Political, social, economic and educational forces influencing Economics Education in the United States (1885--2007): A case study in liberal arts advocacy
TABLE OF CONTENTS ACKNOWLEDGEMENTS i n ABSTRACT CHAPTER I. INTRODUCTION Purpose of the Study Purpose of Economic Education Developmental Eras Characterized By Significant Events Research Questions Significance of the Study Definition of Terms II. METHODOLOGY Historical Documentary Research Primary Sources Secondary Sources Internal and External Criticisms 1 3 6 8 8 10 21 21 23 25 26 III. BACKGROUND: THE ERA OF THE AMERICAN ECONOMIC ASSOCIATION; SETTING THE HISTORICAL CONTEXT (1885-1961) 30 Political, Social and Economic Forces 30 Adam Smith and the Emergence of the Science of Political Economy (1746-1778) 30 The Beginning of the House of Haves and House of Wants: The Federalists Versus the Democratic Republicans and the Founding of the United States of America (1792-1822) 33 The 19th Century and the Emergence of Industrialization (1849-1860) 36 World War I: The Great War and the Roaring 20s (1865-1929) 36 Rugged Individualism and the Need for Less Government Intervention in the Economy (1927-1929) 41 The Great Depression: Government Response and Intervention (1929-1946) 42 The Cold War: The Fight Against Communism vi
(1940-1990) American Affluence: the 1950s and 1960s (1945-1965) Movements in Education Educational Philosophy: the Role of Schools as Reflected in the Administration/Bureaucracy of Schools Educational Legislation Educational Methodology and Pedagogy Professional Organizations Movements in Economics Education Legislation Curriculum Professional Organizations Summary 47 51 53 53 62 66 70 75 75 76 84 89 IN RESPONSE TO THE JOINT COUNCIL OF ECONOMIC EDUCATION'S NATIONAL TASK FORCE ON ECONOMIC EDUCATION (1961-1988) 92 Political, Social and Economic Forces 92 The Rise of Field Castro and Communism in Cuba, Our Neighbor 90 Miles South of Florida (1959-1963) 92 Bay of Pigs Invasion and the Cuban Missile Crisis (1961-1962) 95 Mass Media's Influence on Society and Culture (1960s) 97 Another Presidential "New" Program: Kennedy's "New Frontier" (1961-1963) 98 President Kennedy Expands Trade with the European Common Market (1962-1963) 100 President Kennedy and Equal Pay for Meri and Women (1963) 100 The Space Race (1961-1969) 101 A Presidential Assassination Campaign Turns into a Presidential Assassination (1963) 104 Student Activism and a Growing Youth Culture (1962-1970) 105 Lyndon Baines Johnson arid the War on Poverty (1961-1969) 107 The Fight for Democratic Ideals in Asia, the Vietnam War (1965-1975) 114 President Richard Nixon and the Misuse of Power 118 1973 Oil Crisis and Further Economic Struggles in American (1973-1976) 120 The Election of a Peanut Farmer and the Nuclear Engineer, James Earl (Jimmy) Carter (1976-1980) 122 Reagan Revolution, a Hollywood Movie Star Wins a vii
Landslide Election (1980-1989) 127 Reaganomics or Voodoo Economics, a New Approach to Government Intervention in the Economy (1980-1992) 129 Movements in Education 131 Educational Philosophy 131 Legislation 144 Educational Methodology and Pedagogy 148 Professional Organizations 155 Movements in Economic Education 156 Legislation 157 Curriculum 164 Professional Organizations 189 Summary 191 AN ERA OF CLEARLY DEFINED CURRICULUM AND INSTRUCTIONAL STRATEGIES IN A WORLD OF EDUCATIONAL REFORM AND LEGISLATION (1989-2007) 202 Political, Social and Economic Forces 202 The Fall of the Communism in Europe and the Soviet System (1985-1991) 202 A Texan Cheerleader for American Consumerism and Conservative Republic Takes the Office of President (1989-1993) 205 Desert Storm and American Troops in the Middle East 211 The New Democrat, William Jefferson Clinton Brings Modern Progressivism to the White House (1992-2000) 212 Another Major Change in Mass Communication and Society (1993-1997) 216 The "New Economy" Brings Unprecedented Prosperity to the United States (1994-2000) 217 Violence in Society Decreases While Significantly Increasing in Schools (1999-2005) 220 Movements in Education 222 Educational Philosophy 222 Legislation 226 Movements in Economics Education 231 Legislation 231 Curriculum 239 Professional Organizations 255 Summary 256 viii
VI. SUMMARY AND CONCLUSIONS 263 Summary of Research Findings 263 What Can Advocates of Liberal Arts Education Learn From the Experiences of Economics Education? 265 Implications for Future Research 279 BIBLIOGRAPHY 282 VITA 301 IX
