The Big Divide in Economics

Greg Mankiw:

How do the right and left differ?, by Greg Mankiw:  The conclusion of today's ec 10 lecture: In today's lecture, I have discussed a number of reasons that right-leaning and left-leaning economists differ in their policy views, even though they share an intellectual framework for analysis. Here is a summary.

• The right sees large deadweight losses associated with taxation and, therefore, is worried about the growth of government as a share in the economy. The left sees smaller elasticities of supply and demand and, therefore, is less worried about the distortionary effect of taxes.
• The right sees externalities as an occasional market failure that calls for government intervention, but sees this as occasional exception to the general rule that markets lead to efficient allocations. The left sees externalities as more pervasive.
• The right sees competition as a pervasive feature of the economy and market power as typically limited both in magnitude and duration. The left sees large corporations with substantial degrees of monopoly power that need to be checked by active antitrust policy.
• The right sees people as largely rational, doing the best the can given the constraints they face. The left sees people making systematic errors and believe that it is the government role’s to protect people from their own mistakes.
• The right sees government as a terribly inefficient mechanism for allocating resources, subject to special-interest politics at best and rampant corruption at worst. The left sees government as the main institution that can counterbalance the effects of the all-too-powerful marketplace.
• There is one last issue that divides the right and the left—perhaps the most important one. That concerns the issue of income distribution. Is the market-based distribution of income fair or unfair, and if unfair, what should the government do about it? That is such a big topic that I will devote the entire next lecture to it.

Quick reaction: I wouldn't agree with the fourth reason. I believe people are rational maximizers in the economic arena, or at least well-modeled that way, though problems such as limited or asymmetric information can confound choices. On the fifth, I would not term a competitive market-place as too powerful. It's non-competitive markets, e.g. monopolies, that are the worry. On the sixth, fair or unfair depends upon how well markets are functioning. If you do not believe that markets are competitive, or that opportunity is equal, then the intervention and redistribution may be correcting the outcome toward what a perfectly competitive, equal opportunity system would produce rather than away from it. It's not that we don't believe that competitive markets are fair, though I can only speak for myself, it's that we don't believe markets that deviate from perfect competition in important ways, i.e. have important market failures,  produce outcomes that have defensible equity properties.

Update: Jim Divine at EconoSpeak comments further.

Comments

[paine]

short review

1
imagine the efficiency of extraction
from market outcome incomes and prices
is the key issue in public goods provision

2
the size and extent
of
externalities are
in the eye of the beholder

3
ditto
on market competition failure

4
no comment
plain shameless and ridiculous fuzz balling

5
is fine ..modified as follows
"The right sees government as a terribly inefficient mechanism for allocating resources, subject to special-interest politics at best and rampant corruption at worst. The left sees government the same way
but faces the fact government is often the only institution that can counterbalance the effects of the all-too-powerful corporations "

[dissent]

This notion of 'seeing people' and 'seeing government' seems dreadfully lacking in context, even vacuous.

The fact is that people and government and corporations are things whose characteristics and relations change depending on conditions.

I would focus on the role of corporate power and money in our democracy, and how that warps policy and harms the welfare of citizens. Issues like tax funded campaigns and restrictions on lobbying are inseparable from what government 'is' versus what corporations 'are'.

It is the political system that sets the boundaries. A huge part of the American problem is that the boundary between corporations and the government is so porous.

[Bernard Yomtov]

Mark nails it on the sixth point.

Mankiw puts his thumb rather heavily on the scale by talking about the "market-based distribution of income." Much of the complaint is, exactly as Mark points out, that it is not "market-based" in Mankiw's sense at all, and to the extent it is, serious opportunity inequalities have a major impact on market outcomes.

That said, I think that some redistribution, even under perfect market conditions, is desirable. There is nothing moral about letting people starve or freeze because they made bad or unlucky economic choices.

[Alex Tolley]

It might be better if both right and left got off their idealogical pedestals and actually looked at the data. Of the 6 reasons, the first 5 are subject to scientific analysis. The last is not, although it is potentially subject to analysis by reframing the question from "fairness" to that of how does income and wealth distribution impact the growth of the economy?

[W]

1) OK
2) I think global warming alone is enough to call "externalities pervasive."
3) As far as energy, communications, operating systems, pharmaceuticals... I'd say many industries are dominated by a few companies with significant market power. This is one that I think verifiably goes to the left if one actually bothers to check whether markets are competitive.
4) I think this is a straw man. I haven't actually heard anyone on the left say that people are irrational and need to me protected from themselves, even though the right claims this often. Those on the left argue for regulations because a perfect market requires perfect information. The average person can't understand sophisticated financial contracts (subprime mortgages), so regulation is needed to correct for the information problem. Its about information though, not rationality.
5) The right thinks government is inefficient, so they run inefficient governments. Give lucrative deals contractor deals for such ridiculous things as a $400 million dollar bridges to an island with 50 people. The left votes for efficient government.
6) Once again, I think this mischaracterizes the left's argument. Some on the left probably do advocate fairness, per se, but I, personally, am more concerned about utility: A BMW costs about as much as some life saving surgeries; If taxation takes a BMW away from a rich person and spends it on surgery for a poor one, I overall utility is increased, even if taxes create some "deadweight loss" in national accounts. Economists are supposed to care about utility, and I'm pretty sure a reasonable amount of taxation/redistribution increases utility, arguments about fairness aside.

[David]

I can only speak for myself, but as someone on the left I'd agree with the "spirit" of the 4th point. (as in I believe people make mistakes and government intervention to prevent those is beneficial)

Ask a young child if it would rather stay at home and play games than go to school. You'd not be surprised to hear that it would be a popular alternative, despite the long term downside. Of course we expect this from children, but adults? What would happen to school enrollment if it were not mandatory? I don't have any data on it, but I'd wager it would drop at least a little. If parents acted rationally, there would be no need for mandatory attendance.

In terms of finances, we only have to look at subprime lending. It appears a lot of people were tricked into the mortgage contracts, but at the same time they thought it would be a good idea to commit to something they had to know they couldn't afford. Many others knew what they were getting themselves into and thought they could beat the system. The government didn't step in and look at the fun we're having now.

Credit card debt, another wonderful example. Maybe we can generalize this and say people just have a high time preference, but I don't know if this has changed in recent times. (instinctively, I'd like to say yes)

Sure, we can argue that this is all their own fault. But in many cases the outcome is evident long before the downward spiral starts. Does it really do anyone any good to see these people struggle and/or fail? All so we can claim we're true to the principle of personal responsibility, no matter the cost? (and in some cases it may damage not just those individuals, but the entire economy)

In that regard I may certainly be further on the left than many. I don't think much of big government, but I do want to see it regulate the market to reward responsible and ethical conduct. If we're stuck with Ponzi schemes where the goal is to make as much money before it breaks down, that's quite a serious problem. Ponzi schemes, incidentally, are also illegal.

