Saturday, May 14, 2011

Libertarians aren't as economically enlightened as liberals

How likely do you think it is that this follow up paper by Buturovic and Klein will make the Wall Street Journal and sweep the blogosphere the way their first paper with the opposite headline did?

Of course the correct conclusion from this paper ought to be not only that my title to this post is wrong, but the first headline (that libertarians are better at economics) is wrong too. The correct conclusion is that everyone can do badly depending on the question, and in this particular paper libertarians and conservatives did badly.

I still think there are a few outstanding problems with this paper - I still think they're failing to differentiate between what people actually know and the way they answer the question (i.e. - seeing it normatively or positively). It's a misnomer to say they're looking at "enlightenment" at all. Many of these people may be perfectly enlightened, but also sentimental. They also stick to their guns on the interpretation of the "right" answer to these questions - some of which have been highly suspect.

But every study has empriical pitfalls that it will never be able to answer completely. The important thing is that you tailor the extent of your claims to those imperfections. If you have a shaky study you don't blare out a bizarre conclusion. "Libertarians are better at economics" should never have passed the smell test and it says something about the circles that the authors move in that it did pass the smell test. That study and this follow up may not be perfect, but they at least eliminate that claim.

Hopefully there is equal buzz about this finding, but I'm not optimistic.


  1. I happen to agree with you on this and looking at the questions from the first one seemed like something anyone who's taken econ 101 should agree with.

  2. Daniel, could you clarify on your objections regarding positive and normative answers? I'm having difficulty seeing how that distinction could have possibly confused the answers people gave. For example, the question "Restrictions on housing development make housing less affordable." I literally do not understand what it would mean to give a normative answer to that question.

    I can see potential for ambiguity in the question about the standard of living being "better," because that's a subjective concept. One might argue that 30 years ago, there was less income inequality, and that is a "better" standard of living. I don't find that persuasive, but it's a coherent normative position.

  3. First of all, Daniel, I think Americans are one of the most confirmation bias ridden people in the world. Hopefully, you will forgive me for saying so. ;)

    Recently, a "study" was conducted to "prove" that New York Times writers such as Maureen Dowd and David Brooks were better predictors of the future than were other op-ed writers. And the study bluntly wrote that it proves there was hence a connection between the two. This was not a study, and it was done for pure political posturing.

    I feel the same way about a study that claims that conservatives know better economics than progressives or whatever. It's also pure political posturing. I feel the same way about a study that now tries to claim that all are equally bad. Again pure political posturing.

    Anyway, did you know that despite all the time I spend on websites dominated by either religious ultra-traditionalists, or radical polemics of Counterpunch, or otherwise free market economics social spheres, and despite my general agreements with all of them on many things, online polls and quizzes tag me as a "centrist" or a "moderate"? I am amazed I am not called a radical. How on earth is one such as I a moderate? :)

    Much the same way, how do they decide who is a conservative or a progressive or whatever? For all we know, some of the people polled as progressives may end up actually calling themselves conservatives or vice versa.

  4. In this, and when you first brought up the original article last year, the biggest thing that shocked me was that a professor wrote this piece. As Prateek says quite well... this sort of thing is obviously ideological and pretty sophomoric. I'd (unfortunately) expect it from pundits, but not from people up against peer review, tenure committees, etc. (as much as the general public thinks that academia is thick with ideology... it really isn't to the extent of the wider public discourse in the U.S.).

    Is the guy who wrote the article a well-regarded economist, or is he more of a fringe character? I suppose it's a bit unfair to ask that in public... of course you don't want to be rude and speak poorly of someone outside of a more professional critique of their work as you offered in your response article last year. Nonetheless... it's the question that comes to my mind immediately, and I imagine I'm not alone in that.

  5. Evan those same thoughts came through my mind as I was perusing the link and happened to click one of their profiles by accident and discover that their ideology could have played a role in their results.

    What surprised me more was that the paper was able to get published into a professional peer reviewed journal. Without knowing much the authors themselves I shouldn't assume much.

  6. I suspect libertarians are better at economics than both conservatives and progressives on average. It's not something I have thought about much and these studies do not alter my thinking one way or the other. It is just my general observation that people become libertarian after becoming interested in economics; there are some exceptions (including yourself). Libertarians are also more likely to give economic reasons why they support or oppose different policies. Even when a particular libertarian's arguments are wrong, they usually require some knowledge of economics to make in the first place.

    In any case, economics is one of those strange things that people often get more wrong the more they know about it.

  7. Not to be mean, but the majority of libertarians are econo-illiterate as the rest of them. The blogosphere is just disproportionately represented (we know that liberal bloggers are a sample of a much larger population, but we don't really know the size of the population that libertarian bloggers form a sample of).