ABSTRACT This historical research will provide school leaders with a broad conception of the conditions, forces and processes behind the development of Economics Education. It serves as a case study of past and current practices and approaches to advocacy in economics education. Since it began in 1885, economics education has experienced many obstacles and successes as a part of its development in to a nationally recognized and tested content area. Economics appears on the National Assessment of Educational Progress for the first time in 2007. Throughout its history the political, social economic and educational forces in the United States have influenced the development of economics education in both positive and negative ways. In response, economics education has had to develop a well-defined advocacy framework in order to justify the importance of economics education in secondary education. This research will use historical documentary analysis to illustrate the successes and failures of the advocacy framework used in economics education. The researcher will identify the specific examples of advocacy strategies used by lawmakers, professional organizations, educators, theorists, government agencies, universities and colleges in the development of economics education as a national movement. Successful advocacy strategies in economics education include 1) a clearly defined purpose, 2) advocacy by related professional organizations, 3) legislative support and funding, 4) partnerships with colleges and universities, and 5) x
clearly defined standards, assessment and research. The advocacy framework illustrated in this case study can be used by any of the humanities or liberal arts looking to establish the importance of their inclusion into a secondary education curriculum. XI
CHAPTER I INTRODUCTION Purpose of the Study The development of Economics Education in the United States has been a 120 year process filled with many achievements and setbacks both internally, with conflicts in philosophy and methodology among professional economists and professionals in economics education, and externally in the form of social, economic, political and educational forces. This is a study of the social, economic, political, educational conditions and forces that have shaped Economics Education as an essential component of a liberal arts education. As such, the development of economics education in the United States can be viewed as a case study in liberal arts advocacy. The study will also investigate the processes by which Economics Education has sustained itself and expanded its role in the secondary education curricula at the national level. The researcher will identify the advocacy strategies of lawmakers, professional organizations, educators, theorists, government agencies, universities and colleges in the development of economics education as a national movement. The study will begin with a comprehensive analysis of the history of pre-colligate economics education in the United States from the start of the American Education Association in 1885. The study will identify the foundations of the economics education movement beginning in 1885 and moving through 1961. It will explore the development 1
2 of economics education from 1961 to 2007. The Joint Council for Economics Education was founded in 1961 and in 2007 the first National Assessment of Educational Progress test in economics was given by the National Center for Educational Statistics. According to Alan Greenspan, former Chairman of the Federal Reserve Bank of the United States, economic and financial education in the elementary and secondary classrooms is essential for a capitalist economy and democracy like the United States. In his speech on Financial Education at the 33rd Annual Legislative Conference of the Congressional Black Caucus, in Washington, D.C. on September 26, 2003, former Chairman Greenspan expressed his views regarding the importance of economic and financial education in the K-12 curriculum. Children and teenagers should begin learning basic financial skills as early as possible. Indeed, improving basic financial education in elementary and secondary schools can help prevent students from making poor decisions later, when they are young adults, that can take years to overcome... Focusing on improving fundamental mathematical and problem-solving skills can develop knowledgeable consumers who can take full advantage of the sophisticated financial services offered in an ever-changing marketplace. While some adults may believe that financial and related mathematical concepts are too complex for younger school children, I was pleased to have an experience that dispels such thinking. In June, I had the opportunity to discuss financial matters with a sixth- grade class that had begun a financial education program sponsored by Operation Hope, a national nonprofit organization. The children's surprisingly precocious questions demonstrated ability and a desire to learn more about the fundamental principles of money and banking. This encounter and countless others in classrooms and community centers across the country indicate that, in the long run, better basic education at home and in elementary and secondary schools can provide the foundation for a lifetime of learning. But not all have risen to the level of that sixth-grade class. We need to exert especial effort to improve the skills and earning power of those who appear to be falling behind (The Federal Reserve Board, Remarks by Chairman Alan Greenspan, September 26,2003).
