14 Mistakes

| Wed Mar. 9, 2011 7:32 PM EST

Tyler Cowen has put together a list of common mistakes made by left wing economists. I'm not an economist, but I'm left wing and I comment on economics, so close enough. So I'm going to go through the list and note where I stand on each of his items. I'm not going to explain things or justify myself, I'm just going to stake out my position in a sentence or two. Here are Tyler's 14 mistakes:

1. Suggesting that money matters in politics far more than the peer-reviewed evidence indicates.

I think the peer-reviewed evidence is wrong. It simply isn't able to capture all the dynamics of money in politics.

2. Evaluating government spending on a program-by-program basis, rather than viewing the budget as a series of integrated accounts. Cross check with the phrase "Social Security," or for use to take many discretionary spending cuts off the table.

I'm not sure I really get this one.

3. A reluctance to incorporate sophisticated "public choice" theories into the analysis of favored programs.

Perhaps so. On the other hand, "sophisticated" public choice theories are often not nearly as sophisticated as their proponents think, and are too often abused in fairly transparent ways as a way to justify preexisting beliefs that government doesn't work.

4. Sins of omission: there are plenty of bad policies, such as occupational licensing, which fail to come under much attack from the left. Sometimes this is because the critique would run counter to the narrative of needing more government or needing more regulation.

Probably true. I'm not persuaded that occupational licensing is really all that big a deal, but sure: we lefties ought to criticize bad policies regardless of whether they help our cause or not. (Ditto for everyone else, by the way.)

5. Significantly overestimating the quality of the political economy of an America with more powerful labor unions and underestimating the history of labor unions as racist, corrupt, protectionist, and obstructions to positive change.

Actually, I think lefties are fairly willing to own up to past problems with labor unions. Hell, we spent the better part of the 60s and 70s rebelling against them. As for the quality of an America with more powerful unions, most left-leaning economists aren't really all that super friendly toward unions, I think. Without overestimating things, however, I do think we'd be better off on net with stronger private sector unions.

6. Overestimating the efficacy of fiscal policy, underestimating the power of monetary policy, and sometimes ignoring or neglecting how the two interact ("the monetary authority moves last").

Hmmm. Most of the lefty economists I read seem to understand this. But especially in a recession like our current one, fiscal policy can be reasonably powerful if monetary authorities (a) don't appear willing to do as much as they should, but (b) also aren't likely to actively oppose fiscal expansion.

7. Citing weak versions of structural unemployment theories and dismissing them with a single sentence or graph, while relying on stronger versions of structural theories in other, non-cyclical contexts.

No opinion on this one.

8. Lack of interest in discussing ethnicity and IQ as relevant for social policy, except in preferred contexts.

This is probably true, though there are obviously some pretty good reasons for it.

9. Overly optimistic views of the fiscal positions of state governments. Since the states don't have the same tax-raising powers that the feds do, and since state government spending is favored, there is a tendency to see these fiscal crises as not so severe, or as caused by mere obstructionists who will not raise taxes to the required levels.

In general, there might be something to this. Right now, however, state problems are largely caused by drops in revenue, not out-of-control spending, and many state problems are indeed caused by obstructionists who will not consider tax increases in any way, shape or form. However, it's possible that I'm biased in my views because I live in California.

10. A willingness to think that one has "done one's best" in the realm of policy, and to blame subsequent policy failures on Republican implementation, rather than admitting that a policy which cannot be implemented by both political parties is perhaps not a good policy in the first place.

This is unfair. Republicans can implement Democratic policies perfectly well. They simply choose not to. Asking liberals never to do anything that Republicans will try to sabotage is tantamount to asking liberals to never do anything.

11. Use of a strong moral argument for universal health care coverage, combined with a fairly practical, hard-headed approach to the scope of the mandate, and not realizing the tension between the two. Failure to indicate where the "bleeding heart" argument actually should stop and at what margins we should (and will) let non-elderly people die, if only stochastically.

Also unfair. This is mostly a marketing issue, not an economic one. In practice, the only way to build support for universal healthcare (or any other policy) is to talk up its good points, not its drawbacks. Insisting on some Diogenic level of honesty from liberals is really just a way of ensuring that liberals will never win public support for anything.

12. Implicitly constructing a two-stage moral theory, which first cordons off the sphere of the nation-state (public goods provision, etc.) and then pushing cosmopolitan questions off the agenda in the interests of expanding a social welfare state. (In fairness, many individuals on the right don't give cosmopolitan considerations even this much consideration, although right-oriented economists tend to be quite cosmopolitan.)

I guess I'd plead guilty to this. For better or worse, I'm more interested in the American welfare state than in other countries' welfare states.

13. What about countries? Classical liberals are increasingly facing up to the enduring successes of the Nordic nations. There is not always a similar reckoning with the successes of Chile and Hong Kong and Singapore; often this is a sin of omission. (Addendum: comment from Matt here.)

This is a good point, but probably a hopeless one. As near as I can tell, virtually no one is willing to take comparative political economy seriously. We all just cherry pick the stuff that helps make our case. (In defense of everyone doing this, however, country comparisons are really, really hard. In many cases, it's virtually impossible to honestly tease out any firm conclusions.)

14. Reluctance to admit how hard the climate change problem will be to solve, for fear of wrecking any emerging political consensus on taking action.

Actually, liberals spend a ton of time talking about how hard climate change is. Still, there's something to this. As hard as we say it is, it's probably even harder than that. (This, by the way, is why I support research into geoengineering. I hope we can do something about climate change, but I suspect that we can't. Geoengineering might turn out to be our only hope sometime in the future.)

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