  8. I don't think it is a mean suggestion, Jonathan.

    When people credit rise in international commodity prices to increase in monetary base rather than fall in production, as some libertarians do, they are trying to use rise in prices as a political tool rather than as a piece of information to be analysed. Either that is a sign of economic illiteracy or a sign of a libertarian economist deliberately ignoring economics.

    Similarly, when Paul Krugman suggested that recent financial innovations are not socially useful, he was giving a value judgment and not an economics-based analysis, because he wanted to use the assertion as a political tool for financial reform. Actually, Paul Krugman is smart enough to know this, and I suspect that either he wrote it as such deliberately, or that his colleague and column co-writer Robin Wells vetoed and added that section there.

    And I don't even intend to make false equivalence. Paul Krugman is often analytical and value-free, unless it comes to matters of class and "income inequality" (wherein he gets some confirmation bias.) Some Austrians like William L. Anderson are likely to be a little more sober where Krugman is shrill, but bear a lot of confirmation bias on issues of inflation, government spending, deficits, and other issues that happen to involve government.

    All in all, Krugman is much further away from the general progressive population, as far as views on globalization and international trade are concerned. Anderson is much closer to political libertarians and less willing to contradict core libertarian ideas when they involve a more serious look at economics.

    Daniel, do you agree?

  9. 1. Octahedron (first comment) - in some ways I suspect these sort of things change with the amount of economic education too. Econ 101 certainly gives people an advantage over the general population in "thinking like an economist", as any introductory course in any field would provide. But it also inspires more confidence in market efficiency than is warranted, and econ 201, econ 301, econ 401, etc. start to disabuse you of that. This stands out most starkly with the minimum wage question. In econ 101 there is only one answer to that question. By the end of it all you're a little hesitant to confirm anything and you know that the empirical evidence has major positive and negative finding and the center of gravity of those effects is only very modestly negative. Real life is complicated, and it would be a shame to brand that as "unenlightened".

    2. Kevin - first, I think it depends on the question. Maybe that question was less sentimentalizable (the authors hoped most were). Some of these are more susceptible. The minimum wage point, again. "Free trade leads to unemployment" was bad in this regard too. I'm not exactly sure why that answer is so clear one way or another myself, but cognizance of concentrated unemployment (steel, cars) can certainly lead a sentimental liberal who knows perfectly well how markets work to suspect some unemployment might result.

    3. Prateek - I think confirmation bias is pretty rampant, but I'm not sure Americans are uniquely guilty of it (could this be confirmation bias on your part?!). I am glad you also think the idea that economics enlightenment is correlated with ideology doesn't make much sense. I was a little shocked at the first paper precisely because it sounded so wrong I would have thought they would have held back and looked into it a little more. I'm often a centrist too on these tests, although I really feel like I ought to be. Those things are just a summation of scores on specific questions - in other words, a radical in several directions averages out to a moderate. Go figure.

    4. Lee - I'm not sure why libertarians need economics to make their arguments. Could you explain? I will agree that knowledge of economics makes people appreciate market efficiency more than it otherwise would. This predisposes people to more fully embrace the liberal tradition. It provides insights that moves people from pre-modern prejudices into liberalism. But appreciating markets makes you no more predisposed to be a progressive, a conservative, or a libertarian. All have strong pro-market traditions despite the fact that members may not always live up to those traditions.

    5. Jonathan - I agree and I hope that's the message of this second paper. Not my somewhat facetious title that libertarians are less economically literate, but that (1.) wide swaths of the population are economically illiterate, (2.) illiteracy cuts across ideoloy, and (3.) these questions are pretty bad ones for getting at that, but at least they're somewhat indicative.

  10. Evan -
    OK, I need to approach this carefully because I've got important differences of opinion with the authors and the community they're a part of, but I also think a critique has to be mindful of what they're trying to do.

    The authors are Zeljka Buturovic, a psychologist that works at Zogby, and Daniel Klein, an economist at George Mason. Both are libertarians. Klein is the editor of the online journal that both of these articles (and my response) came out in. It is peer reviewed. I don't know all the reviewers, but a disproportionate share are libertarians as well (and I suspect many that I don't know are too). I also suspect that the ones I know do the heavy lifting on the reviews. I don't think this is without consequence, I want to be clear. If I were a reviewer and I received the first paper and it were anonymous (hell, even if it weren't anonymous) I would have advised it not be published. I think the reviewers of that paper probably thought it seemed reasonable. But I think this is more an issue of confirmation bias, and the role of the journal than it is a more blatant problem.

