discovery does not support the use of world history globalization rhetoric for the three centuries before Waterloo; it does support the view that European import demand was an important part of the trade boom following Columbus and da Gama; and it also suggests that the history of Europe’s Age of Commerce cannot be written without China.
Ireland’s ludicrous land boom as driven by restricted supply and obsessive demand:
If the control of land is left out of the equation, the sheer scale of the Irish property bubble is impossible to fathom. … new house prices increased over four times faster than house-building costs, five times average industrial earnings and more than seven times faster than the consumer price index. … Before the boom, land made up about 10 to 15 per cent of the cost of a house. At the height of the boom, it made up a breathtaking 40 to 50 per cent. … “certain landowners had accumulated large landbanks at the outskirts of urban areas which they then released in dribs and drabs in order to manipulate the market and artificially to maintain high land prices”. Essentially, a small number of very wealthy land speculators were able to shape the market in such a way as to ensure that the cost of buying the land it stood on made up a larger and larger proportion of the cost of a house. … By 2007, Irish farm land values were the highest in Europe, at €66,000 per hectare - an incredible price in a country with plenty of arable land and a relatively sparse population. It was 10 times the value of similar land in Scotland and six times more than the same fields would be worth in England. In May 2008, €13.5 million was paid for a 450-acre farm in Warrenstown, Co Meath - one of the highest prices ever paid for agricultural land anywhere in the world. … In 2007, almost half of all British farm land sold to foreign buyers was bought by Irish purchasers. In a 21st-century, high-tech, globalised economy, the historic thrill of buying up England was more potent than any satisfaction to be gained from creating real and sustainable wealth.
The land planning laws do not get mentioned, but zoning makes it easier to manipulate prices by controlling supply. In Oz the “certain landowners” with “large landbanks at the outskirts of urban areas which they then released in dribs and drabs in order to manipulate the market and artificially to maintain high land prices” are called ‘State governments’.
About narrative learning and teaching economics and teaching economics using practical examples:
The narrative theory of learning now tells us that information gets into the brain a lot more easily in some forms than others. You can get information into the student’s brain in the form of equations and graphs, yes, but it’s a lot of work to do that. If you can wrap the same ideas around stories, around narratives, they seem to slide into the brain without any effort at all. After all, we evolved as storytellers; that’s what we’re good at. That’s how we always exchanged ideas and information. And if a narrative has an actor, a plot, if it makes sense, then the brain stores it quite easily; you can pull it up for further processing without any effort; you can repeat the story to others. Those seem to be the steps that really make for active learning in the brain. …
So you can say the students who’d never had any familiarity with the term "opportunity cost" more or less guessed and got about what you’d expect. The ones who thought they knew something about it knew just enough to steer themselves in the wrong direction.
… So I started assigning a term paper in my upper-level course, which I hadn’t done for the reason of being pressed for time to do other things, and I noticed that the students got way more engaged in the course as a result of that paper. And I started cutting it back from 20 pages to 10 pages when I lost the T.A. (the grant ran out). And then from 10 to 5 -- each time I cut it back in length, the papers seemed to get better. Right now the length of the paper is maximum 500 words. I can spot 500 words no matter what size font they use, so I tell them I won’t read past 500 words, but I stress that the best papers are often only one, two paragraphs. The Braille dots example you can do in 80 words without any trouble at all. …
The idea of taking a few core things, working on them until you get them, and then moving on and adding complexity only when the root stuff is firmly embedded, that just seemed like such an eye-opener to me. It really really worked. And why not in economics? So I’ve been trying it there, and I’m convinced that it works there as well as in language.
The "Braille dots" example referred to was the question: why do the keyboards of drive-by ATMs have Braille on them? (Answer in the link.)
