That's an honest question. I consider myself both, but it's also obvious from the way people use the term that different people think of it differently (somewhat like the issue with the term "classical liberal"). Recently some commenter (I think maybe Bob Murphy) used "free market economists" in a way that was clearly meant to exclude my sort of economist, and it was a little odd to read. And here, Jonathan Catalan refers to his "pro-market" response to me. He doesn't come out and call me "anti-market", but again it gives the impression that he has something specific in mind about why his response was "pro-market". What makes someone "pro-market" or a "free market economist"???
Let me pose my puzzlement this way:
- If you refused to give your child food unless they were able to exchange something acceptable for the food, would that make you more "pro-market" than someone who just gives their child food?
- What about respect for elders? Waiters and waitresses are paid to compose themselves in a certain way around customers as a part of their labor market transaction with the restaurant owner. If you require your elders to pay you before you act respectful towards them, does that make you more "pro-market" than if you don't?
- Or of course that most essentialist of human activities: sex. Is a patron of prostitutes more "pro-market" than someone who never transacts for sex in his life?
Why is it that "pro-market" has come to mean "thinking that the market is the appropriate institution for decision making"? Of course these examples are extreme, but they're meant to illustrate the point (so I want to be careful not to detract from that point because of the sheer extremity of the examples): why is it that an economist is more of a "free market economist" if he proposes that more things be done using the market than another economist? Why is Rothbard often considered more a "free market economist" than Friedman? It seems like an odd way of using the term to me. Clearly there ought to be a line somewhere. If you think markets are rubbish and should be used only on the rarest of occassions it doesn't seem sensible to refer to you as "pro-market". But even aside from that concern, the use of the term seems to be absurd.
It's a focused absurdity, though. You won't hear libertarians accuse people of not being pro-market because they give food to their children rather than selling it to them. You'll only really hear it with respect to the government. Under that formulation it's easier to understand why you hear nonsense like "Paul Krugman isn't a free market economist". In plain English, that's a bizarre sentence. But when "free market" means "when there is a choice between government and the market, use the market" it becomes more sensible. Krugman acknowledges a role for government, after all, as do I.
Anyway - it's just a very strange, very unique way of talking about things and sometimes I get the impression people who talk this way don't realize how weird it sounds - not only do they disagree with my points here on a cerebral level, but it actually seems normal to them too.
Some on the left don't help the situation. Joe Stiglitz frequently uses "free market economists" to be synonymous with "libertarians" too, and it bothers me to no end. But for the most part this sort of talk is fairly restricted to libertarians themselves.
To me, the market is just an institution and a particular way of making decisions. I think the market is fantastic, but it's not the only institution and it's not the only way of making decisions and in certain cases it's not the best way of making decisions. It seems weird to me that simply acknowledging that has the potential to invalidate me as "pro-market" or a "free market economist" in some people's eyes. I don't normally think of myself as "pro-government" because in almost every situation I can think of the government is much less than ideal - it's just sometimes the best available option. It's not the same way with markets for me. There are lots of situations where the market isn't just the best available option - it's a really, really great option. So saying I'm "pro-market" makes more sense.
Maybe I'm misreading people and people do consider me and Krugman and most other economists in the U.S. to be "free market economists". But I don't think the people who use that phrase on a regular basis would acknowledge us.
For the Weekend...
3 hours ago