[James Killus]

Alex, you need to be clear about what "ideological high horses" means at this point in time.

On the left, it means a few powerless academics, trying to rouse themselves from near catatonic depression by focusing on the sheer horror of the ongoing world.

On the right, it means a massively funded propaganda machine, which is currently still in control of the important levers of media and government, and which is adding to the horror.

As I've indicated elsewhere, I'm getting mighty tired of people trying to be "evenhanded" in their criticisms, by always balancing a criticism of the right with a slam at the left. If nothing else, the left currently doesn't deserve that kind of attention. And, BTW, the Right is not against regulation as such; they simply want to load the dice for their own interests.

Also, just to be clear about #5, the Right views the susceptibility of government to special interests to be a feature, not a bug. There has never been a time when the Right was against any funding of their own special interests by government; they disagree with the Left about which special interests should be funded. The deliberate failure to acknowledge this is part of how it is now possible for "small government conservatives" to argue that GW Bush isn't a "real conservative" because he's presided over so much budgetary growth. Baloney. He's just handing out more patronage, which nary a one of them disagrees with when the vote comes on the floor. They just want all the spoils to go their way, and not someone else's.

Mankiw, as ever, simpy can't tell the difference between a libertarian and a conservative or between a philosophical position and a talking point. Or else he wants to propagate the talking points.

[Miguel Madeira]

"The right sees people as largely rational, doing the best the can given the constraints they face. The left sees people making systematic errors and believe that it is the government role’s to protect people from their own mistakes."

Usually, is the right who defends an independent central bank, a principle who have implicit the idea that voters are stupid

[bakho]

He left one out.

Right loves plutocracy.
Left promotes meritocracy.

[Jay]

"As far as energy, communications, operating systems, pharmaceuticals... I'd say many industries are dominated by a few companies with significant market power."

There is a common theme behind these industries. They all lobby hard for Congress to protect their monopoly power.

"The average person can't understand sophisticated financial contracts (subprime mortgages), so regulation is needed to correct for the information problem."

Well the nanny state that we've had for 70 years or so will dumb down people. Regulation to protect someone from themselves is a strong disincentive for one to engage in educating themself. The banking industry is relatively heavily regulated compared to other industries, so when people go to take out a loan, they have been conditioned to assume the government is looking out for them, so no need to spend personal resources understanding the contracts.

"The left votes for efficient government"

Sorry, I don't quite have the level of faith you must have to believe the democratic party does not respond to the ridiculous incentives our politicians have (like supporting bills with short term gains and huge long term losses just before an election year).

"I, personally, am more concerned about utility: A BMW costs about as much as some life saving surgeries; If taxation takes a BMW away from a rich person and spends it on surgery for a poor one, I overall utility is increased"

Might I remind you that chess players who can only look one move ahead frequently make terrible decisions. If you signal to a "rich person" that you will take his private property through a given mechanism, they will re-evalute their position and on the margin shift production around any new tax law.

[Robinia]

Rephrasing number 5: The right sees corruption as a problem affecting only governments, not private enterprises, and believes that market discipline and private virtue is the best enforcer of ethics; the left sees greed and unethical behavior as a pervasive problem in human societies, kept in check best by collective democratic action, expressed through union bargaining and governmental regulation and implemented through law enforcement.

[Lee A. Arnold]

I didn't think I was left or right, but golly, I may have to reconsider...

There is an industry that doesn't lobby Congress? The "nanny state" led people to make bad mortgage decisions? Banking is relatively heavily regulated? (And: according to whom?) People don't shift their activities around tax laws, in any case?

It would appear that another thing to add to Mr Mankiw's list is that "right" economists (surely this is not a "left" one) live in fantasy...

The REAL question for the rightwingers: should the new Fed "term auction facility" be used to bail-out the markets, or not?

[Fred]

By far the most important part of any society is the military. Don't think the military is important? Read your history books. Losing a war to a nasty enemy (think Nazis)dwarfs all other forms of disutility. It is rational for people to want to pay less taxes and get less military power as a ultimate result. Call that an externality if you want, though it seems to fit the spirit of Item #4. And that is the biggest failing of the Republicans ever since Reagan. No they haven't gutted the military, but they have gutted the manufacturing and R&D complex that ultimately underlies military spending. You can't fight a big war with lawyers and investment bankers and the other components of the modern finance/insurance/real-estate economy. Maybe there won't be any more big wars. But if you assume that war is a possibility, then this tendency to allow real industry and real science and technology to decline in favor of paper-pushing make-work is the really scary thing about Republicans.

[paine]

hurrrrah for tolleywood
writes:

" Of the 6 reasons, the first 5 are subject to scientific analysis. "
merely "subject to "
alexxxxx ???
or also
resolve-able by???

"well folks
i suggest after careful scientific analysis
we oughta be ruled by
a panel of dedicated selfless
truth finding ..... econo-stat whisperers

a rebirth of wizards
how lovely

"The last is not, although it is potentially subject to analysis by reframing the question from "fairness" to that of how does income and wealth distribution impact the growth of the economy?"

ah if only we lived in
the world according to mank

i'd get my come uppins

[nocountry]

This is a fascinating topic.

It seems to me that the left suffers from a collective form of confirmation bias in evaluating the effectiveness of governments in general.

If one is going to make an evidence-based judgment on the extent to which governments are likely to be effective as instruments for good going forward, one should look at all of the evidence. The sample must include George W. Bush as well as Bill Clinton, LBJ and Nixon as well as FDR.

Expanding the government's present ability to do good also expands its future ability to do harm.

Those on the left say, "if only MY guys were in power, they'd do a good job!" But your guys aren't going to stay in power forever. Believe it or not, people actually voted for George Bush!

[ndd]

Prof. Thoma, chorus:

Re Point 4: Tell me how subprime mortgages don't demonstrate that point.

[barry payne - economist]

Economists today are still sharply divided on the cause(s) and cure(s) of the Great Depression of 1929. Some will retrace the history of the New Deal as an essential role of government to pull the economy out of that depression while others continue to assert it made things worse.

Some economists are writing books on how the Rockefeller and Carnegie dynasties resulted in lower prices through their monopolies. John Lott, the economist who advocates concealed carry of guns, recently declared a statistical relationship exists between the beginning of a woman's right to vote and the start of growth in big government. He also asserts that attempts to regulate pharmaceuticals will kill people via denied drugs.

Recently, Robert Reich claimed that CEO pay needs to be as high as it is because the corporations they run are far more competitive in a global market than they used to be in the domestic market.

Similar differences are emerging in explanations of the declining housing and credit-derivative market by extension, ranging from "natural bubbles" by Greenspan to an out-of-control Fed and lack of regulation by others. Some lay the blame squarely on the borrowers for not educating themselves.

When serious center or left-of-center economists do appear on the scene, the irony is that many of them are trying to maintain competition by preventing more market concentration and maintaining transparency in the first place.

