Capitalist Manifesto; A specter is haunting Europe. It's the gospel of free markets, loosed from chains.

Byline: Stefan Theil

Europe could use more people like Ehssan Dariani. The 26-year-old entrepreneur runs a hot Internet start-up called studiVZ--Europe's fastest-growing social network for university students. Since setting up in a cheap Berlin loft only last fall, he's already hired 25 people. Yet when Dariani looks back at his high-school days, a decade ago in the west German city of Kassel, he remembers his teachers warning against exactly what he's doing. "They taught us the market economy was a dangerous wilderness full of risk and bankruptcy," Dariani says. "We never learned how prices affect supply and demand, only about evil managers and unjust wages." If he'd listened to his teachers, he'd be among the vast majority of German students who dream of becoming civil servants or fitting into the comfortable hierarchy of a traditional corporation. Instead he set out and created some desperately needed jobs.

Ask any European what he learned at school about how the economy works, and you'll likely hear a similar story. A recent study of German high-school textbooks by the Institute for the German Economy, in Cologne, found entrepreneurs--instead of getting credit for creating jobs--taking the blame for everything from unemployment to alcoholism to Internet fraud and cell-phone addiction. Some high-school social-studies textbooks teach globalization as an unmitigated catastrophe; students are advised to consult the radical anti-globalization protest group Attac for further information. In France, books approved by the Education Ministry promote statist policies and voodoo economics. "Economic growth imposes a way of life that fosters stress, nervous depression, circulatory disease and even cancer," reports "20th-Century History," a popular high-school text published by Hatier. Another suggests Margaret Thatcher and Ronald Reagan were dangerous free-market extremists whose reforms plunged their countries into chaos and despair.

Such blatant disinformation sheds new light on the debate over why it is that Europeans lag so far behind Americans in rates of entrepreneurship and job creation. It also helps explain widespread resistance among Europeans to accepting even the smallest reforms of their highly regulated economies. But recently there appears to be a small but growing backlash against the popular vilification of capitalism. Unthinkable only a decade ago, business associations, think tanks and a whole slew of capitalist and libertarian activists, many only in their 20s and 30s, are leading a tiny but noisy counterattack. Their common goal: making sure the next generation of Europeans is less in tune with Karl Marx and more with Adam Smith.

Fighting windmills? Maybe not. In Germany, the Banking Association is helping change attitudes by supplying instructional materials explaining markets to more than 20,000 teachers. "A few years ago the Education Ministry would have kicked us out," says the association's Wilhelm Burklin. One participating social-studies teacher, Christel Stoldt at Winkelmann High School in the town of Stendal, reports rising interest among students about how the market economy works. "I have to overcome a lot of prejudice against companies and entrepreneurs," she says. In France, the Centre de l'Entreprise has sent several hundred teachers on internships to companies. Director ...