These policies yielded economic growth of 3.5 percent per year, which was half that of export-oriented Asian countries, and yielded slow progress in social indicators, too. Growth per capita in India was even slower, at 1.49 percent per year. It accelerated after reforms started tentatively in 1981, and shot up to 6.78 percent per year after reforms deepened in the current decade. … with earlier reform, 14.5 million more children would have survived, 261 million more Indians would have become literate, and 109 million more people would have risen above the poverty line. The delay in economic reform represents an enormous social tragedy. It drives home the point that India’s socialist era, which claimed it would deliver growth with social justice, delivered neither. …
For the first three decades after India embarked on socialist planning in 1950, such policies yielded annual GNP growth of 3.5 percent and per capita growth of 1.49 percent. In the 1960s and 1970s, the four East Asian tigers (Korea, Taiwan, Singapore, and Hong Kong) achieved 7-8 percent annual GNP growth. Later, the mini-tigers of the Association of Southeast Asian Nations (Thailand, Malaysia, and Indonesia) also achieved 7-8 percent growth. So India’s socialism made it an economic laggard in Asia. India’s share of global exports fell from 2.2 percent at its independence in 1947 to 0.45 percent by 1985, but socialists viewed this as a success of self-sufficiency rather than a disastrous loss of the gains of trade. …
The fall of the Soviet Union that same year helped convince Indian politicians that more socialism could not be the way out of India’s crisis, and Deng Xiaoping’s successful market-oriented reforms in China showed that economic liberalization could yield major dividends. The Indian reform process was gradual and fitful, but its cumulative impact enabled India to become a miracle economy in 2003-2008, averaging almost 9 percent annual GNP growth, and more than 7 percent annual GNP growth per capita. This improved both incomes and social indicators. …
India’s infant mortality rate (IMR) dropped from 132 per thousand births in 1971 to 53 per thousand in 2008. Over this 37-year period, the elasticity of IMR reduction with respect to the growth of per capita GNP was -0.82. That is, for every 1 percent increase in GNP per capita, IMR declined 0.82 percent. …
The elasticity of literacy improvement with respect to per capita GNP growth from 1971 to 2008 was 0.56. That is, for every 1 percent increase in GNP per capita, literacy improved by 0.56 percent.
… the elasticity of the poverty head-count ratio with respect to per capita GNP growth was -0.68. That is, for every 1 percent growth of GNP per capita, poverty declined by 0.68 percent.
… My projected trends of both per capita GNP growth and IMR reduction in India are far lower than what South Korea actually achieved. So, the figure for “missing children” appears conservative. ..
I make no claims to great precision, but I do claim plausibility. Economists are familiar with the enormous power of compound interest, so they should not be surprised that faster GNP growth over 35 years would have yielded far better social outcomes than actually experienced.
… And yet these well-intentioned policies unwittingly killed millions of children. Verily, the way to hell is paved with good intentions.
About the economics of piracy:
Rosenberg and Birdzell (1986:92), for example, argue that “…policing the oceans proved largely impracticable until the nineteenth century, when rival maritime powers shifted their attention from fighting each other to the suppression of piracy and the slave trade. Until then, merchant ships had to be armed for their own security, and the fact that privately owned vessels were regularly armed made for a considerable degree of insecurity for other vessels.”
… In the language of club theory, a Letter of Marque and Reprisal meant that if a member of your club predates on a member of my club, I can seek vengeance against a member of your club.
… The state had ideological legitimacy while pirates did not. North defines a state as “an organization with a comparative advantage in violence, extending over a geographic area whose boundaries are determined by its power to tax constituents” (North 1981:21).
… Leeson further shows how pirates were responsive to market incentives and shows how they were pioneers of tolerance out of pure self-interest that helped them overcome their prejudices (pp. 156-57, 159, 164). The costs and benefits of enslaving people were such that it was unprofitable (pp. 166-67); further, conscription of captured sailors would undermine the crew’s unanimity and the legitimacy of the ship’s institutions.
… Piracy met its demise and acquired its romantic historical image during a period when a coalition of religious, political, and cultural leaders helped to fashion an image of the pirate as a bloodthirsty rogue rather than as a legitimate competitor in the market for violence (Rediker 2004:127). Puritan leader Cotton Mather, for example, urged the eradication of piracy and of pirates, whom he called the “common enemies of mankind” (Rediker 2004:127).
Examining the European trade boom 1500-1800 (pdf):
Section III asks whether the trade boom can be explained by declining trade barriers. If there was such a decline, then it should have left a trail marked by falling commodity price gaps between exporting and importing trading partners. There is no such evidence, suggesting that “discovery” and transport productivity improvements were offset by trading monopoly markups, tariffs, non-tariff restrictions, wars, and pirates, all of which served in combination to choke off trade. The trade boom would have been a lot bigger, it seems, without those man-made interventions.
