Universities and the Price of Ignorance

Richard Vedder:

My friend and American Enterprise Institute colleague Alex Pollack had a brilliant column in the Wall Street Journal on March 14 that unintentionally speaks importantly to one of the many scandals surrounding higher education: our students are weak in core knowledge about the development of our civilization.

More specifically, Pollack said an even cursory glance through history would tell you that the recent European financial crisis and threatened Greek debt default are hardly surprising--history is replete with scores if not hundreds of other examples. Governments use their sovereign and coercive powers to pressure people to buy their bonds. For example, our system of national banks created in the National Banking Act of 1863 resulted in considerable part because of Treasury Secretary Salmon Chase's desire to peddle bonds to finance the North's effort in the Civil War. Banks were coerced to keep U.S. bonds as part of their reserves. Political leaders love bond financing because it is less of an overt form of taxing the people than explicit direct taxation, and thus sometimes imposes a lower political cost.

Posted by Jim Zellmer at March 31, 2012 3:09 AM
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