They usually fail, then the market starts failing, then they show up again, the second time recommending regulation to correct for the absence of competition not enforced the first time around. Not long after that, the industry develops influence over the expanded regulation suffient to reduce it to a perfunctory rubber stamp in many cases and the economists that tried to stop it all are left twisting in the wind.

[calmo]

I think James captures my nervousness about responding to this simple dichotomy, right or left. Something subversive about trusting this in the hands of Mankiw; something queer or straight about gathering a collection of views about this distinction, right or left. Of course I don't want to even smell "independent", but I would rather make this summation, right or left, after I've listened to the critter in question.
So don't punk me with "Leftie" --that doesn't begin to describe me, you know?
Ergo, don't expect me to smile on this exercise of finding some sufficient and necessary conditions to apply the labels, right/left...tis so Mankiw.
So many good comments in this thread, thank you all.

[nocountry]

With respect to number six: I'm not sure many on the economic right actually believe that the market distribution of wealth is fair. There is no reason it would be. Markets are value-neutral things that have no concept of human ideas of fairness.

The reason for suspicion of government attempts to redistribute wealth are twofold. First, doing so seems to retard growth. Whatever one may think of the relatively egalitarian societies of Europe and Japan, their systems seem to be slowly collapsing under the weight of economic stagnation.

Second, redistribution creates entrenched political beneficiaries. Already in the U.S. we have patronage systems on both the right and the left that are beyond the reach of the democratic process. On the right we call it the military; on the left, Social Security.

Incidentally, although the market doesn't promise an egalitarian outcome, over the last few decades it has been delivering just that. That is, if you are willing to look beyond our borders toward the poorest people in the world:

http://gregmankiw.blogspot.com/2006/06/war-on-poverty-is-being-won.html

I'm amazed how many on the left, who pride themselves on their superior morality, seem willing to check their compassion at the border. This may not apply to the economics-literate readers of this blog but certainly applies to many in the Democratic party.

says...

I'm amazed how many on the left, who pride themselves on their superior morality, seem willing to check their compassion at the border.

I'm amazed how many on the right, who pride themselves on their market acumen and amorality, seem willing to acquire morality and compassion once they get past the border.

Or could it just be that they would say and do anything to have access to a cheap, abundant and pliant labor force.

[James Killus]

I'll note to bakho that everyone, right, left, or center claims to be in favor of meritocracy. So then we're left with an argument about implementation, with the real issues being located in the details.

I've recently come to appreciate that the real alternative to aristocracy is bureaucracy, and, witnessing the bureaucratic pushback against some of Bush's excesses, I'm finding within myself a warm feeling toward bureaucrats. Part of the propaganda narrative that the Right has been pushing for the last umpteen decades is about how horrible bureaucrats are. Even the wealthy must deal with the IRS, and can't we seen how wrong that is?

There's also this telling bit of non-economic partisanship. I have yet to find anyone on the Right who had any problem whatsoever with de jure racial discrimination, back when the laws in question were state and local, and when they were directed at the descendants of slaves. Now, however, laws recognizing race are considered uniformly evil by the Right, de jure racial discrimination being a terrible, terrible thing when administered by the Federal government, and not uniformly in favor of white males.

I think that you'll find similar loopholes in every one of Mankiw's differences in economic philosophy. It's all about "what works" and what works for whom.

[Andrew]

"Whatever one may think of the relatively egalitarian societies of Europe and Japan, their systems seem to be slowly collapsing under the weight of economic stagnation."

I call shenanigans. The top 5-10 economies in Europe have higher productivity than the U.S., and the only reason that their GDP growth is slower is due to taking the increase in productivity in the form of leisure. And to nip any unemployment rate nonsense in the bud, the ECB's sole mandate is to keep inflation under 2%, while the Fed is responsible for also maintaining full employment. While ECB monetary policy is surely not the whole story in European unemployment rates, it is certainly a significant factor.

[Patricia Shannon]

It is well-established that people are not always rational. And if we were perfectly rational, it is impossible for us to have all the knowledge we need to judge the best actions in all areas of life, even if you only work 40 hours a week. We need to allow for that when making decisions about such things as government policies. The proper amount, if any, of government intervention in a particular area is going to depend on the specifics, including how damaging the consequences would be otherwise. Anybody who thinks that private industry should be able to build nuclear power plants where ever they want, with no inspection, is crazy.

[Lee A. Arnold]

What is the evidence that redistribution (except presumably at very high levels) retards growth? What is the evidence that Europe and Japan are collapsing? What is the evidence that the military and Social Security are patronage systems?

[calmo]

Nicely done James.
I'm done my harpooning today though and cannot bear the effort of returning to Mankiw's post and throwing darts at it.
Nope.
Have I let you know how partial I am to this guy bakho today?I'll note to bakho that everyone, right, left, or center claims to be in favor of meritocracy.Here too, he cuts it out of the muck: the right is righteous and will follow instructions to that end (parents ruling children --plutocracy, obedience, loyalty) while the left are contentious adults with competing instructions (tolerant, judicious, reasonable and intelligent --meritocracy).
Sorta following the caricature that right/left often is (but you reasonable and intelligent people will tolerate this, no?).
Something to be said too for central/decentralized decision procedures and that current politicized administration/any other democracy.
No, I am exhausted by right/left.

[M. Hodak]

"What is the evidence that redistribution (except presumably at very high levels) retards growth?"

Why is it that people who accept economic logic at the extremes refuse to believe that the same logic applies at the margins?

[Patrick]

Alex Tolley,

Six is no longer the same question on your way of putting it. One clue to this is that many people have endorsed lower economic growth (and some even economic contraction) in the name of fairness. Unless you accept the silly idea that only that which is now discussed by scientists qua scientists is worth spending time thinkng about, the question of fairness is a messy problem that is too important not to be dealt with.

Also, what reason do you, Alex Tolley, have to think that academic economists are not looking at the empirical data concerning these issues, or questions that fall under the rubric of these issues? It would seem to me that most econ papers I read can be related, in some straightforward way, to the disagreements above. And they are chock full of empirical evidence.

I worry that Thoma seems to be assuming a procedural account of fairness. In case my terminology is opaque (I am a philosophy PhD student, and our terminology usually is), a procedural account of fairness is one which says that a state of affairs is fair only because of features of the process which led to it, and not because of some disposition of the process to produce some independently specifiable state of affairs. This is a perfectly respectable position (Nozick would have accepted it), but it isn't the only acceptable one. It is not clear why the only thing that should matter is whether markets are competitive or not.

It may be that you did not mean to endorse such a claim, but rather were working with a non-procedural account of fairness and the assumption that only monopolies produce bad outcomes on whatever non-procedural account you are working with. If so, please forgive the wasted space.

[nocountry]

What is the evidence that redistribution (except presumably at very high levels) retards growth?

Deadweight cost of taxes. Distortion of incentives. Diversion of savings toward consumption.

What is the evidence that Europe and Japan are collapsing?