… the growth of world trade was pretty much the same in the 19th and 20th centuries, roughly 3.5 percent per annum. This is a surprising fact, given that world GDP growth doubled from 1.5 to 3 percent per annum between 1820-1913 and 1913-1992 … Since the growth of world trade was almost identical in the two centuries, it follows that trade shares rose much faster in the 19th than the 20th century. So far, it looks like the 19th century is the canonical globalization epoch, not the 20th century … trade growth prior to 1800 was much slower, about 1.1 percent per annum.
… Indeed, long distance trade in the pre-18th century period was strictly limited to what might be called noncompeting goods: Europe imported spices, silk, sugar and gold, which were not found there at all, or were in very scarce supply; Asia imported silver, linens and woolens, which were not found there at all (with the important exception of Japanese silver before 1668).
… the price spread on pepper, cloves, coffee, tea and other non-competing goods was
not driven solely, or even mainly, by the costs of shipping, but rather, and most importantly, by monopoly, international conflict, and government tariff and non-tariff restrictions. But we are indifferent about the sources of commodity price convergence: anything that impedes price convergence suppresses trade, and there is no evidence of secular commodity price convergence before the 1820s. … suggests that pretty much all of the intercontinental trade at this time was by state-chartered monopolies. Like most monopolies, they raised prices paid by consumers (in Europe), lowered prices paid by suppliers (in Asia), restricted output and limited trade. This is hardly the stuff that globalization is made of!
… There is plenty of evidence of an inter-continental trade boom during the Age of Commerce, but there is very little evidence of commodity price convergence between the continents.
… Obviously, we take globalization to mean the integration of commodity markets between continents. The Voyages of Discovery also involved a transfer of technology, plants, animals and diseases on an enormous scale, never seen before or since; but this is not the focus of the present paper. Furthermore, the economic potential of the Voyages of Discovery could never have been fully realized without the peopling of these frontiers and the investment of European capital in them; thus, it also involved factor markets. More to the point of this paper, the inter-continental trade boom that followed the voyages of Columbus and da Gama must have had its source in some combination of three factors: a boom in European demand for tradables (the continent that was pulling away economically from the Rest), a boom in tradable supply from the Rest, and a decline in the barriers to trade. If a decline in trade barriers had accounted for the trade boom over the three centuries following 1492, then globalization would have been the driving force, as implied by the world history rhetoric.
… the relative price fell across the first half of the 19th century, and at the most dramatic per annum rate seen across the whole half millennium before 1850. To repeat our comment above, we view this evidence as consistent with powerful globalization forces at work after the French Wars.
… However, it was Asian goods whose relative price fell in European markets over the three centuries, not the relative price of goods from the Americas.
… they suggest the following: European surplus income fell in the 16th century, so it could not have contributed anything to the trade boom; surplus income grew fairly vigorously in the 17th and 18th centuries, when its contribution to the trade boom must have been much more important; and surplus income boomed in the 19th century, when it must have contributed very importantly to the trade boom.
… The four estimates produce remarkably similar results. European income growth explained none of the 16th century trade boom: income actually fell during this period, as did the domestic relative price of these imported goods. The 16th century trade boom can therefore be explained either by rising Asian supply, falling Asian demand, or by some combination of the two. … In contrast, the more modest 17th century trade boom can be explained entirely by European income growth, as evidenced by the rising relative prices of non-competing imports during the period. The 18th century trade boom must be explained by a mixture of demand and supply: between 59 and 75 percent of the trade boom can be explained by European income growth; it follows that between 25 and 41 percent of the trade boom can be explained by changing Asian supply. Over the three centuries as a whole, European income growth explained between 50 and 65 percent of the inter-continental trade boom.
… Thus, by the time of the European Voyages of Discovery, the official imperial policy of shutting China’s doors to external trade was already in place.
Three hundred and fifty or four hundred years is a long time to leave world trade in the hands of others. Is it possible that China’s de-globalization move “crowded in” European trade with the rest of Asia?
… These relative price facts and the sources-of-trade-boom accounting for 1500-1800 are also consistent with the view that China crowded in European trade with the rest of Asia over the three centuries following da Gama. Of course, these relative price and trade boom accounting facts are not proof of the Chinese-retreat-crowded-in-Europe speculation, but they are certainly consistent with it.