3 Purpose of Economic Education A study of premises is of far greater importance than a study of the form of reasoning through which conclusions are drawn from given premises. ..when certain parts have come deductive, the character of the laws and the method of reasoning best fitted to the science, can be seen, while other parts, yet inductive, furnish that incentive for earnest study through which they can be changed to deductive form.. .political economy trains a student in reasoning similar to that which he has to do in every day life (Patten, 1894). An accurate and workable image of the social system in general, and the economic system in particular is... increasingly essential to human survival. If the prevailing images of the social system are unrealistic and inaccurate, decisions, which are based on them, are likely to lead to disaster... Economic Education, therefore, along with education in other aspects of the social system may well be one of the most important keys for man's survival... In a complex world, unfortunately, ignorance is not likely to be bliss and a society in which important decisions are based on fantasy and folk tales may well be doomed to extinction (Boulding, 1969). Simon N. Patten was a professor at the University of Pennsylvania and leader in the philosophical discussion of the ethical value of economic study from the 1890's to 1910's. K. E. Boulding was a leading researcher in the field of economic education from the 1960's through the 1980's, his work in economic education focused on the purpose of economic education. When identifying the purpose of economics education the following themes can be identified: the role of economics education in promoting and sustaining capitalism in the United States, the role of economics education in the teaching of citizenship, along with promoting and sustaining the democratic ideals of the United States, the role of economics education in the preparation of Americans as successful participants in a global community. Boulding's quote addresses all three purposes of economics education. A great deal of discourse has taken place in the last 150 yegrs as to the purpose of economics education in secondary schools. In 1885, the American Economics
4 Association thought economics education in the elementary and secondary school was too ambitious of a goal to pursue. In 1894, a report by the National Education Association advised the inclusion of economics education into history, civics and geography courses and opposed "formal instruction" in economics for secondary education (Armento, 1986, p. 97). Later in the 1920's, economics education became more pragmatic and part of a desire to teach business economics in a booming economy. As a result of the Great Depression the purpose of economics education changed again to focus on personal or consumer economics with a focus on economic literacy, consumer competency and teaching lifelong skills to protect consumers from their own ignorance. The separation between pure economic theory and consumer economics came into conflict first during the 1940's. During this period the proponents of pure economic theory gained dominance. The Committee for Economic Development met in New York in 1947 to discuss the direction of economics education. According to economic education historian Beverly Armento (1986), the Committee for Economic Development identified four purposes for economics education. The following four purposes of economics education were: 1) A more favorable attitude toward the private enterprise system 2) More intelligent use of income by consumers 3) Better occupational adjustment and occupational distribution 4) A clearer understanding of present day economic issues (p. 99). The purpose of economics education changed once again in the 1950's with the beginning of the Cold War. Suddenly democracy and capitalism were being threatened
5 by the growing power of the Soviet Union and economics education was seen as a way to prevent the encroachment of this threat into the United States. During this period»the U.S. government required students to learn the virtues of capitalism and a free market economy. In a pure capitalistic or free market economy the decisions regarding what to produce, how to produce it and for whom, are all answered by the interactions between households and firms. In these economies, both households and firms own the factors of production privately. In opposition, a command economy, like the Soviet Union, answers the three basic economic questions through a central planning system or the government. The government also owns the factors of production in these economies. A major shift in the role of economics education occurred with the founding of the National Council for Economic Education in 1961. In a report published by the Committee for Economic Development titled "Economic Education in the Schools: A Report of the National Task Force on Economic Education" a new clear direction and scope was identified for the K-12 economics education curriculum. In this report economics education was identified as necessary for effective citizenship and understanding of institutions, historical events and democratic values. The task force identified two mandates: the mastery of economic principles and their interdependence, and the ability to correctly apply these concepts (A Report of the National Task Force on Economic Education, 1961). The purpose set forth by the National Task Force has continued to be the guiding principle for all economics education from this point on. In a speech given by Philadelphia Federal Reserve Bank President Anthony Santomero at the Pennsylvania Economic Association Annual Conference, West Chester University, West Chester, PA on May 30, 2003, Santomero identified how the Federal Reserve Bank sees