I did not say that Europe and Japan are collapsing, but that their welfare systems are. Perhaps "collapsing" is too strong a word. But of the major economies, Japan, Italy, and France have high debt/GDP ratios which have been expanding for many years and seem likely to continue to do so without reform.

Obviously, the systems of Japan and Europe are quite different from one another. But what they share are sets of policies that are widely recognized as unsustainable but are extremely difficult to reform because of entrenched interest groups.

What is the evidence that the military and Social Security are patronage systems?

Ever heard the phrase, "third rail of politics"? Whether or not Social Security needs to be reformed is irrelevant. It never could be, because such a powerful group of voters benefits from it directly.

[Bruce Wilder]

JK: "I'll note to bakho that everyone, right, left, or center claims to be in favor of meritocracy."

I don't think the Right favors meritocracy. The true conservative labors in favor of hereditary aristocracy. The Tory may confuse hereditary aristocracy with meritocracy, but confusion does not make meritocracy the conservative's desiderata.

It is a foolish liberal, who thinks everyone wants the good, but merely differs on the means to get to it.

[Bruce Wilder]

Alex Tolley: "Of the 6 reasons, the first 5 are subject to scientific analysis."

I, too, noticed how Mankiw framed this in terms of how people saw the world, factually.

If I were to write dichotomies, I would have stuck to preferences and values, as dispositive.

To be a conservative economist, in Mankiw's formulation, you have to be a fantasist, in active delusion about how the world works. Interesting.

[Lee A. Arnold]

"Deadweight cost of taxes. Distortion of incentives. Diversion of savings toward consumption."

Theoretical concerns are now entered as evidence? Why was there higher growth in the period of higher taxation in the post-WWII period, or during the Clinton years? Do you suppose there could be dynamic effects? Perhaps redistribution doesn't have much to do with growth one way or the other?

Patronage? Ever heard the phrase, "consult a dictionary?" The fact that someone benefits from something is not the definition of "patronage." Military spending and Social Security are, in two different ways, specifically NOT patronage.

[dug]

I, too, would rephrase bakho's dichotomy:

Left promotes meritocracy.
Right loves plutocracy on the grounds that it must be the meritocratic outcome.

The smart guys always get rich, you see, so the rich guys must be smart.

I am sure this suits Prof Mankiw's self-image very well.

[german_reader]

nocountry:

"The reason for suspicion of government attempts to redistribute wealth are twofold. First, doing so seems to retard growth. Whatever one may think of the relatively egalitarian societies of Europe and Japan, their systems seem to be slowly collapsing under the weight of economic stagnation."

Wow, that's a keen assertion. All available facts currently suggest that it's the American ( AngloSaxon ) model which is headed for collapse. The total debt level of Germany for example ( public and private ) is 60-70% of the US level ( despite an extremely expensive reunification ). Germany has a trade surplus which reaches 200 billion Euros this year ( $290 billion, would be equivalent of $1-1.3 trillion adjusted for population or GDP in the US ). The US have a trade deficit of around 700 billion.

Germany's international investment position ( foreign assets minus foreign liabilities ) is currently +700 billion euros ( +$1 trillion ), growing with a double digit rate every year . The international investment position of the US is -$2.5 trillion and eroding further. 82 million Germans export more ( goods ) than 303 million Americans or 1322 million Chinese ( until next year). And the employment level in Germany is currently nearly identical to US levels ( 40 million in a population of 82.4 million - 48.5%, US 146.7 million in a population of 303.4 million - 48.4%, civilian employment only ). Unemployment in the US actually stands at 8% measured with German standards - after more than 4 years of above average growth.

Our health care system consumes "only" less than 11% of GDP ( third most expensive in the world ) compared to 16% in the US, despite a much higher share of older people age 65 or above. Health care coverage of the population is nearly 100% ( US 84.5% ). And the poverty rate in Germany is a third lower than in the US, in absolute not relative values ( if you use the US poverty treshholds for Germany ). German middle class families have a similar standard of living as US families with 300-350 less working hours per year. And their per capita private debt is less than 50% of the US level.

I could go much further, but I don't want to trash Mark Thoma's website with needless numbers. In the last consequence it's a matter of belief if free markets or public intervention guarantee better results. I've never seen a conservative, who could be convinced with facts ( ok, may be a few ). But reality is that most of the European "welfare states" have much more balanced economies and societies than the US and most of them are quite sucessful in international competition.

What most conservatives don't understand is that lower growth rates which are more equally shared among the population, combined with lower debt levels and less ressource consumption can mean a better outcome for a society in the long run than higher growth rates which flow in the pockets of a few and are financed with excessive debt and the unbridled waste of natural and human ressources. The bill comes later.

And the simple ideologic opposition of free market versus public ( socialist ) solutions is as stupid as the stalinist version of communism in the former Soviet-Union was. There is no question of either/or. Sometimes free markets do a good job sometimes public solutions. It needs detailed discussion in every single case which way promises better results. And nearly all "sucessful" countries have a mix of both.

[James Killus]

I think that dug has found the pivot point. The American Right contains a mix of yearning for an aristocracy and yearning for a plutocracy. The Universal Solvant is then Social Darwinism, which says that the two are, in the long run, one and the same.

For those wishing for a real, hereditary aristocracy, the idea is simply that the patricians are better, by reason of birth, than the plebes, so there it is again.

In any case, notice the fog of argument that so easily attaches to "meritocracy." I know how to recognize both aristocracy and plutocracy, but how does one recognize a meritocracy? Even so seemingly rule based as organized sports have doping scandals, to say nothing of luck and favoritism.

No, I'm casting my vote for Bureaucracy. I commend the fine folks at NOAA and NCAR, for their dogged persistance in evaluating and publicizing global warming. I recognize that many in the judiciary (even Republicans) insist on an attempt at evenhandedness in the law. I even note that there are apparently U. S. Attorneys who were insufficiently "Bushie" to retain their political appointments, and that some in the CIA refuse to assist in yet another round of fraudulent warmongering. I believe that, ultimately, these are bularks of democracy and constitute the proper continuity of rightful authority in a free society, as opposed to a society in which a few at the top have freedom of action. Well, that's what they call it. The rest of us call it power.

[PrestoPundit]

Greg is wrong in this assumption:

"even though they share an intellectual framework for analysis"

A good many economists on the "right" have read Hayek and in important ways the "intellectual framework" these economists work within has been transformed by this reading -- read the first 15-20 pages of Milton Friedman's _Free To Choose_ and you'll see how Friedman thinks more like an "Austrian" than like a Chicago economist when he thinks of the power of the market economy. Ditto Thomas Sowell (see Sowell's _Knowledge and Decisions_ and note well that Sowell learned his Hayek directly from Friedman). Economist on the right who think through the lens of Hayek simple think in a different way about the market than do economists on the left.

Mankiw admits that he's read none of Hayek's economic work, so perhaps Mankiw's claims are true if he's only talking about himself. But it's certainly not true when you turn to the most important "free market" economists, such as those at George Mason (Buchanan, Smith, and all the GM bloggers).

