Sunday, May 18, 2014

An Addendum to Noah Smith: On Libertarians

Noah has a nice post debunking popular assumptions that economists are ideological cheerleaders. Instead, Smith says, they are not necessarily conservative professionally (of course some are), empirically oriented, and more engineering-minded. This is an important point for him to make, I think.

But there's another group that I think gets modern economics wrong. It's a smaller group, but a vocal one and a growing one: libertarians.

If you ask a libertarian about modern economics they'll often - though not always - respond in the way that this commenter did at David Henderson's post on Noah. It's sort of the exact opposite of the people who consider economists to be free market priests mixing philosophy with economics and it's pervasive in the libertarian community among economists and non-economists alike (which in a way is the saddest part). Here's a selection:
"Since at least the time of the Kathedersozialisten, criticism of markets by "economists" has been what has served the social function of the Medieval clergy: as sources of "truth" to provide a rational for the power of the State. Along with intellectuals more generally."
I'm sure most readers have heard a version of that before. Hell, some readers I'm sure have asserted a version of that before. It's the trump card they play every time a real economic scientist ever wants to try to understand a friction or asymmetry in human social behavior - either (a.) you're anti-market! or (b.) you're trying to justify the state moving in! The reality is that almost no economists are anti-market. Libertarians who make this claim only come to that conclusion because they think they only way to be market oriented is to share their political views. Another reality is that most economists care a whole lot more about economic science than politics. That's why we're economists and not political scientists or political journalists.

Take the minimum wage. I've formed pretty solid views on the empirical work on the minimum wage and where I think the gaps are in the empirical work. My views on the politics of the minimum wage aren't nearly as solid. I've said in the past that I don't lose sleep over the minimum wage because of the empirical work, but at the same time I have trouble enthusiastically supporting an increase (particularly at the federal level) because it seems like such a blunt tool and it's possible it could hurt certain people when it seems to me we have better ways of helping everyone. You just don't see me jumping into that fight. You will see me jump into discussions about the economics of the minimum wage (as I did earlier this spring).

Often, when I come across libertarians that think most economics is a justification for the state, they'll assume my scientific views imply a political perspective. And it's not surprising that they do - few people think about government and politics as much as libertarians.

Sometimes I get pretty heated on politics and policy. The stimulus debate and the ultimate fiscal austerity were big enough problems that I enthusiastically jumped in. The government pay freeze and shut-down infuriated me because of its stupidity and the way it was hurting regular families in an even more direct way than austerity generally. When my wife works herself like crazy at a federal job where they don't get sufficient staff to support her work because of a hiring freeze, sufficient compensation because of a pay freeze, when she with her fellow public employees are trash-talked by libertarian and conservative pundits, and then on top of that we have concerns about job security because of a stupid shut-down that should have never happened, it makes me angry.

But to a large extent that's Daniel Kuehn the citizen, not Daniel Kuehn the economist. The most I jump into politics/policy as an economist is in evaluating federal programs, which I've done a fair amount of. I tell them if what they're doing works or doesn't work. This is policy relevant to be sure, but I am not spinning some kind of justification for the state much less criticizing the market. I also don't know what the answer to the question "does what you are doing work?" will be before I do the analysis, so none of my results can be construed as an attempt to justify the state.

Nevertheless, if you are a modern economist and you are not a libertarian this is the sort of crap you'll have to deal with on a regular basis if you spend any time talking to libertarians.

15 comments:

  1. http://faculty.chicagobooth.edu/luigi.zingales/papers/research/Preventing_Economists_Capture.pdf

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    1. I am only able to skim - looks good, thanks. I was a little curious about the journal test he looked at. So QJE, AER etc. are more "pro-business" he says but isn't another reasonable solution that these journals have higher standards, take the higher quality analyses, and those produce findings he classifies as "pro-business". Perhaps he clarifies this in a part he misses. I mean, if QJE and AER don't publish higher quality pubs it would be strange, wouldn't it? And why would we care so much about the papers that get published there?

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  2. Daniel, why do you always blur the lines between the positive and the normative? I swear, every time you write about libertarianism, you always forget that it is a normative philosophy. Now don't get me wrong, many libertarians do this, too--which is sort of what you're talking about here--but there's no reason that you should do the same.

    In fact, since I'm on the subject, you recently were discussing Bastiat and how he would (might) be more aligned with libertarians than modern liberals (this I believe to be correct). Brad DeLong was involved in that discussion and tried to show that Bastiat supported what would presumably be issues that a modern liberal would support. But there was something that you both missed: DeLong was using one of Bastiat's positive analyses (That Which is Seen and that Which is Unseen) to claim that Bastiat would support a normative philosophy (modern liberalism).

    This is bad reasoning by somebody who is supposed to be a professional, and what is worse is that DeLong had an air of arrogant criticism toward those who object to his opinion--and surely it was nothing more than an opinion of his, a wrong one at that--when he asks, "Why don't more people read Bastiat?" in an earlier blog post he made on the same subject (and using the same quotes). Well I've read plenty of Bastiat and I'm glad that DeLong has, too. But apparently DeLong is not philosophically astute enough to know what it is that he was reading, because if he wanted to know what Bastiat's normative position is, all he had to do was read *The Law*.

