The lack of originality and creative thinking in the Wizarding world is also the source of the Weasley twins' success as entrepreneurs and shop-owners. They are the only students who ignore schooling and prefer the trial-and error method. But their success only serves to highlight the general state of affairs. We see a public that wants innovations and is willing to pay for them. Yet before the Weasley twins open their shop, no new business has opened in Diagon Alley since Borgin & Burke's, many years before Harry Potter was born.
Thus, the Hogwarts education system, with its emphasis on practice rather than theory, seems to yield poor results. More importantly, it contradicts the goals of scientific education. The Hogwarts education system seems to belong to a different era, an era when people tended to rely on authorities rather than to look and search for new knowledge on their own initiative. The advantage of the scientific method over other methods for obtaining knowledge is that it emphasizes the systematic, empirical search for answers over various types of "why" and "how" questions. It was probably the change in the way people thought about obtaining knowledge that led to the industrial revolution and to the modern world.
The Hogwarts educational system thus departs sharply from the objectives of the modern education system. It seems to fail in providing its students with the tools that are necessary for inventing new technologies and innovations. As a consequence, the Wizarding economy lacks the ability to come up with the constant stream of innovations and new and fresh ideas that is required for sustaining technological progress.
But I guess this may be a similar case in the real world. For example, most education systems view skill at using computers as compulsory, but they do not require students to study how computers function. The same attitude is often found at the workplace as well, where the emphasis is on workers' ability to use rather than understand the machinery they work with. This leads students with future career opportunities in mind to choose more narrow technological studies at the expense of theoretical subjects.
Further underscoring the emphasis that Hogwarts gives to practical subject matters is the almost complete absence of classes in humanities and general knowledge from its curriculum. The wizards' teaching material includes only two subjects that seem to be purely theoretical, Arithmancy and History of Magic, and of these two, only History of Magic is obligatory. It appears, therefore, that students in the Wizarding world do not study arts, philosophy, or other purely theoretical subjects. The fact that wizards do not learn sciences explains why Arithmancy, which is Hogwarts' equivalent of mathematics, is redundant for most students; when one does not study sciences, it is unnecessary to study the language of the sciences, mathematics. This magnifies the effect of the narrow teaching curriculum, and may further explain why Hogwarts students lack the ability to think for themselves.
Another important question is the lack of classes in spoken foreign languages. In the Wizarding world, wizards should have little concern for distances when they do business. The books give ample examples of the ease of travel and communication in the wizards' society. Wizards can fly from one place to another on personal broomsticks, or they can use the Floo network, Portkeys, or transportation spells to move instantaneously from place to place. This absence of significant transportation cost should facilitate trade between wizards even from the most remote places. Consider for example the price of eggs: if wizards can travel at zero or low cost between any two points, and if the price of eggs is much lower in one place than another, then every wizard would shop at the place with the lower price.
The situation depicted in the books, however, does not indicate such an open market. Wizards interact with foreign wizards only rarely. Harry Potter and his friends do not meet foreign wizards until they go to the Quidditch World Cup Tournament in The Goblet of Fire, when they are almost fifteen years old. This initial interaction with foreigners is also marked with a series of misunderstandings. Ludo Bagman, who is in charge of the cooperation with official delegations from abroad, does not feel embarrassed to boast that he cannot communicate with his guests.
In addition to the lack of foreign languages skills, Hogwarts students are also unfamiliar with other nations' cultures and traditions. When foreign students arrive at Hogwarts in The Goblet of Fire, a feast is held in their honour. At the feast, French dishes are served, but many Hogwarts students pass on them because they are unfamiliar with the strange flavours, names, and appearances of the food. A similar kind of disrespect and lack of cultural knowledge is displayed by the visiting foreign students. French champion Fleur Delacour is keen to show the superiority of her nation's way of doing things, but her remarks in The Goblet of Fire that "we 'ad a different way of doing things. I think eet was better," often irritate her English hosts.
The mistrust between people of different nations is also demonstrated by the fact that one of the first tasks that Percy Weasley receives in the ministry of magic is to set regulations to stop the import of cauldrons because imported cauldrons are of a "low quality."
The same problem of distrust and misunderstandings also exists between wizards and other creatures. For example, when Harry Potter tries to negotiate with a goblin in The Deathly Hollows, he finds that the possibility of reaching a satisfactory contract is made complicated by his inability to understand the goblin's traditions and style of negotiations. This is an area that I should learn more about if I'm going to deal with goblins…
Therefore, negative sentiments towards foreigners are found both among average people, like the Weasleys, and public officials, like Bagman. In the Wizarding world, young people from different countries are unable to communicate with each other, and they only meet sporadically. When they do meet, it is in situations that encourage animosity rather than cooperation, such as the Quidditch World Cup and the Tri-wizard Tournament.
The Wizarding world shows that a lack of both the will and the ability to communicate with foreigners may be an important barrier to international flow of goods, services, and ideas. This is consistent with recent work by economists that suggests that trade patterns are often determined not only by objective characteristics such as profits and costs, but also by cultural aspects such as religion, history of conflicts, genetic similarities, and languages. A good example is the trade between Canada and the United States. Despite the fact that people from these two nations have a strong common heritage and speak the same language, they nevertheless trade with each other much less than the standard economic model would predict.
Therefore, lowering the costs of transportation and removing trade barriers such as tariffs might not be enough to promote international trade and investments. Insufficiently broad education and stereotypical beliefs may form barriers to international commerce and trade. The current Wizarding world suggests that international trade will not reach its full potential as long as people do not invest enough in studying foreign languages, culture and institutions.