Friday, January 25, 2013

Casey Mulligan and Political Economy

The seminar I talked about in the last post was held by the philosophy, politics, and economics group, so naturally a lot of the questions were political economy related. Someone asked Mulligan why he thought these safety net policies were passed in the first place, given how negative they are (negative according to Mulligan of course, not me).

His response deserves a post all its own. I was floored (1.) that he gave this response and (2.) that no one challenged him on it.

He said that we have these increasingly generous safety net policies because the "elites" on the "right tail of the income distribution" (his words) feel good about themselves when they give a generous safety net to the poor. He said the amount of money involved is small enough that it doesn't matter to them and they increase the generosity and they feel better about themselves for doing it.

If I had not come in late I might have spoken up when he said that, but I felt like enough of an interloper already between coming in late, it not being in my own department, and the general hostility towards Keynesianism. Plus I'm sure I would have addressed it in an entirely inappropriate way, like "are you shitting me?" or "is it April Fool's Day already?".

That was by far and away the most absurd thing I heard during the whole seminar: low income families are screwed by the safety net because rich people are just too generous and want to use their power to redistribute money to low income families.

I know I'm elaborating on my interpretation of it in the last two paragraphs, but if anyone that was there (Peter Boettke, Bryan Caplan, Pete Leeson, Chris Coyne, Virgil Storr, Harrison Searles, probably others) wants to challenge my account of what he said in the third paragraph, feel free to. I was jotting down notes during the seminar so I think it's pretty faithful.


  1. If the elites support welfare for the poor it is only because they fear the alternative is being dragged from their beds by a mob and murdered in the middle of the night.

    The right has become increasing hostile to helping the poor in lock step as the perceived threat of communism has receded.

  2. Laugh all you want, but Smith, Ricardo, James Mill, and most of the early "modern" economists made similar assertions about the dastardly "Poor Laws" and benevolent aid to the poor. This crowd even went so far as to actively discourage wealthy people from donating to charity:

    1. Right, but the determinants of late 18th/early 19th century social policy are very different from the determinants of 20th and 21st century social policy! Quite a bit happened in between!

      I haven't said rich people have never advocated social policy.

      I haven't said rich people today don't advocate social policy.

      I'm saying that the reason why we have the safety net we have today is not because of the demands of the right tail of the income distribution.

      Even Pete Boettke told me he didn't buy that argument (as an explanation of the safety net today).

    2. Yeah, that is indeed a stretch, and really takes to an extreme the insulting idea that lies behind arguments like Mulligan's (that poor people are poor because they're lazy, bad people, and rich people are rich because they're really good).

      I don't think that the Poor Laws were necessarily motivated by the benevolence of wealthy Tories. By mercantilists' reasoning, payments to the unemployed would shore up food prices and thus rents, and so keep the income stream of landlords secure (this was the the constituency of the Tory party that supported these measures, after all). This would be consistent with their rationales for supporting inflation and monopolies.


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