Will Wilkinson - Latest Comments in The Supply-Side Consensus

Re: The Supply-Side Consensus

mk — Mon, 24 Sep 2007 05:03:10 -0000

Libertarians on philosophical principle ("freedom!") say the gov't should do little to solve societal problems.

Economists on pragmatic grounds ("efficiency!") say the gov't should do little to solve societal problems.

If the grounds of their beliefs are different, I am not sure you can infer that libertarians have the most economic literacy.

But overall I would allow that they probably do. Hypothesizing about why is difficult. Note that libertarians on average probably have a higher IQ than either conservatives or liberals. This in turn is a murky issue.

I would suggest that smart people have a psychological desire to signal their intelligence by doing unorthodox things. (I would even hypothesize that IQ partly measures not just raw aptitude but one's desire to signal intelligence). So smart people seek out some other intellectual turf, and that happens to be libertarianism. Now, nazism is "different turf" too, and they don't all become nazis, so there is something more than just "the desire to be different" going on here. But I think that's a significant part of it.

Economic literacy is a wonderful thing. Libertarianism is a fine thing. But correlation is not causation.

Re: The Supply-Side Consensus

John — Sat, 22 Sep 2007 19:19:37 -0000

LarryM,

Just to add an angle to all this:

I used to consider myself to be a moderate liberal until I started understanding economics.

I think just a basic understanding of economics STOPS people from committing silly thinking errors about socio-economic problems and issues. Staying on the correct side of this basic line eliminates so many fallacious notions about how the economy works on a most basic level.

Even mainstream economics who are not libertarian will agree more with libertarians on basic notions about economics and the economy than the laymen they sympathize with.

And, like William said, it's hard to use the word "libertarian" when talking about people because so many people who are somewhat warm to BASIC libertarian economic thinking and preferences do not call themselves libertarian.

I think if you put Brad Delong in a room with an ardent liberal activist and a libertarian and the three start discussing economics, I think it will go something like this:

Brad will charitably wince at a lot of the basic nonsense the liberal says and feel compelled to set him straight will leaving room for some point. He will then temper the libertarian with a lot of "yeah, but not so fast" because advanced economic theory questions a lot of the full implications of many basic assertions the libertarian will make.

Either way, Brad will find more economic embarrassment from a run of the mill Kossack than, say, a Tyler Cowen or a Bryan Caplan will with a Reasonoid.

Re: The Supply-Side Consensus

LarryM — Thu, 20 Sep 2007 12:20:03 -0000

I don't find much if anything to disagree this here. You are, of course, making a much weaker claim that Will was. Yeas, I realize that he wasn't TRYING to make a rigourous claim, but I guess I just don't see the point in such exaggerated snarkiness.

That being said, I think it's fari to say that one reason some liberals have more to be embarrassed about thatn libertarians is that liberal ideas have been tested to a much greater extent than have libertarian ideas. The political climate is such that, generally speaking, the relatively few libertarian ideas that get incorporated into policy making tend to be the best, most obviously correct ideas. The more controversial libertarian ideas tend to have more trouble getting traction, and thus remain untested.

Now I'm aware that there are counter examples, and plenty of research disecting those counter examples. But I don't think that anyone can seriously deny that libertairan ideas remain much less tested than liberal ideas. So libertarians have less to be embarrased about, in terms of their ideas being disproven, than do liberals, but that could well change if society moves strongly enough in a libertarian direction that libertarian policy prescriptions are widely adopted.

That being said, I suspect that libertarians are right about a LOT, which is why I'm moving in a left libertarian direction (and I'm still trying to figure out what the "left" aspect of that means in terms of policy preferences; reasonable minds differ. For one thing, it might make me less supportive of the government enforcing certain types of property rights). But I'm pessimistic enough to be reasonably certain that a more libertarian society, while better in many respects for everyone, including many of the less well off, would have some real costs. While I'm not one of the people who assume that libertarians "don't care" about some of the more powerless in our society, I do fear that a libertarian society would make many of those people worse off.

Of course that's not an ECONOMIC argument, but that's in part my point. By and large libertarians are not libertarians because they are more economically literate. They are libertarians because they have certain value preferences, in the firstt instance, and because they have certain beliefs about how government works IN PRACTICE as opposed to in some people's civics text books. The latter concern is certainly INFORMED BY economics, but isn't DETERMINED BY economics.

Re: The Supply-Side Consensus

William Newman — Thu, 20 Sep 2007 10:16:41 -0000

LarryM writes "It may be true (probably is true) that economic literate people are marginally more likely to become libertarians than are economically illiterate people, but that’s another matter, and doesn’t tell us much of value."

I think I could make a case that liberals have a bigger problem with swallowing camels than libertarians do. Granted, I don't know whether either the libertarian hoi polloi or the libertarian-ish politicos and activists are qualitatively better than their nonlibertarian counterparts. (For the hoi polloi, I don't know even know how to define the question: there is no useful consensus on how to decide whether a given voter should be considered libertarian. For the politicos and pundits, I grant that strong elements of libertarianism do not protect against silliness and cant.) But what about academics? It looks to me as the serious libertarian-ish academics of the past two generations have a pretty good claim to have gotten various important things right. Further, I think there's a pretty clear pattern that they avoided being confidently wildly incorrect as often as their more mainstream counterparts.