6 the purpose of economics education and their role in meeting this purpose. By having the tools and knowledge to improve economic and financial well-being this contributes to the well being of a democratic society. This society needs informed citizens who can use economic decision making tools to build wealth and economically stable neighborhoods and communities. Citizens need access to information and to be able to understand and use this information for a better understanding of how policy makers impact the economy. An understanding of the Federal Reserve and its policy action help individuals to understand how these policies will impact their own lives (Philadelphia FRB President Anthony Santomero, 2003). Developmental Eras Characterized By Significant Events The first organization to discuss the need for economics education was the American Economic Association, organized in 1885: a not-for-profit scholarly organization, which promoted economic research. The AEA still identifies the same purposes in 2008 as they did in 1885, which are: 1. The encouragement of economic research, especially the historical and statistical study of the actual conditions of industrial life. 2. The issue of publications on economic subjects. 3. The encouragement of perfect freedom of economic discussion (American Economic Association Bylaws). In 1885, the American Economic Association first began discussions of what content and skills an appropriate economics education would contain (Clow, 1899). The field of economics in the school curriculum has been tied to citizenship, democracy and free market capitalism over the last 122 years. As a social science it is a subject matter that can easily be overlooked whether it was done in the past by people in the 19th Century and the 20th Century or today even in the 21st Century. In the late 19th Century, it was thought that the purpose of education was to produce skilled and literate workers for an
7 industrial economy, as identified by the American Economic Association in 1885. This purpose held sway through the early 20th Century until the mid 1950's when people began to identify the purpose of education being a means to produce the next generation of mathematicians and scientists to out pace the Soviets, as can be seen in the legislation written in the National Defense Education Act of 1958 (PL 85-864). With the dawning of the 21st Century economics education has come full circle back to a purpose which reflects the need for a sound understanding of economic concepts and thinking in order to compete in a global society and to maintain a democracy as seen in the passage of the Excellence in Economic Education Act (20 U.S.C. 7267). Congress first authorized the Excellence in Economic Education (EEE) Act (20 U.S.C. 7267) as a part of the landmark No Child Left Behind Act, and appropriated $1.5 million for EEE in Fiscal Year 2004. Almost $1.5 million in funds have continued to be appropriated each year for the Excellence in Economic Education Act through 2008. Through it all, economics education has prevailed in the battle for importance and meaningfulness in the elementary and secondary curriculum. This study will show how economics, a field first referred to as the "dismal science", by Thomas Carlyle in 1849, has managed to have staying power in the American elementary and secondary school curriculum in spite of the ebbs and flows in social, political and educational movements. Today, economics education is the vehicle through which the democratic and capitalistic ideals of the United States will be transmitted to future generations of America's citizens and leaders.
8 Research Questions 1) How was the foundation for the economics education movement established (1885-1961), in response to prevailing political, social, economic and educational conditions? 2) In consideration of the prevailing political, social, economic and educational conditions (1961-1988), how did the economics education movement develop? 3) In consideration of the prevailing political, social, economic and educational conditions (1989-2007), how did the economics education movement develop? 4) How can lessons learned from the economics education movement provide a framework for advocacy for liberal arts education? Significance of the Study This historical research will provide school leaders with a broad conception of the conditions, forces and processes behind the development of Economics Education. It serves as a case study of past and current practices and approaches to advocacy in economics education. For the field of economics, the discussion regarding the importance of the subject matter within the secondary school curriculum is not a new one. This is a field that has been through this discussion in many forms due to the changing social, economic and political context in the United States. Economics education has a one hundred and twenty year history in which it has had to identify its significance to school leaders on both the state and national level. In light of this, the history of economics
, • ! • 9 education in the United States is an appropriate case study for school leaders looking to successfully engage in liberal arts advocacy. In a world of The No Child Left Behind Act of 2001 (PL 107-110) leading to mandated state testing at multiple grade levels, educational professionals in many content subject areas have felt the push to justify their importance in the secondary education curriculum. Federal and state levels of public school funding are being influenced by how well or poorly schools perform on state tests. This has increased the pressure for schools to perform and take a hard look as what to include and exclude from the curriculum. Individual states have been given some choice as to what content areas to include in their state tests. When subject areas are not on the state test, it is only natural that schools and teachers do not place the same emphasis on the teaching and learning of that subject area. In an article written by Walstad and Rebeck (1999) in which they share their research regarding adult performance on the Basic Test for Economic Literacy. There is statistical significance in difference of test scores for those adults who had taken an economics course in either high school or college. Participants who took an economics class in high school or college scored twelve percentage points higher than those without economics education. They concluded that improvement in economic literacy needed improvement in economic education. Their data showed that adults with some formal economic courses still do not have a high level of understanding of basic economic concepts. A study by the Hearst Corporation also concluded that a significant percentage of the American public lacks a working knowledge of basic business and economic facts of life. Most respondents expressed reliance on the media as the primary source of business and economic information. Half of the participants in the study responded that they felt uncomfortable