[Lafayette]

Article: The right sees externalities as an occasional market failure that calls for government intervention, but sees this as occasional exception to the general rule that markets lead to efficient allocations. The left sees externalities as more pervasive.

I am amused by the employment of the word "sees" in Mankiw's text, as if the subjects were explainable in terms of points-of-view.

Thus, a Gini coefficient of the US (which is about the same as China) is just a "point-of-view", an opinion, a subjective "internality".

Sorry, GM, but I see that you may need corrective lenses. ;^)

[reason]

Bruce Wilder
I, too, noticed how Mankiw framed this in terms of how people saw the world, factually.
Well yes I read that, and then I wondered how he came to the conclusions he did - why isn't he a liberal? Surely 25 years since Reagan is enough to show he is wrong about elasticities. (Not to mention him ignoring the arguments made by Worthwhile Canadian Initiative - that the tax mix matters as well as its level). As for externalities - well I don't see how that can be objectively measured (and surely it INCREASES with income - the starving being less concerned about pollution). So economic growth is undermining his arguments.

And as for the fairness of the income distribution it is a red herring as W eloquently pointed out. Which brings me to my missing point, the left doesn't believe that GNP measures everything of value.

[reason]

I appreciate German Readers numerate answer to nocountries pontification, but he missed the main point. Different rates of population growth. Given the limits on world resources, maybe we need to find a way to live with lower population growth rates, so as Europe copes with their current issues they will point the way. I will say though, that 3% deficits (compared to what 8-9% ex SS surplus deficits in the US) on social security are manageable with relative small changes in benefits, given the wide base of beneficiaries. How the US will cope with its private and concentrated imdebtedness is another story.

[reason]

As for point 4, I would just point out that addiction is a problem and should not be ignored. I don't believe that all adults are equally competent in dealing with the world. What should be done about that is not always something that I'm clear about however.

[reason]

I love this:
The right sees government as a terribly inefficient mechanism for allocating resources, subject to special-interest politics at best and rampant corruption at worst.

I mean clearly that Ferrari there is CLEARLY the most efficient way to use that iron, leather, rubber and petrol! Depends rather what you mean by efficient doesn't it? As W says - W-E-L-F-A-R-E. Efficiency in consumption as well as production.

[paine]

i failed to comment on mank's final point
because greg-o
with a savy craft
has not yet
laid out his cards
face up

but since it conveniently excises the toilsome
sweat and sorrow filled grapple over
state based
redividing of the pie shares
it does allow us to focus on
pure efficiency dimensions
ie
the use of hierarchy
to lace together public pathways to social welfare improvers
public pathways mind you
not associative private pathways
ie
co-ercive pathways

the coase fantasy
of a third party frought world
able still
to run on strict
individual "voluntarist "mechanisms
thru indefinite periods of "recontracting "
and such

well
eden on earth
is prolly
out there waiting for us to find the way there
in the between time
i suspect "legitimate force "
will play its usual grumpy
to hideously grim role

[paine]

"addiction is a problem and should not be ignored. I don't believe that all adults are equally competent in dealing with the world. "

my addiction

AN EVER INTERNALIZED PRODUCT OF MY OWN ACTIONS

pass on the external effects
like my need of help
my harm to others

imagine i merely waste away

to prevent this
to step in nurse ratchetwise
to save me from myself...
that is where
if its by lawful state action
to prevent harm not to
a third party or parties
but to prevent
my harm to myself
in those cases
state action
becomes action against an internalization
not an externalization

the state acting
for the benefit of the party of the first part ...ME

nanny states done ratchet state

now that do cross a line eh ??

when they try to help ME ....
even comrade I
red paine herself
will reach for my R....

[Philos]

Lee A. Arnold makes an important point:

"Theoretical concerns are now entered as evidence? Why was there higher growth in the period of higher taxation in the post-WWII period, or during the Clinton years?"

Although I sometimes think it should be rephrased to: "Theological concerns..."

And equal opportunity? Perhaps in the Gamma Quadrant.

[bakho]

In the US of A, our government is “We the people”. Once that concept is clearly understood, then the “government” that GM describes is really the obligations that individuals have to the collective society.

1. The advocates for the poor see critical needs of the society going unmet. These unmet needs are a huge drag on the economy and taxation is necessary to meet these needs including infrastructure and job training. GM focuses on the “deadweight” taxation losses to the individual and ignores the opportunity cost of failure to adequately develop infrastructure and workforce.

2. The rich-right (which controls much of the economy) benefits from proceses that create many of the externalities. The wealthy can use their wealth to escape some of the worst externalities (living in polluted neighborhoods, for instance). In cases where their wealth won't buy them refuge, the right supports rules to fix exernalities. There is broad support for pollution control and environmental standards across the board from left to right. Right wing gun owners like to hunt and fish in unpolluted areas. Right wing yacht owners support clean water legislation to protect their marinas from burning down (see Cleveland).

3. Competition exists in some instances and monopoly rules in others. This is not a left-right issue. The right is much more comfortable with monopolies and rules that allow them to thrive than is the left. Most monopolies are stalwarts and supporters of the right.

4. Both the right and the left believe that people act rationally. The right believes that everyone has access to the same information and lack of information is the fault of the individual. The left KNOWS that individuals often lack both information and the resources to obtain it. The right is content to use their wealth to gain knowledge in an asymmetric fashion that they can use to do better in the system. The left focus on populations with limited individual resources that must be pooled in order to pay the cost of gathering the information. The consequences are also different. The right has the power and resources to sue the charlatans and con-men. For many of the poor, the legal costs outweigh possible returns.

5. All resources are allocated by government either directly (which is GM’s complaint) or indirectly through the set of rules governing economic transactions (which GM and many on the right totally ignore). (We the people) make the rules that govern economic transactions. Government enforces “property rights”. Government maintains records. GM wants to focus only on that subset of the rules that reallocate wealth and ignore the elephant in the room that is the IMPERFECT set of rules that favor some individuals over others. The right uses their wealth and power to make the rules even more imperfect and favorable to their own interests and fights off attempts to correct (reallocate income) distortions created by the imperfect rules they have championed.

6. All distribution of income is determined either indirectly through the imperfect set of rules that govern economic transactions or indirectly as redistribution to correct for flaws (or they may be features) in the rules. Having spent time and money to influence the rules to favor themselves, the right objects to having rules about redistribution that are more fair.

Most importantly, the right is not bothered by the idea of (and sometimes promotes) haves and have nots in society. The right fails to see how income disparity contributes to numerous societal problems and are content with treating the symptoms (building gated communities and more prisons) rather than addressing the root issue of maximizing human potential. The right is more concerned with making a limited set of individuals within a society better off and leaves the common good (the primary focus of the left) to vagaries of "trickle down".

[skeptonomist]

"I believe people are rational maximizers in the economic arena, or at least well-modeled that way...".

