What causes prosperity?

..is probably one of the most fundamental questions you can ask about the human condition.  Adam Smith answered it in 1776 with the Wealth of Nations  (which, by the way, many authors of another famous document of that same year had read and were familiar with).    Bryan Caplan, an economist at George Mason University and a blogger at one of my favorite economics blogging sites, Econlog, points out how most people still don't get the answer right.  In a recent post he tells this story:

When I teach undergraduate labor, I lecture on "Why the Standard Story of Labor Is Wrong."  [That is, why we are richer today than 100 years ago--ed.] Here's the standard story, according to me:

1. In the days before the minimum wage, unions, etc., life was terrible for workers because employers paid them whatever they felt like paying them.

2. But then government became more progressive, and changed the laws.

3. Life is now better for workers because employers' greed has been tamed.

How many Vermont social studies teachers believe this story? How many Vermont legislators?  How many of the people that represent us in Washington?   How many journalists writing about Vermont politics, business, or economics?  How many editorial writers?  And how many Vermonters in general?

As Professor Caplan asks:

Does anyone really believe such a silly story? 

I would guess that the answer in Vermont would be that most do.  Read the entire post, and then read Arnold Kling's response.

Comments

[Rick]

And how many professors teaching economics at colleges and universities around the state?