Arnold Kling  

Most Economists Have Two Hands

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Daniel B. Klein and Charlotta Stern write,


Supporters of free-market principles, we maintain, would score at least a 4.0 on the 18-question policy index presented here, and strong supporters would score at least a 4.5. By contrast, the mean for the 264 AEA members who completed the survey was 2.64.

If I were surveyed, depending on my mood I might not meet the authors' standard for being a supporter of free-market principles. For example, on minimum wage laws, I might only be "mildly opposed" (4), rather than strongly opposed, because I think they do relatively little harm. I might end up being only mildly opposed (as opposed to strongly opposed) to a lot of the government interventions in their survey, which would not give me many 5's to work with. For example, my opposition to restrictions on drugs, gambling, and prostitution is tentative, since we do not know what it would be like without those restrictions. It could turn out that eliminating those restrictions would have the horrid consequences feared by those who support those restrictions.

I might "mildly support" air and water regulation, which would give me a 2 on that question.

I'm pretty sure I would wind up with a score over 4.0, but I can see where economists with an "on the one hand, on the other" bent would not. Edmund Phelps, the newest Nobel Laureate, would be a classic example of that.

Thanks to Greg Mankiw for the pointer.


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COMMENTS (16 to date)
Mike Linksvayer writes:

For example, my opposition to restrictions on drugs, gambling, and prostitution is tentative, since we do not know what it would be like without those restrictions.

What? We don't know precisely what would happen if a jurisdiction in which one of these is illegal were to legalize, but we have a very good idea from other jurisdictions, current and past, where they are legal.

Brandon Berg writes:

Gambling is legal in many jurisdictions, and laws against drugs and prostitution are laxly enforced and widely disregarded. Could things really get that much worse if we just went ahead and made it official?

Kevin Nowell writes:

I agree with Mike. How could you not have a good idea what would happen?

Matt writes:

The paper had the bias against government intervention. Government industry can always compete fairly in a free market, in theory. Government distorts the market more often than is done in the private sector, usually by a large margin. That is a difference in degrees; and collective action in the private sector can often be very distortive and hard to escape.

The dichotomy between private and public sector is a first order approximation for economists. Economists are better off skipping this approximation and just investigate when and how markets are distorted by collective action, as a general problem.

Kevin Nowell writes:

Matt,

By "collective action" do you mean specifically coercive collective action or are there other kinds of distructive collective action that I am not aware of?

Kevin Nowell writes:

distructive=destructive

Dr. T writes:

The survey had numerous flaws. One question was about tighter controls on immigration. I strongly favor tighter controls. The authors consider this a non-free market response. However, I also favor greatly increased legal immigration. This subtlety was lost in the simplistic survey.

Another question was on government regulation of air and water pollution. I am a staunch libertarian, but I believe that the primary purpose of government is to protection individuals against harmful acts of others. This is not a free market issue; it is a quality of life issue. Government should protect me against attacks by gangs of thugs and against lung damage or cancer caused by factories belching toxic gases.

I conclude that the authors are opposed to nuance and fine distinctions.

Kevin Nowell writes:

Dr. T,

In the sentence, "Government should protect me against attacks by gangs of thugs and against lung damage or cancer caused by factories belching toxic gases" replace the word 'government' with the word 'law' and then you've got a libertarian statement. What you wrote is not.

Ragerz writes:

"For example, my opposition to restrictions on drugs, gambling, and prostitution is tentative, since we do not know what it would be like without those restrictions."

Its this sort of statement that makes me respect Kling on an intellectual level, even if I am inclined to disagree with him on many issues. Rather than being an ideological know-it-all, it appears that actual facts and consequences are capable of changing Kling's position on various issues. That is a sign of intellectual maturity. If only all libertarians could be as smart.

Or as Donald Rumsfeld might say, the "unknown unknowns tend to be much more dangerous than the known unknowns." It takes intellectual maturity to identify an appropriate level uncertainty in one's own beliefs, despite strong ideological inclinations.

Brad Hutchings writes:

I don't think Kling is a typical libertarian. After reading his recent TCS essay From Far Left to Libertarian, I wondered why he'd want to affiliate.

Take COA... his suggestion of an independent board to review treatments and give them a probability of success... Conceptually, it's a brilliant idea. It is certainly information I would like to have. Heck, the way veterinary care is going, I'd like it for my dogs. A good friend of mine just spent about $1500 on three visits to a doggy dermatologist who couldn't figure a thing out about a skin problem the dog had. Most of us would pay anything for our pets, let alone our families, for any ray of hope. Especially in the dying process though, it would be a lot better to know when to bring someone home and preserve their savings for a spouse that has to live on.

Anyway, what Kling lacks in proposing such a board that libertarians tend to have is a gut-level cynicism that such a board could be above politics enough to make a difference. For example, what would such a board say about chiropractors? Get a group of 100 people, and you could start a shooting war by more than whispering anything about chiros being anything more than witch-doctors. Consumer Reports seems like a great model, but even CR no longer has the luster it had in a less cynical time like the 80s.

Kling is also willing to suggest improvements rather than hold out for ideologically pure solutions. It's the methodology of a progressive, but applied to libertarianism. Ever notice how the Dems can pull screwy new policy proposals out of their hats every few years, while Republicans can only say "no" or "slower" or "cut marginal rates"? With the one notable exception of 1995 (speed limit repeal, OTC drug liberalization, etc.), we've not had even a short sustained period of progressive libertarianism.

Jody writes:
Ever notice how the Dems can pull screwy new policy proposals out of their hats every few years, while Republicans can only say "no" or "slower" or "cut marginal rates"?

Are school vouchers and private accounts for SS not screwy enough to count?

Lord writes:

Where are the questions on child labor and slavery? We want to know just how free market you are!

Brad Hutchings writes:

Jody, I should have said "pull them out and pass them". Think helmet laws, SarbOx, recurring minimum wage hikes. There's always something the liberals are fighting for and rallying around, and they end up winning some of them. Conservatives and libertarians can't even get on the same, er, page to do something progressively better for economic freedom.

Randy writes:

Lord,

Child labor and slavery were not part of the free market, which consists only of value for value transactions which are freely entered into. Child labor and slavery were both socio-political institutions and both involved the application of force. That these were eventually done away with by other socio-political institutions and an opposing application of force is a good thing, but the free markets were not responsible for the former socio-political institutions, nor are they indebted to the latter.

Lord writes:

They really were market institutions. No one forced parents to make their children work. Force was necessary to maintain the order of the market as it is necessary for all markets, but there really is no difference between them and contracts entered into by other means such as indentured servitude or as a result of debts. One party generally had significantly more power than the other which has little input into the result.

liberty writes:

Nothing where the inalienable rights of the person are not protected (life, liberty and property) is free market as a free market must have protection of these rights to exist. By that standard slavery is anything but free market. It is anarchy not a free market to have a market without laws, rights or protections -- without contract law, you cannot trade; without property rights you cannot own, invest in or sell goods. The people who were slaves had no property rights and no right of liberty, hence that was anything but a free market.

The question of child labor is a little different. Do the rights of life, liberty and property fully apply to all ages? The abortion debate also begs this question. Can minors make contracts? There is certainly a question of competance to understand a contract that must come up -- whether a contract is entered by a mentally deficient person or a minor, a government that protects property rights would tend to find fraud where a fully competant person entered a contract with someone known to be not-competant. And then there is the question of how the society understands parental jurisdiction over the minor, which is a more complicated question.

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