People do tend to react rationally according to their expectations, but their expectations are often irrational, conditioned by mass psychology. If the mass or general expectation is that risk is negligible, there will be a boom, and if the expectation is of high risk, there will be a bust. Individuals do not and can not (I think this is well known) make a rational evaluation of the general degree of risk or the direction of the economy. The problem of boom/bust is not how people behave according to expectations, but how expectations are formed. The general expectation is most definitely not the sum of individual rational evaluations.

[baileyman]

And for what reason does anyone devote any time to what Mankiw says?

[paine]

"And for what reason does anyone devote any time to what Mankiw says?'

he's a missing link
albeit diabolical

he connects brains
to the corporations band wagon

[Patricia Shannon]

skeptonomist - well said, I tried to say that, but did not express it as well as you.

[Don]

This may sound terribly naive--hopefully Paine can pen a poem for my pain--but the thing that attracted me to economics lo those many years ago as an undergraduate was that it attempted to explain human behavior rationally, using the scientific method to ascertain truths about how humans behaved, not about how they should behave.

But in this post-modern world in which we live, there are no truths, only opinions. GM is wise to inform his students of the disputes among left and right leaning economists. On both sides, statistics are tortured to confession. In the meantime, very little truth about the choices humans make in light of scarce economic resources is revealed.

Just as there should be no such thing as a left-leaning or right-leaning molecular biologists(do the carbon, nitrogen, oxygen, hydrogen, etc atoms that make up a living cell believe that nucleus should excite their electrons, or that it should come from electron excitation undertaken of their own free will?), neither should a profession that asserts itself to be concerned with making positive observations about human nature have left- or right-wing practitioners.

But it does, and it bodes ill for understanding objective truths about the behavior of human beings, if in fact there are any. If there aren't, and economics is really just political philosophies dressed up in scientific clothes, then this all seems just a waste of time, so far as truth-garnering goes.

But please Paine, a poem to lift me out of this despair....

[paine]

"so far as truth-garnering goes "

notice time has a future of indefinite duration
maybe the soul cell
known to himself as don
may not be around
for the later acts of this human comedy
acts where doubtless
all todays conflicts
will come unknotted

my guess
whatever
the tragic gordian social snarl
one happen to view
around us today
some soul cells some time ahead
---even ones the unit self called don
might cotton to-----
will live to see and be in on
such unbinding acts

[paine]

"a profession that asserts itself to be concerned with making positive observations about human nature have left- or right-wing practitioners."

human nature
or natures
in the aggregate
subject to
and object of
morphment by for and of humans
both producer and product
of a specific heterogenious
socialization process
i'll start by saying

the science of that
baring big fruit soon ??

what looks
like a task beyond the dimensions
of mortal souls

leaves slim reason for personal hope

this pursuit
is either not a science at all
for humans
but an arena for competing magic tricks
or
it is a science in fact
but
one fit only for
angels and devils

[Don]

"...now I see but a poor reflection as in a mirror; then we shall see face to face. Now I know in part; then I shall know fully..." (St. Paul's first letter to the Corinthians)

Thanks, Paine...between you and the Saint, my soul cell muddles along.

[Alex Tolley]

Wow, I finally got an inclusion in a paine response.

JK - when I talk of ideology, I mean the use of assumed POVs rather than the results of analysis. I have always liked the term "reality based community", which I have always taken to mean a community that uses science to determine positions.

Patrick: "Unless you accept the silly idea that only that which is now discussed by scientists qua scientists is worth spending time thinkng about, the question of fairness is a messy problem that is too important not to be dealt with."

It is not a "silly idea" and in general I do think that unless there is a rational basis for discriminating between ideas, discussion is pointless. Religion is a case in point. Ideas that once seemed out of the realm of science are now being successfully tackled, all to the better in my mind. As to your assertion that I may not be aware that economists are tackling Mankiew's points with analysis, au contraire. It is these studies that I prefer to look at, not the dichotomous POVs as listed.

[hari]

It's amazing how an academic (economic) profession has become not only undistinguishable from politicians; but so terribly polarized in US.

I was shocked to follow a recent blog in which the basic discussion was what "label" was relevant for those who propagate free trade/globalization and those who find problems with the global trend.

In our days, academics didn't allow themselves to involve in on-going political or ideological discourse. They more or less kept it within their domestic confines.

Now, every tom, dick, and harry, is a socalled "expert" on almost everything under discussion - irrespective of their peers and whatnots.

What has become of academic moderation and/or neurtality?
These left/right discussion - in US academic blogs! - is the worst stupid nonsense I've seen!

[Nicolas]

Mankiw: "The right sees government as a terribly inefficient mechanism for allocating resources, subject to special-interest politics at best and rampant corruption at worst."

The US government is indeed corrupted, most certainly since Bush is in power. Many poor countries are even worse. But Nordic countries have very transparent and accountable governments. It depends on the set of institutions and the state of development.

Also, after Enron and Worldcom, I don't think the private sector is clean either.

[jefff]

As others have noted by 'right' he clearly means 'economic-libertarian right'. Most of the American right loves government spending, they just want it to go to some different things (eg war, prisons, spying, certain kinds of industrial policy, subsidizing automobiles).

1)
More simply and generally the right thinks government spending is less beneficial and taxation is more harmful than the left. Both believe in distortion as proven by the propensity of both attempt to use distortion effects of taxation to change behavior be it a CO2 tax or a lower capital gains tax.

2)
Reasonably accurate, though some of the far economic right think externalities should be dealt with through lawsuits and never government and they also just like to pretend they don't exist (eg global warming) so they don't have to think about possible solutions.

3)
More generally the right thinks that a higher level of market perfection can be achieved and that less governmental intervention is required to achieve the highest possible level. The left thinks that a less perfect market is achievable and that the most perfect market occurs with more government intervention.

4)
Nonsense. The right thinks some people are extremely rational, informed, far sighted, etc in the narrow area of economic choice and the rest are hopeless and rightly doomed to failure and misery. They also think most people are extremely irrational, ill-informed, short sighted, etc in the area of political choice. That is part of why they think government intervention is mostly bad. The left (at this historical moment in the US) thinks that at least a significant minority of the population is not particularly rational, informed, far sighted, etc in either sphere and that those people do not necessarily 'deserve' failure and misery and even more their children don't deserve it.

5)
This is basically a subset of #1. Also as others have mentioned the left isn't worried just about market forces, but about non-market capitalist forces like monopoly power, information asymmetry, and luck of birth.

6)
The right comes at this question of fairness in a way that doesn't make for much meaningful debate. On the right the system of relatively unfettered market capitalism is assumed to be the ideal system and therefore the level of inequality which results from it is fair. They will never come up with a level of inequality they think is acceptable and see if the system achieves it. Instead the level of inequality which is acceptable is a result of implementing the preferred system.

Perhaps a better distinction is that the left talks about both fairness and wealth, while the right talks only about wealth.

