High-School Economics

Corporate Sponsorship and Pro-Market Bias

In the push to standardize high-school curriculums and testing, "corporations and foundations will have even more opportunities to foist their "free-market" bias on students.

Mark Maier

Where does the largest group of U.S. students learn about economics? The surprising answer is: high school. Every year, over one million high-school students, about half of all graduates, take an economics course—usually in their senior year. Thirteen states, including California, New York, Texas, and Florida, require economics for high-school graduation. Course content varies between states, ranging from "Free Enterprise" in Louisiana to a consumer education option in Illinois.

Unlike in disciplines such as biology, history, math, and reading, where battles over the curriculum have made news headlines, most people—even most economists and high-school teachers—don't know how decisions about economics courses are made. However, corporate foundations, particularly those with an extreme conservative bent, have paid very close attention to high-school economics. As a result, textbooks, classroom activities, websites, and new national standards depend increasingly on corporate donors whose ideological influence often goes unrecognized. With national economics testing due to begin in 2005, and corporate-driven course materials disseminated even more widely, economics course content is likely to swing even further toward a "free-market" ideology.

A Corporate Curriculum

When high-school economics courses were first introduced in many states during the 1970s and 1980s, publishers filled the textbook void. But lesson plans were badly needed by teachers, many of whom had no formal economics background. Corporations and nonprofit organizations, often working together, stepped in with a wide range of supplementary readings, classroom activities and, in recent years, websites.

Some of these course materials are blatantly self-serving corporate promotions. For example, the McDonald's video, Great Breaks: Taking Charge of Your Future, shows the "importance of the skills and discipline learned through one's first job." Seemingly more credible materials are offered through privately-funded, nonprofit organizations such as Junior Achievement, which claims to reach four million U.S. students every year with its "free enterprise message of hope and opportunity." Founded in 1919 as an after-school program in which students set up a small business, Junior Achievement first entered the classroom in 1975. Since then, it has broadened its scope to include a kindergarten through 12th-grade economics curriculum with a high-school economics course taught by business executives. UPS, ExxonMobil, Goldman Sachs, and New York Life Insurance are among the corporations that have provided large grants to Junior Achievement. Kraft Foods is the largest single provider of volunteer economics instructors for Junior Achievement, with more than 2,100 participating employees in 2001.

The Foundation for Teaching Economics (FTE), a nonprofit organization endorsed by Junior Achievement, has also offered classroom activities since 1975. Recently, the FTE has expanded its publications and weeklong teacher training workshops. In 2001, more than 2,000 teachers participated in these workshops thanks to foundation and corporate funding, including support from two of the largest donors to right-wing causes, the Coors family and Richard Scaiffe (heir to the Mellon oil and banking fortune). The FTE offers internships for teachers, primarily at conservative think tanks such as the Cato Institute and the National Taxpayers Union. It also uses an "Economics of Water and the Environment" curriculum funded by Coca-Cola and written by the Political Economy Research Center, a Montana-based research organization that has led opposition to the Endangered Species Act and the Superfund. The FTE's environmental workshops want teachers to reject "old myths" that "only government is big enough to solve environmental problems," in favor of "new understandings" that "clearly defined property rights and market transactions can provide environmental quality."

Through FTE programs, students and teachers-in-training receive a one-sided, pro-market message that does little to encourage a critical analysis of today's important economic policy issues. FTE materials support the group's mission of training teachers to "understand the value of free markets at work," while consistently opposing government intervention when markets cause problems such as growing economic inequality or environmental destruction. The FTE assesses the effectiveness of its programs on the basis of how much teachers changed their "understanding of government's role."

The group most influential in pre-college economics is the National Council on Economic Education (NCEE), the largest provider of curriculum materials for use in kindergarten through 12th grade. Originally founded in 1949, the NCEE has urged states to incorporate economics into their social studies curriculums and to establish separate economics courses as well. (It has succeeded on both counts.) It has also created a network of councils in all 50 states as well as more than 200 affiliated university centers for training primary and secondary school teachers. Some NCEE state councils, such as Delaware's, offer a large number of teacher training programs, while in California, elimination of state support for economics teacher training (which had originally been mandated to accompany required economics courses) has reduced the effectiveness of many university-based centers.

Although the NCEE has worked in partnership with both Junior Achievement and the FTE, its course materials are less overt in promoting the corporate agenda. However, it receives generous support from corporations such as State Farm Insurance, International Paper, NASDAQ, and UPS. The NCEE's website is well stocked with lesson plans, current events articles, and a growing list of publications. These classroom materials actively engage students in cooperative group projects with clever titles such as "Great Economic Mysteries" and "Hey, Mom! What's for Breakfast?"

On occasion, the conflict of interest between the subject matter and the funding source is obvious. For example, the NCEE's Stock Market Game curriculum is sponsored by the Securities Industry Association, a trade group representing banks, brokers, and mutual fund companies. Teacher instructions and student activities give the mistaken impression of equal ownership of stocks across income groups, and downplay negative consequences such as stock market bubbles.