More correct is only partly synonymous with more economically literate. For someone who swallows camels to support his politics, it doesn't much matter much how economically literate he is. Paul Samuelson was no dummy, and no libertarian. And the mainstream academic economics community that made his intro textbook a bestseller wasn't illiterate or libertarian either. But I save my 1976 edition of that textbook as a reminder of various freaky things which I consider serious embarrassments to the left. E.g., charmingly quaint phrases like "a market economy enriched by government planning and macroeconomic control." (Will that attitude be on the test, professor?) And an asinine estimate of the performance and prospects of Communist economies. In that analysis, covering much of a chapter, my "favorite" asinine-even-without-hindsight bit was the assessment of USSR subjects' satisfaction with the system. Samuelson writes "It is a vulgar mistake to think that most people in Eastern Europe are miserable. Although it is undoubtedly true that few citizens of the West would trade their degree of economic comfort and political freedom for life in the Soviet, it is also true that a Soviet citizen thinks that he is living in a paradise in comparison with life in China or in earlier times." The chapter doesn't deign to mention the Soviet practice of building walls and minefields to keep them in. While the quoted sentence could be literally correct, it's still freaky. It's as though a history text assessed the attitudes of American slaves that way, "it is a vulgar mistake to think that most slaves were miserable...," without presenting evidence to support the assessment and without mentioning the amount of effort required to keep slaves from escaping.

I know libertarian academics have been accused of swallowing camels, too. E.g., I remember accusations that Milton Friedman, in lionizing Hong Kong's economic success, should have given credit to their high level of socialized housing. But it seems to me that the academic mainstream has more camel skeletons in the water closet than the libertarian-ish/pro-market academics do. I agree with Bruce Bartlett's first sentence, and I don't know of comparably important things where the marketeers got it wrong. Endorsing Limits to Growth (and lionizing Paul Ehrlich) were embarrassing too (not as a big problem for academic economists, I think, but a clear problem for mainstream academics in general). And today, I see howlers like Barbara Ehrenreich (not an academic, but an honored speaker on university campuses) reporting that the difficulty of the poor finding housing near work as "the market, stupid" without mentioning zoning (in her several-page treatment at the end of _Nickel and Dimed_, where for some reason owners of a lucrative trailer park don't convert it to higher-density housing, and homeowners no longer convert their houses to boarding houses as in every other historical novel I've read). Or Brad DeLong blaming high medical insurance costs on the "free market in health care," http://delong.typepad.com/sdj/2006/12/unclear_o... . If a libertarian had said "the free market in health care" shows that free markets spontaneously keep untrained quacks from practicing medicine and undercapitalized insurance companies from out of state from offering bogus coverage, it'd be ludicrous, and he'd be reminded of the high barriers to entry wisely erected by the benevolent state, right? those barriers may be wise, but in their presence it's silly to describe high costs as due to "free market."

Re: The Supply-Side Consensus

LarryM — Wed, 19 Sep 2007 18:24:16 -0000

This is from another thread, but I didn't want to derail that discussion, so I'll respond here ...

The "libertarians are economically literate liberals" comment by Will. I shouldn't let myself be provoked by what was surely meant to be a provocative comment, but bollocks to that. There are plenty of economically illiterate liberals, plenty of economically illiterate conservatives, and, heck, even plenty of economically literate libertarians (unless one believes that a crude, untutored "free market always good," constitutes economic literacy). But, what do you know, the majority of economically literate people still seem to avoid becoming libertarians. Now I'm more inclined to see this as a BAD thing as my own political views change, but none the less it's a fact.

It may be true (probably is true) that economic literate people are marginally more likely to become libertarians than are economically illiterate people, but that's another matter, and doesn't tell us much of value.

Re: The Supply-Side Consensus

LarryM — Wed, 19 Sep 2007 14:56:34 -0000

This is much better than your last post on the subject, but has a disappointing apples and oranges quality to it. It's one thing to argue that the consensus supports a move to lower marginal tax rates - that's true enough (though one might add that there is no such consensus as to precisely where those rates should be - to the extent that Lucas is saying that there was a "consenus" that Clinton era marginal rates were too high, he is simply wrong. To put it charitably) . It still leaves PLENTY of room for carping, by people of all political stripes, since a LOT more was going in in that time period aside from cuts in marginal tax rates, ESPECIALLY in the Bush administration. By people like ... Bruce Bartlett, who has been DEEPLY critical of the Bush tax cuts.

And, again, the annoying habit of ignoring the most salient critique from the left - the issue of marginal rates aside, a large tax cut in time of large deficits has little if any ECONOMIC rationale. Most honest supply-siders admit that. I find it stunning that, with all the verbiage that you've written on this subject, you've chosen to ignore that little issue.

And really there is nothing more annoying than a non-economist with incomplete knowledge on the subject lecturing others about economics. A bit more humility is in order.