economists were more likely than the public to support the U.S. auto bailouts, by 58.6 percent to 52 percent. They were also more likely to support President Barack Obama’s economic stimulus bill, by 52.8 percent to 43.4 percent. More economists — over 97 percent — were in favor of tax hikes, and fewer supported school-voucher programs.
He cites a paper by Sapienza and Zingales.
On a related note, Barry Eichengreen praises capital controls.
It’s fair to say that the vast majority of economists are deeply skeptical about (if not downright hostile toward) their imposition. Yet it is not hard to find evidence in international financial markets of the kind of distortions that are likely to lead to imperfect information and, as a result, to economically inefficient and socially undesirable outcomes.
Pointer from Mark Thoma.
In a related essay, Smith argues that the current debate in economics is between the center-left and the radical left.
The New Center-Left Consensus is attractive to academics and policy wonks. It draws on an eclectic mix of mainstream economic theory, empirical studies and historical experience. It refuses to assume, as many conservatives and libertarians do, that free markets are always the best unless there is a glaring case for government intervention. It’s more willing to entertain all kinds of ways that government can improve the economy, from welfare to infrastructure spending to regulation, but it also recognizes that these won’t always work. . .
But there’s a second strain of progressive economic thinking that is gaining attention and strength. This alternative could be called the New Heterodox Explosion. It’s basically a movement to purge mainstream economics from progressive policy-making and thought.
Smith and the left dismiss those of us who favor free markets as outmoded and simple-minded. So the real debate is between economists who believe that elite mainstream economists know best how to fix the economy and others who believe that complexity theorists or evolutionary economists know best how to fix the economy.
I think that he accurately portrays the state of the discussion. I cannot think of a period in my life when market-oriented economists had less respect, unless it was the early 1960s when “fine tuning” had yet to be discredited.
I guess the economics is settled.
I don’t dismiss y’all. I personally think there are still important areas where free-market ideas are crucially important – land use, occupational licensing, and probably a lot of regulatory issues that I don’t understand well (yet).
BUT, my point is that the pendulum of opinion, both public opinion and the consensus of the economics profession, is swinging away from the free-market pole. I think this is generally a good thing, but I also think it’s likely to swing too far, and in another few decades we’re probably going to be in need of a new neoliberal revolution…
When I studied economics as an undergraduate in the late 60’s, Keynesianism and Samuelson was all the rage. It took a few lonely voices like Friedman and the reality of stagflation to demolish that consensus.
Science is not a matter of taking a vote and majority rules. I don’t see the evidence that interventionism has been a success – see the 2009 stimulus that did not achieve what was promised (not by a long shot). See also the anemic growth under Obama and the massive failure of the government takeover of healthcare.
I can understand the public’s ignorance of economic reality, due to lack of education. The degradation of economics in the academy is part of a larger decline in higher education.
I can’t wait for the new ‘selective free marketism of political convenience’ where the conclusion in every area is the one compatible with the interests of the evolving progressive coalition.
We already know what that will look like. Every exception to the general rules will simply be rationalized away with its own just-so story
+1
That’s already here. Its name is Paul Krugman.
Thanks for coming by here, too, Noah — part of the reason you’re becoming more influential is by being available for the conversations.
You fail to mention two big issues — with more gov’t intervention, there is more demand, & higher paying jobs, for economists for all these areas, rather than more entrepreneurs looking to make better products & services. The bias of economists supporting demand for more economists should raise skepticism by all.
You also failed to mention Public Choice (or Gov’t Failure) studies. “Market failures” are often claimed where, like Obamacare (which you’ve been supporting) the failures are more accurately due to the gov’t choices & programs & incentives.
Many of these economists favoring more gov’t have been pretty quiet about the failure of Venezuela — and that’s a pretty strong case against excess gov’t intervention.
Guess we’ve solved the “mystery” of low productivity.
The time is coming, probably before I die (am 50), where no economist will admit to being one for fear of being strung up on a lamppost. Smith is one of the poster children for why.
Somewhat apropos of this post, it would be interesting to read a response from Arnold, or a likeminded person, to the following:
http://idiosyncraticwhisk.blogspot.com/2016/10/the-obama-administration-sees-its-own.html
Erdmann is another economic fool.
Maybe so, but I was hoping for a more substantive, less ad hominem response. Remember, we’re supposed to be charitable here! 😉
Boil Erdmann down, and what you find is a plea for finding a way to keep a housing bubble from popping. Boil down most of the Keynesians, and you find the exact same thing.
Here’s a question though. Why did economics get taken over by these trends?
It’s not enough to prove these people are wrong. Wrong people gain power all the time. Why have they gained power? What can be done about it?
It’s not just economics. Every scholarly and intellectual discipline and every profession has been infiltrated and colonized by the Left. This has occurred in all Western countries. Why this has happened is the question that needs to be answered.
I wonder if maybe the free-market economists are more attracted to business schools, where they can teach in HR (labor), finance (financial econ), strategy (IO, micro, game theory), etc.