Usually, however, corporate influence is more subtle, noticeable in what is left out of the curriculum. For example, Bank of America pitched in over $3 million for the NCEE's Financial Fitness for Life, attractive teaching materials coauthored by accomplished but decidedly conservative economics educator Mark Schug. The first lesson plan tempts students, "How to Really Be a Millionaire," based on the content of two bestsellers, Getting Rich in America and The Millionaire Next Door. The "millionaire" approach reinforces unrealistic expectations among many youth. A recent poll by Junior Achievement found that nearly one quarter of teens believe they will have $1 million in assets by age 40, while 15% think they will earn more than $1 million a year. Aside from being unlikely—the actual proportion of current million-dollar earners is about one in a thousand—the curriculum downplays the impact of inheritance and the earnings of corporate executives, both important starting points for understanding the U.S. economy.

A more complete curriculum would ask students to think critically about the "me first" approach endorsed by Financial Fitness for Life. In addition to warning against credit scams, a personal finance course should examine why there is pervasive consumerism and unnecessary advertising in the U.S. economy. Also, the curriculum should introduce students to empirical facts about income and wealth distribution, pointing out the role of race, sex, unionization, and executive compensation—information ignored entirely in "How to Really be a Millionaire" and in Lesson Six of Financial Fitness for Life, "Why some jobs pay more than others."

Other NCEE materials repeatedly teach about the benefits of markets, and the problems associated with government intervention. When a debate is presented, it usually features a situation in which students and non-economist teachers are already likely to favor government intervention such as pollution abatement and reducing male-female wage differences. In these activities, students read an eloquent argument for free-market solutions that is likely to challenge their pro-government interventionist predilections. Equally strong arguments critical of market outcomes would not only make the lessons less one-sided, but would also prepare students to understand current policy debates about discrimination, environmental regulation, and workers' rights.

Standards Take Over

In 1994, Congress mandated economics as one of nine core subjects for which national standards should be developed, and the U.S. Department of Education designated the NCEE to lead the effort. In 1997, with assistance from the FTE, AT&T, and others, the NCEE produced the Voluntary National Content Standards, a list of 20 standards and accompanying teaching strategies for students in kindergarten through 12th grade.

The economics standards were published with little fanfare, a remarkable non-event in comparison with other disciplines in which standards evoked furious debate. In 1994, Lynne Cheney, then a researcher with the right-wing American Enterprise Institute, forced historians to abandon relatively moderate standards on the grounds that they paid too much attention to women and minorities. In biology, state-level standards have also been contested terrain, in which the teaching of evolution is required in some states but not in others. By contrast, the economics standards were widely accepted by committees of the American Economic Association (AEA), teachers, and administrators.

The economics standards reflect the free-market bias shared by most economists, tempered with a nod toward occasional federal government intervention to prevent unemployment or inflation.

Consider Standard #13: "Income for most people is determined by the market value of the productive resources they sell. What workers earn depends primarily on the market value of what they produce and how productive they are." Even though this reflects the majority viewpoint among economists, standards like #13 are contradicted by historical facts. In this case, the standard's narrow focus on paid work leaves out wealth, a major source of U.S. economic inequality, and focuses on market transactions, which devalues unpaid household labor. Also, the standard attributes people's incomes to productivity, whereas real-world studies show that incomes are affected by racism, sexism, and how much bargaining power workers have.

Practically the only published criticism of this bias came from the journal Feminist Economics, where economists outside the mainstream of the AEA pointed out that the standards' focus on free-market principles causes the curriculum to overlook issues of gender, race, class, the environment, and unequal development between rich and poor countries.

Although the standards are voluntary, they affect most published classroom materials. The NCEE, the FTE, and Junior Achievement carefully key all publications and website activities to the standards. The content of future textbooks is also likely to be influenced by the standards, because textbooks must meet requirements in populous states where most sales will take place. One best-selling author reports rewriting his high-school economics textbook when Texas requested a more 'balanced' (read: less favorable) approach to labor unions.

Because of mergers between publishers, there are now only four dominant publishers of pre-college economics textbooks, and McGraw-Hill alone publishes four of the top 11 books. In 1999, BusinessWeek, a McGraw-Hill subsidiary and major contributor to the NCEE, published a 20-page supplement on NCEE's programs in its 70th anniversary issue. The NCEE is careful not to promote any one publisher's book, but as more schools require economics courses—and economics textbooks—McGraw-Hill's support for the NCEE will clearly benefit the publisher's bottom line.

Testing on the Way

Even though national standards are voluntary, their existence makes it easier to include economics in future nationwide testing. Over half of all states already include some economics content in their required social studies tests. Economics is also one of the fastest growing Advanced Placement (AP) test subjects (although only 1% of high-school graduates have taken AP-level economics). Even greater change will come in 2005 when the congressionally mandated National Assessment of Education Progress begins testing 12th graders in economics, giving extensive media attention to economics in the "Nation's Report Card" already distributed for reading, writing, math, science, and history.