The left also tends to talk about medians and quintiles while the right tends to talk about averages and totals.

Or even more simply the left cares much more about distribution than the right.

[Nicolas]

hari: "What has become of academic moderation and/or neurtality?
These left/right discussion - in US academic blogs! - is the worst stupid nonsense I've seen!"

If we lived in an Ivory tower, fine. But as serious thinkers, I think it is a social duty for accademics to adress political issues. Their judgment is not perfect on every issue, but it is much better than "every tom, dick, and harry" who have no clue what they are talking about (while often being paid to report only one side of the story).

[Patricia Shannon]

I really get tired of the accusation that liberals love government regulation, high taxes, etc. What we want is is to improve and maintain the social good for all, not just a privilaged few, and we know that the only way to do this in some cases is through government and taxes.

[Patrick]

Alex,

I want to make sure that you are not confusing two different positions:
1) Anything that scientists qua scientists, could not discuss now is not worth discussing at all.
and
2) A discourse which it is impossible that science will ever be able to talk about is one that should be abandoned.

(2) is not silly at all, but it has almost no bite at all. The potential domain of science is extensive, since science seems to just be the application of rational standards of belief and inference to empirical matters. (2) is also a principle about which intelligent people disagree.

(1) is extremely silly. Childish even. It seems to amount to the view that if some discussion cannot be easily settled, or if you cannot be assured ahead of time that someone will demonstrate without doubt that the other person is wrong, it is pointless to discuss who is right at all. It might be that someone who accepts (1) takes discussion to be inherently adversarial, which is silly and immature. It might also be that a proponent of (1) doesn't think any belief you cannot demonstrate to be true beyond any doubt is not a belief worth having. This leads very quickly to solipsism, which is a rather childish approach to the world. The problem with childish beliefs is that those who hold them (usually but not always children) lack the resources to see that the beliefs are silly, but if they are young you can hope that natural maturation process will take care of their silliness.

Working with a principle of charitable interpretation, I will assume that you actually endorse (2). I suppose I have a substantive disagreement with you about whether one can scientifically discuss 'fairness', at least on the broad conception of science I am working with. Certainly one can discuss moral questions rationally, just pick up some philosophy journals. If you think that ethics cannot be an empirical discipline, then I would disagree again. I think it can be as empirical as any of the softer sciences like psychology or economics. So I am not sure where I disagree with you, but I am assuming you aren't adopting the sophmoric (1).

[STS]

Bruce Wilder:

"The true conservative labors in favor of hereditary aristocracy... It is a foolish liberal, who thinks everyone wants the good, but merely differs on the means to get to it."

Well said. I would add that all of us are conflicted about two kinds of good: good for us and good for our children. We want both to *get* ahead (by merit if necessary) and to *stay* ahead by conferring advantages on our children.

What scholarship graduate of Princeton doesn't reflect gratefully on the advantage their 'legacy' will confer on the kids?

[BJ Feng]

"Most importantly, the right is not bothered by the idea of (and sometimes promotes) haves and have nots in society. The right fails to see how income disparity contributes to numerous societal problems and are content with treating the symptoms (building gated communities and more prisons) rather than addressing the root issue of maximizing human potential. The right is more concerned with making a limited set of individuals within a society better off and leaves the common good (the primary focus of the left) to vagaries of 'trickle down'."

One thing that should be understood is that the Right believes most of the "solutions" are worse than the problem. Income inequality isn't good, but the fixes are much worse and do more harm to society than allowing some measure of income inequality as long as decent opportunity still exists. Absolute income inequality just isn't possible without destroying the economy and liberty to boot. Just take a look at Venezuela right now, and Chavez hasn't even gotten all his policies passed yet. There are degrees of course, but tradeoffs exist. It's no secret why we're the richest nation on Earth and our poor are considered upper middle class when compared to the average person. Our poor are only poor when compared to our rich, and I'd rather have it that way then our poor considered poor relative to the average person living today.

As for politics and leftist thought, economic professors are limited by the science of economics itself. Much as physics professors are limited by their science even if they believe in a creator, as Einstein did. Simply, there has to be evidence that distortionary taxes and regulations produce enough gains to offset the losses. Sure it can be argued, but there is a limit.

[James Killus]

Ah, now there is the nub of a problem, Alex and Don.

Science does what science does, and it does it very well, better, utimately than what even the greatest scientist could do on his own, and way better than the run of the mill scientist. But science is not the only "reality based" discipline, and there are many aspects of reality that science does not address, nor can it without altering the nature of the entities under discussion.

So to scientific method (the phrase "the scientific method" is foolish; there is no single method of science, and I can go on and on about that, but that is another discussion) we add scholarly method, which is a necessity for the study of history and history in the making. Similarly, there are perfectly sensible "reality-based" methods of artistic and literary criticism. That these do not lead to a unitary view of reality is part of their charm, and part of their utility. Some aspects of reality are not unitary. Nevertheless, factual statements can be made that are not "scientific" statements. For example, Whistler was not a Surrealist, nor was Degas a Cubist though his work influenced the Cubists. You can kill a vampire by fire, cutting off its head, or driving a stake through its heart, despite the fact that vampires do not exist. Slans were not a natural product of evolution, and John Galt was some sort of mind controlling mutant. All of these things may be successfully argued in ways that flimsier propositions may not. That science does not concern itself with such things is neither a diminishment of science nor of history, art, and literature.

I'll also mention that there are indeed "left leaning molecular biologists." They are the ones doing research on the molecular biology of stem cells. The "right leaning" ones use animals. That neither of these groups would necessarily self-identify as right or left leaning isn't tht relevant. These days, it would seem that one's political label is for others to decide. I can come up with no other method of determination that results in Clinton being a "liberal" for example, and I've lost count of the number of times recently that some conservative or another has told me that Bush isn't really one of their own.

[skeptonomist]

Mankiw's points might be better titled "How the left and right might be said to differ if they were both entirely devoted to the common good". Of course their actual attitudes are not unselfish, so the differences are not really a matter of different preferences in technical economics. As long as there is economic inequality there will probably be classes, and class considerations will influence economic thought.

[btgraff]

If people were rational, they would never join the military, especially in time of war (better to be a mercenary, or stay home rather than risk death or injury for a pittance). Jane Jacobs "Systems of Survival" has some interesting answers on this.

Have the right wingers ever heard of the 7 deadly sins, as well as a bunch of lesser ones. People are motivated or constrained by all sorts of things - lack of information, imperfect knowledge, sex drives, varying degrees of intelligence, wishful thinking, religious doctrines, prejudices, stupidity, short term thinking, etc.

[hari]

May I suggest a insane assylum might be a better forum for left/right discourse!

[robertdfeinman]

For some reason I keep returning to psychological arguments. I've cited the work on the authoritarian personality type before.

So, this time I'm going to postulate the "ideological" type. These days, in the US, this type usually has a conservative or libertarian view of the world, but it has not always been so. During the 1930's-1950's we had the "old left".

