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Tuesday, March 16, 2010

"Hayek Propped Up by Government Intervention"

Justin Wolfers hoists the Texas Board of Education by their own Hayek. Or something like that:

Hayek Propped Up by Government Intervention, by Justin Wolfers: Sunday’s New York Times reported on attempts by the Texas Board of Education to rewrite the high school curriculum in accordance with its conservative values. While there’s always an element of ideology involved in economics—my personal beliefs shape what I choose to research— I regard my job as generating truths. I’m interested in either generating facts which have the virtue of being true, or theoretical frameworks to better help us understand those facts. So I find the raw ideological force exerted by these “educators” to be both striking and dispiriting.
How do they plan to rewrite high school economics? In economics, the revisions add Milton Friedman and Friedrich von Hayek, two champions of free-market economic theory, to the usual list of economists to be studied – economists like Adam Smith, Karl Marx and John Maynard Keynes.
Taking social science seriously surely means teaching the insights of the most prominent, most important, or most influential economists. ... There’s no doubt about the influence of Smith, Marx and Keynes; Friedman also belongs. But does Hayek belong on this list?
Let’s use data to inform this debate. I counted the number of references to each economist in the scholarly literature indexed by JSTOR, finding 30,708 articles mentioning “Adam Smith”; 25,626 articles mentioning “Karl Marx”; and 4,945 mentioning “John Maynard Keynes” (the middle name was required to avoid articles by his father, John Neville Keynes). “Milton Friedman” sits easily with this group, and was mentioned in 8,924 articles.

But searching for “Friedrich von Hayek” only yielded 398 articles; adding “Friedrich Hayek” raised his total to 1242 mentions; also allowing “FH Hayek” raised his count to 1561. [Note: a broader search updates the count to 1745, but that doesn't change any of the conclusions.]

By the way, “Lawrence Summers” was mentioned 1712 times, adding “Larry Summers” raises his score to 1972 mentions; and also including “LH Summers” raises his score to 2064. ...
These data suggests that Hayek just doesn’t belong with Smith, Marx, Keynes, or Friedman. In fact, it seems that despite having enjoyed a much longer period to accumulate citations, he is still much less widely cited than Larry Summers. Sure, Hayek was an insightful economist. But insisting that high schools teach Hayek is a clear statement of ideology, not of economic science.

The message from the Texas Board of Education seems to be: If you can’t win in the marketplace of ideas, turn to government institutions to prop you up. I don’t think Hayek would approve.

William easterly responds:

Defending My Homeboy Hayek from Freakonomics, by William Easterly: Justin Wolfers has an amusing Freakonomics piece describing how anti-government conservatives are trying to use state intervention to get the anti-statist Friedrich Hayek taught in high school economics classes. Wolfers is completely right that this episode exposes the hypocrisy of these intellectual censors.

(My favorite Mark Twain quote: “In the first place God made idiots. This was for practice. Then he made School Boards.”)

But after that Wolfers goes astray, piling on Hayek as just intellectually unworthy in general. Wolfers uses shaky exercises like number of citations in electronic academic journal archives. He says Larry Summers has as many citations as Hayek...

Young Wolfers may not know the history of censorship of Hayek in the other direction. When I was in graduate school in The Middle Ages, Hayek was seen as so Far Right that you would be considered a nut to read him.

Since then, many more economists have realized that was extremely unfair to Hayek, including guess who, Larry Summers:

What’s the single most important thing to learn from an economics course today? What I tried to leave my students with is the view that the invisible hand is more powerful than the [un]hidden hand. Things will happen in well-organized efforts without direction, controls, plans. That’s the consensus among economists. That’s the Hayek legacy.[1]

Hayek, who once wrote an essay called “Why I am not a conservative” was prescient in appreciating something that is much more trendy today, the idea of “spontaneous order” (Silicon Valley geeks write about a book a week on some aspect of the Internet being a spontaneous order.) My favorite Hayek quote gives a lot of insight into why development has been so hard to engineer from the top down:

It is because every individual knows so little and… because we rarely know which of us knows best that we trust the independent and competitive efforts of many to induce the emergence of what we shall want when we see it.

This reliance on individual spontaneity and creativity (and here we could include political entrepreneurs who achieve new and better ways to deliver public goods) is threatening to two very specific political factions:

  • the Right
  • the Left

Hayek knew that the Right was hypocritical about individual rights as much as the Left. The latter dictates what you can’t do in the market, the former wants to dictate almost everything else. ...

It’s sad that Hayek has been the victim of so many violations of the intellectual freedom for which he was one of the most eloquent and courageous spokesmen ever. ...

I am going to resist the temptation to get myself in trouble and simply note that one way to address this question is to ask about the opportunity cost -- the highest valued economist left off the list -- and whether or not that economist is more deserving than Hayek. Ignoring the advice I just gave myself, I'm not sure I would choose Hayek even if I was only allowed to pick from economists known for their conservative viewpoints. David Ricardo comes to mind.

    Posted by on Tuesday, March 16, 2010 at 12:21 AM in Economics, Politics | Permalink  Comments (91)


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