    So what do I mean by "the role of the journal"? The journal identifies itself as "classical liberal" (code for "libertarian"), and it's best to think of it as a combo online journal that operates as a (1.) somewhat heterodox ombudsman for other economics journals, (2.) public opinion journal, and (3.) libertarian review outlet. The second point is particularly important - this thing with polling people and breaking positions down by ideology is very common in this journal. So it's best not to think of it as an economics journal that did this weird piece on an ideology poll. It actually does more polling-type pieces than it does traditional economics. They've noted in their call for papers that they want non-libertarian papers. I think libertarians at George Mason were just the driving force when it was started up, and they just haven't had success in diversifying too much. I've been trying to think of articles that would be appropriate to the tenor of the journal (this more accessible, "what do people think about economics", ombudsmanish approach) but would not be so clearly ideological. So far I haven't come up with anything that's truly worth pursuing, but we'll see.

    George Mason itself has a strong dedication to more accessible publication records. Often I think that amounts to proselytizing to a certain extent, but the fact remains that they like their professors to publish in accessible outlets. A fair amount of them are libertarian as well, so this certainly wouldn't hurt Klein on that front.

  11. Daniel, I think there's something to be said for the fact that a British public intellectual like Keynes (his friends Robbins, Kaldor,.etc) changed positions frequently in life. And look at a few continentals, on the other hand. Hayek was an ex-Fabian Socialist, who realized that his dream of a social commonwealth was not feasible. Bohm Bauwerk was a former protectionist. The Soviet authors of The Turning Point had great admiration for market economies and a sense of resigned admission with problems of the Soviet economy. I have also been impressed by the fact that many of the Indian statesmen calling for public sector disinvestment are the exact ones who once called for nationalising those very businesses.

    None of this changes the fact that US currently produces the world's largest stock of the most distinguished economists.

    However, I feel that American economists can go decades without ever changing their minds. A monetarist like Friedman (who still changed his mind from his former New Dealer stance) never accepted that monetarist ideas, in actual practice, were troublesome and caused a new set of problems in US and UK. John Kenneth Galbraith believed that General Motors would eventually create a sellers market and near monopoly in automobiles. But he lived long enough to see GM falter, and still didn't change his mind about The New Industrial State.

  12. I just recently asked the person I worked with at the WSJ if they'd like an op-ed based on the new study, and I hope they go for it. Seventeen questions, however, makes if very cumbersome.

    I would be happy to do an op-ed or magazine piece -- if anyone out there can connect the dots for me. I'm at I don't have a blog, so I don't have a way of broadcasting the interest myself.

  13. That's great Prof. Klein - I do hope they take it. I enjoyed the paper and thought you framed it well in the context of the previous paper.

  14. "It provides insights that moves people from pre-modern prejudices into liberalism."

    Or, perhaps, provides biases that move people from pre-modern sense into liberal prejudices!

    (I actually think it does some of BOTH, but I do think it's good to check the automatic assumption that what's happening is the former!)

  15. Interesting.

    Makes me wonder who the "libertarians" were. The libertarian percentage incorrect suggests the presence of paleo-conservative tea-party types being classified as "libertarians"...a classification I don't find accurate. The immigration and abortion questions shows this quite well. Few true-blue classical liberal libertarians would get those wrong. The more paleo-conservative wing of "Ron Paul types" would.

    In any event, I got them all right. The two that almost tripped me up were on Drugs and Guns. But I paused on the wording so as to remind myself that reducing access is true (generically speaking)....though misleading because access is not reduced ENOUGH to make the policy correct. But REDUCING access is nonetheless correct. But liberals and libertarians think alike on the drug general. So a libertarian like me has to wonder who these libertarians were.

  16. Evan,

    "I'd (unfortunately) expect it from pundits, but not from people up against peer review, tenure committees, etc. (as much as the general public thinks that academia is thick with ideology... it really isn't to the extent of the wider public discourse in the U.S.)."

    When Larry Summers posited that women MAY be underrepresented at the top in science because female I.Q. MAY be less variable than male, he lost his position and was met with female academics who got the vapors (read the article.) Normal people can have that conversation because they're not as stuck in liberal ideology.

    The wider public is at least willing to discuss difficult ideas which Haidt has shown Sociologists, et al are too liberal to do:


    The key to all of these surveys is defensive polling. The questions are never exacting enough to satisfy all readers, so the reasonable way to respond to the questions is to defend one's biases.

    13. Gun-control laws fail to reduce people’s access to guns.
    • Unenlightened: Agree

    As a 2nd Amendmentite, I look at this question and say, "which people?" Mexico has highly restrictive gun laws yet the mega-gangs have military grade weapons. Many American gang members can't legally even own guns, yet they carry concealed. Is this question asking whether law-abiding people will not buy guns if it's illegal? The answer to that question is obvious. Does it address whether liberal gun laws seem designed to give law breakers an advantage? So: Agree.

    The key to this study is that (like Economics) it's not an example of real science, but squishy nonsense.


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