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    1. And BTW, I am well aware that in this post you are claiming that you do in fact separate the positive from the normative. I call BS on that.

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    2. You might want to give an example - I'm not sure what you're talking about. Libertarianism is normative as far as I know, but there are obviously positive corollaries to normative claims. Indeed, I think the existence of these corollaries is part of the reason why people make the mistake that Noah highlights and that I'm highlighting.

      That Which is Seen and That Which is Unseen is a mix of positive and normative claims.

      I didn't notice any arrogance and I held the view he was criticizing! DeLong is plenty astute, philosophically and otherwise. I'd be careful about making too many assumptions along those lines.

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    3. re: "I call BS on that."

      And I call BS on you. No, scratch that - I just disagree with you (I call BS on people that I think are bullshitting me and I don't think that's what you're doing). Some specifics on what you're concerned about in this post might help.

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    4. Look, Daniel has an anti-libertarian hobby horse. They are a nice foil by which Daniel can define himself. I'd just leave it at that and ignore anything he has to say about libertarians.

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    5. Wait a second...."DeLong had an air of arrogant criticism toward those who object to his opinion".....WHAT?! I will not hear of it

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  3. How do you differentiate between "the economist" and "the citizen?" It is something I struggle with when reading others writing and my own.

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  4. Let me suggest (as Adam Smith would) self-evaluation is the least useful sort of evaluation one can engage in.

    "Noah has a nice post debunking popular assumptions that economists are ideological cheerleaders."

    And Noah Smith clearly doesn't understand how the cognitive prejudices of people work.

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  5. Anyway, since you introduced it...

    "When my wife works herself like crazy at a federal job where they don't get sufficient staff to support her work because of a hiring freeze, sufficient compensation because of a pay freeze, when she with her fellow public employees are trash-talked by libertarian and conservative pundits, and then on top of that we have concerns about job security because of a stupid shut-down that should have never happened, it makes me angry."

    It makes you angry that your wife has to work with the same sorts of anxieties (which I think are on the whole good) that people in the private sector have to deal with?

    Now frankly I have no desire to pay your wife's salary. As I recall she works for the DoD and I'd gut that organization (which is one of the most poorly run in the federal bureaucracy from a standpoint of cost controls, transparency in budget, etc.). It is after all MY MONEY that goes to this organization and I ought to have some sort of say (even if it merely symbolic, as it surely is for most people) in how it operates (mostly to the detriment to me and my own).

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    1. Not the same anxieties that private sector workers have to deal with. And they have their own anxieties to, of course.

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  6. I work in the private sector, and pay and hiring freezes are the norm depending on quarterly performance (indeed, opening positions is not done at even my local units discretion, our home office is the ultimate decision maker on that point as it is on all sorts of policy, etc. questions). And of course there is no such thing as job security. My job is as secure as my last day's performance (and that's the way I've always thought of anywhere I've worked). And since I work for one of the largest private employers on the planet I and my fellow employees are the subject of trash talking daily by the public - and you suck it up, deal with it and try to do a better job next time. If this is the first time you've ever experienced anything like that then I don't know what to say.

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    1. Job security is a good example of what I mentioned above with different anxieties that the private sector faces (fwiw my wife does NOT have that kind of job security because she's a title X employee not a GS employee but you seem sufficiently flippant about various stresses my family has that I doubt you care).

      There's a flip side to that of course. My wife, who cares about her job, has to do the work of a lot of people that don't.

      re: "I work in the private sector, and pay and hiring freezes are the norm depending on quarterly performance"

      Right, but that's the WHOLE POINT - "according to quarterly performance". That was not going on in the federal government. Pay and hiring freezes were arbitrarily placed across the board, NOT according to performance. My wife's college takes on students from foreign countries, other agencies, and various branches of the military and their funding comes from these sources. If it were in the private sector her college would be identified as a profit center. It was not a drag on the university or the DOD's budget and it was performing better than any other college in the university on other metrics too. And demand for its services (students that is) was growing. But they were still hit with across the board freezes.

      Which is not what you deal with - as you say, the conditions you face are determined by quarterly performance. As I've already said of course the private sector has OTHER anxieties they deal with. I study labor markets for a living, Gyges. You don't have to come in here all high and mighty and then on top of that think you have to explain these things to me.

      re: "And since I work for one of the largest private employers on the planet I and my fellow employees are the subject of trash talking daily by the public "

      I don't think there's any private employer not guilty of criminal acts that gets the trash talk that the federal government does. This is not a complaint about criticism of government, of course. That's healthy. It's a problem of misplaced hostility to good people that do good work.

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    2. "you suck it up, deal with it and try to do a better job next time"

      Thanks for the advice but this has been standard practice in the Kuehn household well before you decided to wander on the blog.

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