.. In the 16th and 17th centuries, total factor productivity growth was very slow in European agriculture (even in English agriculture …), so land rents must have been driven primarily by land/labor ratios - periods of rising population pressure on the land being periods of rapid increase in the ratio of land rents to the wages of landless laborers, as well as, more importantly, periods of rising land rents by themselves. … how tight the English correlation was between the wage rental ratio and the land-labor ratio … pressure on the land between 1600 and 1850 not only lowered the wage/rental ratio but also raised deflated land rents. Thus, European population pressure on the land must have contributed mightily to the trade boom after 1600, and the mechanism was from decreasing land-labor ratio, to increasing land rents, to increasing economic surplus, and to demand for “exotic”
imports from Asia and the Americas. …
Three conclusions are inescapable: a quantitative study of the international economy after the Voyages of Discovery does not support the use of world history globalization rhetoric for the three centuries before Waterloo; it does support the view that European import demand was an important part of the trade boom following Columbus and da Gama; and it also suggests that the history of Europe’s Age of Commerce cannot be written without China.
Ireland’s ludicrous land boom as driven by restricted supply and obsessive demand:
If the control of land is left out of the equation, the sheer scale of the Irish property bubble is impossible to fathom. … new house prices increased over four times faster than house-building costs, five times average industrial earnings and more than seven times faster than the consumer price index. … Before the boom, land made up about 10 to 15 per cent of the cost of a house. At the height of the boom, it made up a breathtaking 40 to 50 per cent. … “certain landowners had accumulated large landbanks at the outskirts of urban areas which they then released in dribs and drabs in order to manipulate the market and artificially to maintain high land prices”. Essentially, a small number of very wealthy land speculators were able to shape the market in such a way as to ensure that the cost of buying the land it stood on made up a larger and larger proportion of the cost of a house. … By 2007, Irish farm land values were the highest in Europe, at €66,000 per hectare - an incredible price in a country with plenty of arable land and a relatively sparse population. It was 10 times the value of similar land in Scotland and six times more than the same fields would be worth in England. In May 2008, €13.5 million was paid for a 450-acre farm in Warrenstown, Co Meath - one of the highest prices ever paid for agricultural land anywhere in the world. … In 2007, almost half of all British farm land sold to foreign buyers was bought by Irish purchasers. In a 21st-century, high-tech, globalised economy, the historic thrill of buying up England was more potent than any satisfaction to be gained from creating real and sustainable wealth.
The land planning laws do not get mentioned, but zoning makes it easier to manipulate prices by controlling supply. In Oz the “certain landowners” with “large landbanks at the outskirts of urban areas which they then released in dribs and drabs in order to manipulate the market and artificially to maintain high land prices” are called ‘State governments’.
About narrative learning and teaching economics and teaching economics using practical examples:
The narrative theory of learning now tells us that information gets into the brain a lot more easily in some forms than others. You can get information into the student’s brain in the form of equations and graphs, yes, but it’s a lot of work to do that. If you can wrap the same ideas around stories, around narratives, they seem to slide into the brain without any effort at all. After all, we evolved as storytellers; that’s what we’re good at. That’s how we always exchanged ideas and information. And if a narrative has an actor, a plot, if it makes sense, then the brain stores it quite easily; you can pull it up for further processing without any effort; you can repeat the story to others. Those seem to be the steps that really make for active learning in the brain. …
So you can say the students who’d never had any familiarity with the term "opportunity cost" more or less guessed and got about what you’d expect. The ones who thought they knew something about it knew just enough to steer themselves in the wrong direction.
… So I started assigning a term paper in my upper-level course, which I hadn’t done for the reason of being pressed for time to do other things, and I noticed that the students got way more engaged in the course as a result of that paper. And I started cutting it back from 20 pages to 10 pages when I lost the T.A. (the grant ran out). And then from 10 to 5 -- each time I cut it back in length, the papers seemed to get better. Right now the length of the paper is maximum 500 words. I can spot 500 words no matter what size font they use, so I tell them I won’t read past 500 words, but I stress that the best papers are often only one, two paragraphs. The Braille dots example you can do in 80 words without any trouble at all. …
The idea of taking a few core things, working on them until you get them, and then moving on and adding complexity only when the root stuff is firmly embedded, that just seemed like such an eye-opener to me. It really really worked. And why not in economics? So I’ve been trying it there, and I’m convinced that it works there as well as in language.
The "Braille dots" example referred to was the question: why do the keyboards of drive-by ATMs have Braille on them? (Answer in the link.)