The test's content is under debate, in particular whether it should focus on the economics curriculum as reflected in the NCEE standards, or on practical consumer finance topics taught in some states and favored by some teachers as more appropriate for pre-college students. Most likely, the NCEE standards—and their pro-market bias—will win out because they are already the basis for some state tests, and because the NCEE curriculum is used so widely, even in states like California that have not adopted the standards.

What is the likely impact of national economics testing? Tentative findings suggest that taking a college economics course causes an ideological shift to the right. For example, a Gallup poll study of college seniors found that the study of economics influenced answers on policy questions, such as the need for government intervention to prohibit oil companies from raising prices after a Mideast crisis. Nearly three quarters of those who studied economics said "no" to government price controls, while only about one quarter of those who did not study economics opposed such action.

Information about the political impact of high-school economics courses is more fragmentary. In April 2001, the Wall Street Journal celebrated a Junior Achievement poll that found over 80% of teens believed taxes are "too high." (Less well publicized was 70% teen support for unions to "continue trying to promote laborers' rights and needs.") In the NCEE's Test of Economic Literacy, a large sample of high-school students "failed" the most politically biased questions at the same high rate at which they missed other questions. For example, 61% could not identify the basic tools of monetary policy. They also did not answer "correctly" a question that associated pay with productivity, a relationship that holds true only in unrealistic free-market models. Nor did they agree that an increase in the number of fast-food restaurants would lead to "higher quality." (Take the test at www.ncee.net/cel/test/index.php).

What's Next for Economics Education?

As the Test of Economic Literacy shows, students are not learning very much in high-school economics classes. It may be that some teachers, unconvinced by the mainstream approach to economic issues, have not taught the standards as intended. And perhaps a few students intuit the unreal conceptual view of conventional economics.

More likely, in the trenches of the high-school classroom, standards dictated from above do not directly affect day-to-day teaching practice. For example, California's state standards require that students be able to "describe the current economy and labor market, including types of goods and services produced, the types of skills workers need, the effects of rapid technology change, and the impact of international competition." This is only one of 29 outcomes expected for a one-semester high-school economics course. Not surprisingly, it is difficult for teachers to meet such overly broad standards.

The Voluntary National Content Standards are an improvement in clarity over such state standards, but those who actually teach high-school economics often do not subscribe to the approach taken in the standards. When states mandated economics to be taught in high schools, responsibility fell to social studies departments and therefore often to historians, who traditionally emphasize facts about time and place.

The difference between most economists and many (although certainly not all) historians and other social studies teachers is evident in their approach to Standard #5: "When individuals, regions, and nations specialize in what they can produce at the lowest cost and then trade with others, both production and consumption increase." As Pomona College economist Cecilia Conrad points out, "A historian is likely to ask, 'Whose production and whose consumption?' The economics standard suggests that everyone always gains from trade, but there are historical examples where the distribution of benefits from trade is unequal." For example, suppose a high-school teacher wanted to analyze the World Trade Organization (WTO) in class. The national standards begin with a theoretical argument favoring free trade. But a teacher with a history or social studies background would be likely to ask why WTO rules protect patents, but not the environment or workers' rights.

Although national testing may push instructors toward the NCEE's ideologically driven standards, teachers can still challenge students to reflect critically on the choices they will face in the real world. Corporate-sponsored resources do provide a wide range of attractive, ready-to-go classroom handouts, so teachers strapped for course materials may want to use them as a starting point. For example, the one-sided materials in Financial Fitness for Life might be used in combination with sources recommended by the PBS program Affluenza (www.pbs.org/kcts/affluenza/). Also, students might be asked to assess the authors' biases in, for example, Junior Achievement and FTE materials.

Also, teachers can adopt alternatives to the "free market" curriculum. Unfortunately, only a few left-of-center organizations are producing curriculum materials for high-school economics courses, and of course none receives the kind of funding available to the NCEE, FTE, or Junior Achievement. Nonetheless, teachers can obtain many thoughtful lesson ideas for little or no cost. United for a Fair Economy (www.ufenet.org) sells books and workshop kits; Rethinking Schools (www.rethinkingschools.org) offers classroom activities, including some for lower grades; the Center for Economic Conversion (www.conversion.org) offers a full curriculum on sustainable economics; and other materials are available from the Human Rights Resource Center (www.hrusa.org).

However, the corporations and foundations that support course materials from Junior Achievement, the FTE, and the NCEE have deep pockets. High-school economics courses already follow a largely-unrecognized conservative ideology. Without more careful attention from teachers, economists, and interested citizens, students are likely to receive increasingly one-sided indoctrination in the "free market" point of view.

Mark Maier teaches economics at Glendale Community College in Glendale, California.