Issue 14, Fall 1997

William A. McEachern, Editor

Virtual Economics

Speaking of pre-college economics, Virtual Economics: An Interactive Center for Economic Education is a CD-ROM aimed at teachers in primary and secondary schools. According to the Introduction, its mission is "to see that every student graduates from high school with an understanding of how economics can help them throughout their lives to be effective and informed citizens, consumers, savers, investors, producers, and employees." The project was funded by the National Science Foundation and developed jointly by the Nebraska Council of Economic Education and the National Council on Economic Education.

The central feature of the CD-ROM is the Interactive Center, which has four "rooms" focusing on (1) fundamentals, (2) macro, (3) micro, and (4) international. With a mouse, the user can navigate through these rooms and select icons representing major topics. For example, the "fundamentals" room contains icons for scarcity, opportunity cost, economic institutions and incentives, economic systems, social goals, productivity, exchange, money and interdependence. In all, 22 topic icons appear in the four rooms (one topic neglected was comparative advantage). A click on a topic icon summons a page offering several more icons. These include an animated element (usually a talking head), voice-overs, written descriptions, or text material.

The medium of this learning tool is appealing, and some of the message comes through. However, much of the message seems dated and confusing. The content could have been written a decade ago. For example, a discussion of fiscal policy priorities of U.S. presidents stops with President Reagan. The discussion of monetary policy includes a grainy video of former Fed Chairman Arthur Burns, who left that position in the Carter administration. One market scene pictures an Esso Extra gasoline pump, a brand name ditched for Exxon decades ago. A pie chart shows 7% of national income coming from profit and 10% from interest; that was the picture in the 1980s but today's division is the reverse.

Much of the content appears to be written by a committee, a committee that seldom met. The explanation of aggregate demand and aggregate supply is muddled. Aggregate demand is initially described as C + I + G + Xn, but net exports unexplainably disappear from the in-depth discussion. Aggregate supply is also confusing. First, aggregate supply is used interchangeably with aggregate output - "aggregate supply is the total quantity of goods and services produced in an economy in a given time period. Constraints on potential aggregate supply [where'd that come from?] are the quantity and quality of productive resources and the level of available technology." The central graph for this topic shows an upward sloping aggregate supply curve asymptotically approaching the full employment level. Yet, the written material talks about output exceeding the full employment level.

Two goods used to explain market forces are unhelpful. The first is the widget (nudge, nudge, wink, wink), which is as vapid an example as ever. I propose banning its use. The second example is the Edsel, which appears as the icon depicting market forces. A voice-over explains that because the Edsel's price was high, few were sold. But because few were sold, they are now scarce collectors items so their price is high. Imagine some high school teacher trying to explain supply and demand with the Edsel.

Because topics can be accessed in any order, there is no natural progression or building of material. Thus the subject does not unfold, but is a series of relatively isolated topics. The first version of this CD (Version 1.0), which has a 1995 copyright, has a Resource Library containing about 140 books, parts of books, and teacher aids such as lesson plans. Much of the library material is dated. For example, one of the resources available on the disk is a 1981 copyright of Michael Veseth's Introductory Macroeconomics. That book was written during an era of high inflation, so inflation takes center stage: "Inflation is today's most severe economic problem. It is also our least understood problem." Another resource is McConnell & Brue's 12th edition (1993). The CD producers scanned textbook pages to disc, but many exhibits are splotchy and all but unreadable. Despite the flaws in reproduction, at least this textbook is available to an ambitious teacher intent on sorting things out (though pages cannot be printed out).

A revised version of the CD (Version 2.0), which became available last spring, dropped some books, including McConnell & Brue, from the resource library (because of copyright restrictions) and cross-referenced material on the Voluntary National Content Standards in Economics. Version 1.0 was free to teachers, but Version 2.0 sells for $75. I'm told that the second version is not selling well - funny how quantity demanded drops when the price jumps from zero to $75.

To some extent this CD-ROM is an example of the medium getting ahead of the message. The mechanics of putting together something like this are so daunting that less time and energy are left for quality control and internal consistency. If this were my only source of information about economics, I would develop little feel for the subject, particularly macroeconomics. I certainly would be in no position to teach it.

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