10 because they did not know as much as they thought they should about economic concepts (Brown, 1987). Many teachers believe they are teaching economics, but they are not in stead they are teaching opinions about economic institutions or the narrative of American economic institutions and sometimes even false information (National Task Force on Economic Education, 1961). In order to improve the quality of economics education, the profession needs to be explicit about identifying and teaching important content and skills. The discipline of economics provides a method or framework for thinking and decision-making. According to, Stephan Buckles, a noted economics education advocate and researcher, educators should focus "on teaching students the "method" of economics" because economics education "trains students to be logical and analytical thinkers" (Buckles, 2001). Definition of Terms TERM " DEFINITION Advanced Placement Courses and exams accredited by the College Board, which allows high school students to pass a national exam and earn college credit. Uses a national standardized curriculum based on introductory college courses. Allied Powers The alliance of the countries Great Britain, France, Japan, Russia, Italy and the United States during World War I. American Economic Founded in 1885 by a group of economists at the university Association (AEA) level as a professional organization for the purpose of economic research and discussion. Baby Boom The sustained upsurge in birth rate in the United States following World War II that covers 15 years of explosive population growth.
11 Bay of Pigs Invasion A failed attempt to invade and overthrow Cuba backed by the U.S. CIA. in 1961. Leads up to the Cuban Missile Crisis. Business Cycle The reoccurring fluctuations in the economy in which the real Gross Domestic Product increases and decreases over time. Capital The tools used to convert other economic resources for the production of final goods and services. Financial capital can be in the form of money or credit being lent to firms or countries for the purpose of economic development. Capitalism An economic system that includes private ownership of the factors of production and allowing the market or interactions between households and firms to determine what is produced, how and for whom. Castro, Fidel Fidel Alejandro Castro Ruz, president and military dictator of the communist island of Cuba, 90 miles south of Key West, Florida. Central Powers The alliance of the countries Germany, Austria-Hungary, Turkey and Bulgaria during World War I. Classical Economics Economic school of thought that believes the economy will always self correct to full employment and any government intervention will create inflation. Committee on Economic Education (CEE) Established by the American Economic Association in 1955 to encourage and foster professional work on economics education. Communism Social, political, and economic system in which all activity is controlled by a totalitarian state dominated by a single self-perpetuating party. Comprehensive High School A high school in which students are connected through a common core curriculum and social- cultural experiences of daily high school life while perusing differentiated courses of study reflective of their intellectual abilities and academic talents.
12 Cuban Missile Crisis October 27, 1962, an American U-2 spy plane is shot down over Cuba, killing the pilot. President John F. Kennedy readied troops to invade Cuba, and the Soviet Union prepared to fire at US cities if we invaded. After tense negotiations with the United States, Khrushchev agrees to withdraw Soviet missiles from Cuba and the U.S. agrees to withdraw missiles from Turkey. Consumer Education Comes out of vocational education legislation and curriculum with an emphasis on the daily economic decisions of a consumer in the economy. Tends to be taught in the business education department. Creditor Nation A Country, which is providing capital to other countries. Other countries are borrowing from this creditor country. The country is said to have a capital outflow. Debtor Nation A Country, which is borrowing capital from other countries. Other countries are lending to this debtor country. The country is said to have a capital inflow. Democratic-Republicans Founded by Thomas Jefferson and James Madison with a belief in the strict interpretation of the constitution. Emphasis on grassroots organization of the government with a focus on state's rights and the rights of Yeoman farmers, non-slaveholding small family farms. Depression A significant downturn in the economy, which includes periods of high unemployment and decreased output over a sustained period of time. More severe than a recession. Dewey, John Founder of the progressive movement in education, an experiential philosophy; an education derived more from the student than from the teacher. It was a student-driven, student-centered concept of education that focused on the balance between individualism and collectivism. Schools should be practical. Economics A social science that deals with the production, consumption and distribution of wealth. A study of the choices societies make in a world where there are unlimited wants and limited resources.