The characteristic that I've been noticing that they all share in common is that their ideological "truisms" are fully internalized and they do not realize that these ideas are part of an ideology. So, saying that people are inherently rational or irrational, good or evil, generous or greedy are all such instances.

Ideologues have a blind spot, they don't see their ideology as an ideology. Things that are blindingly obvious to them are seen as unsupported assumptions by others. This blindness means that trying to discuss the policies that flow from the assumptions is fruitless. If you don't recognize your assumptions as being subject to examination then nothing said about your conclusions makes any sense to you.

These days the left tends to be less ideologically blind than the right.

[Bruce Wilder]

rdf: "These days the left tends to be less ideologically blind than the right."

And, moderates seem to have divided, as well.

To get to the broad middle of the political spectrum, you can be paying attention to complex reality, uncertainty and the inevitable trade-offs, or you can simply triangulate among opposing points of view, to arrive at the middle-of-the-playing-field.

It seems to me that the reality-based moderates in American politics have been radicalized by the course of events, while the David Broders have just gone merrily along, endorsing conservative politicians and right-wing projects, while maintaining a stylized moderation of voice and an insistence on symmetry between the Parties.

I don't know what happened to the historical radical Left -- New or Old. They just seem to have faded away with scarcely a trace left behind. I will venture the hypothesis that the Radical Left -- the Communists and Socialists and Anarchists and other idealistic revolutionaries -- were a product of the intransigence and unassailable power of the Reactionary Right. The Left formed as a reaction to the Reactionaries, if you will: Utopian goals to motivate violence or endure violence, as violence was necessary to overthrow the existing corrupt and oppressive order: think 1848-1945. If your enemies hold power, and make themselves immune to reasoned moral suasion, then the only alternative is to kill them.

Immunity to reason seems to me to be a key dynamic in the psychology driving political division. Ideology is just a means of formalizing an immunity to reason, but it is the immunity to reason, which proves itself powerful in the game of politics, more powerful for its tactical utility than persuasive reason.

Democracies are founded on a faith in the power of persuasive reason to arrive at policies, which will further the common interest. The Left, the advocates of democracy, are always advocates of Reason, while the Right, at best, remains skeptical of reason, and, at worst, actively opposes Reason and rationality.

Every point of view comes with a blind spot; the point-of-view metaphor highlights that aspect of human judgment and experience. Ideology comes with something more, a rigidity, a loyalty. The core of an ideology is not its particular tenets, or the arguments that string those tenets together, but, rather, the personal identification with the ideology and what follows from the identification: willingness to follow and obey, on the one hand, and the almost Pavlovian defensive reaction to criticism or contrary opinion. Ideology is authoritarian, and serves the need to motivate imperative organization and concerted, even violent, action.

[Lafayette]

AT: I mean the use of assumed POVs rather than the results of analysis. I have always liked the term "reality based community", which I have always taken to mean a community that uses science to determine positions.

No patents on truth

Assumed POVs are often arrived at empirically. They are no less valid than scientifically arrived-at viewpoints. They are also not necessarily subjective, but often have the appearance of such -- because of the way they are presented.

We have each our own "reality" and it is worthwhile discussing our differences in forums such as this one. But, no one -- as of yet -- has a patent on THEIR particular reality as the undeniable truth, or best possible option.

For instance, the US has not one tenth the experience in delivering Public Services to a wide range of individuals -- from lower- to middle-class -- as Europe does. But, I doubt any American can appreciate that "truth" unless they've lived in Europe and experienced it first hand. (Try it, you'll like it. ;^)

First, however, America needs the courage to try it. And, given the malarkey seen from the current lot of Dem presidential candidates, Americans are not about to get it either.

This bunch is "Business as usual". All they want is their turn at the White House levers of governance. There is not one who is a declared "Agent For Change", because each fears that the change necessary will scare the hell out of the electorate.

So, its the same pap for the masses being pitched (at a monstrous cost of money that is otherwise being wasted).

In fact, the verbal attacks and insinuations amongst them are a mindless effort to look "less evil". Huckabee is on a roll with his Evangelical Politics and the Dems don't know whether they should elect the first female president or the first black President -- as if that made one helluva lot of difference.

What a circus, devoid of attention to what matters: How this nation generates wealth and how it distributes it.

Washington must be rolling over in his grave.

[Patricia Shannon]

I would say John Edwards wants to be an agent for change, which is why the MSM is against him.

[Patricia Shannon]

One big factor in human irrationality is the fact that once most people have a belief, they will ignore overwhelming evidence that it is wrong, and latch on to any little fact that they can twist around to "prove" they are right.

[Lafayette]

PS: One big factor in human irrationality is the fact that once most people have a belief

Cry, I suppose

Yes, 'tis true ... disbelief is a common trait of ours, particularly when a situation becomes disastrously bad. It is the flip side of credulity when times are unbelievably good, which is also a current cultural phenomenon nowadays.

It is the opposite of an unfounded belief that "nothing can go wrong", when times are too good.

History has taught us however that life and particularly economic times are both cyclic. What goes up must necessarily come down.

Governments have tried to dampen the highs and lows, but not with all that much success. Recessions are not as deep as they once were, because governments understand better the usage of both fiscal and monetary policy to turn them around. We are in just such a phase in the US.

But, we remain our own worst enemy. The problems that afflict the US are of our own making, we can blame no on else. Particularly the sub-prime mess and that of Iraq with its squandering of precious resources.

Neither should we point the finger at anyone else for the Income Inequality that plagues the US. Its solution is simple: Raise marginal income taxes on upper income. Spend the proceeds not on high-tech "toys-for-our-boys", but reformation of the basics (skills, education, housing, infrastructure, ecology).

When will we ever learn that WE (Americans) cannot have it all, all the time, and whenever we want. It is not physically possible, like the sun rotating around the earth.

But, if people want to believe that making megabucks like some celebrity-star is the "tops", what can you do when such gullibility grips a population (and especially its youth)?

Cry, I suppose.

It is so distinctly disconnected from reality.

[Michele]

Me and a co-author have recently completed a paper on the analysis of economists’ disagreement and of its determinants.

http://micdimaio.googlepages.com/DeBenedictisDiMaio2008-Economistsvie.pdf

As a case study we took the Italian profession and we measured Italian economists' disagreement about : 1) the cause of the difficulties of the Italian economy; 2) which are the most effective policy proposals to solve the economy's problems.

Then we relate the respondent's opinion on each specific policy proposal to her individual characteristics, academic profile, methodological approach and political opinions.

We find that the political view of the respondent matters a lot in explaining difference in the judgement of a policy proposal but which aspect of her political view matters most depends on how much controversial the policy proposal is.

We have also prepared a website for additional documentation on the survey - the questionnaire, other descriptive statistics, etc.. The link is:

http://micdimaio.googlepages.com/surveyofitalianeconomists

No need to say, whatever comments or suggestion is more than welcome.

Ciao,
michele