Teaching economic competence
When the division of labour has been once thoroughly established, it is but a very small part of a man's wants which the produce of his own labour can supply.
The Wealth of Nations ADAM SMITH, 1776
How did man come to be involved in the intricate economic organization in which he now finds himself? It is difficult to understand, and certainly every economic development cannot be predicted. Therefore much is still unknown about how men and nations maintain their economic integrity. As Adam Smith wrote over and over again, "Every man is rich or poor according to the degree in which he can afford to enjoy the necessaries, conveniences, and amusements of human life. The far greater part of them he must derive from the labour of other people, and he must be rich or poor according to the quantity of that labour which he can afford to purchase."1 Thomas Hobbes had enunciated, even earlier, that power consists of wealth, and that the relationship is very close between private affluence and public policy.
From a purely selfish point of view, then, it is desirable to gain understanding of the following overwhelmingly important problems of modern economics: the causes of depression, unemployment, and inflationary booms; and the causes of prosperity, full employment, and rising standards of living. But no less important is the fact--clearly to be read from the history of the twentieth century--that the political health of a democracy is tied up in a