Bryan Caplan  

Caplanians in the Ivy League?

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I still remember when I was an undergraduate and Bill Dickens taught me how to pronounce "Mankiw." (That's MAN-KYOO to you.) I never would have believed that one day he'd be turning my name into an adjective:

The public tends to be upset whenever prices rise. When gasoline prices rise, oil companies are accused of price gouging. When textbook prices rise, Ralph Nader investigates publishers. There is no question that the cost of state-of-the-art healthcare has been increasing, mainly because of technological progress. Egged on by some pundits, the public is inclined to think that some villain must be responsible for the increasing cost and that the government can fix the problem. On this and many other issues, I am a Caplanian: voters need to be better educated, lest we stumble into poorly motivated populist policies.
Unfortunately, at last week's conference at Yale, I learned that Caplanians in the Ivy League are still in short supply. The four other panelists - famous economists/textbook authors Bill Nordhaus and Ray Fair, political scientist Alan Gerber, and law professor Bill Eskridge - were quite critical of my book. (The organizer, Roberta Romano, was much more supportive, but had a non-speaking role during the event).

Each panelist had a long list of detailed criticisms. But their main common criticisms, as far as I could tell, were:

1. Maybe politicians don't pay attention to public opinion. Some critics emphasized that policies are better than public opinion would support; others simply questioned whether there was solid evidence that politicians respond to public opinion.

2. Politicians defer to experts - including economists - when they formulate policy.

I didn't have much time to respond, but here's what I wish I said:

1. The idea that politicians don't respond to public opinion is as implausible as the idea that businesses don't respond to consumer demand. There is a mid-sized empirical literature on this in political science. But I'm more convinced simply by (a) My uniform observation that politicians desperately try to find and adopt popular positions, and (b) The regularity with which that the median respondent on fairly-worded surveys supports the status quo.

I freely admitted in my book - and tried to account for the fact - that policies are better than you would expect given public opinion. But this hardly shows that policy is not highly responsive to public opinion. The plausible model is not that Policy and Public Opinion are unrelated, but that:

Policy = f(Public Opinion) + Bonus

2. Sure, politicians defer to experts on issues where the public is agnostic. But how often do politicians listen to experts when the public thinks it rejects the expert consensus? Every economist I've talked to who has actually advised politicians relays the same story: If you tell politicians to do unpopular things, they usually either smile and ignore you, or politely suggest that you shut up.

If you don't believe me, why not ask Mankiw, who learned the truth through bitter experience? You could say that testimony from another Caplanian doesn't count. But that's hardly fair. If you'd walked in Mankiw's shoes, wouldn't you be a Caplanian too?

P.S. I just noticed that in this 2005 interview with EconLog, Mankiw has a pretty rosy view of his outsourcing controversy:

Roberts: ...Any regrets from your time in Washington you'd like to mention?

Mankiw: I don't have regrets. I had a great time there. The only time I found myself in hot water in the press was when I was defending free trade in a way certain members of Congress didn't like.

Roberts: I remember that.

Mankiw: They jumped on top of me, but I actually don't regret defending free trade because I feel as passionately about that as I do about any policy issue.

Roberts: Did you get any internal political heat in that fight?

Mankiw: None. Obviously, it's not the job of an economic advisor to make headlines and I deeply regret that. But no one inside in the administration said, "Why are you defending free trade, we don't believe in that here." This is very much an administration of free traders.

Hmm.


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COMMENTS (8 to date)
Cliff Styles writes:

It seems to me that the two opposing arguments that you summarize actually concede your main premise. I would add that arguing for the democratic control of economic policy because the politicians don't do what the voters want is hardly a very strong argument for such control...

MattS writes:

Might the function look more like this:

Public policy = f(public opinion, expert opinion)

Admittedly, the second variable seems to have a much smaller effect than the first, but the effect is there. You even admit in your post that when the public is indifferent, politicians listen to the experts.

Nathan Smith writes:

One could argue that Mankiw's experience didn't show voters' economic illiteracy, but the economic illiteracy of journalists and the some politicians and pundits. The man in the street probably never heard about Mankiw's too-reasonable faux pas. Of course you can argue that journalists and populist politicians have their ear to the ground and know what appeals to and offends people. Maybe. But Mankiw's subjective evidence that economic commonsense makes people mad is still based on a biased sample.

Steve Sailer writes:

Let's take one single issue: immigration

You and most Senators hold similar views. I and most members of the public hold similar views. If you and I played a game of Jeopardy in which every topic related to objective facts about immigration (as opposed to, say, what Julian Simon believed ought to be true about immigration), I would beat you by a score of about $20,000 to $1,000.

So, how does that fit into your theory?

Punditus Maximus writes:

Second example: Iraq. Supermajorities of Americans regularly support setting a date for a pullout, but it never happens.

Third example: Impeaching the Vice President. Majority of Americans in favor for years, finally a single bill which the leadership is trying to kill in committee.

Fourth example: Bankruptcy bill. Majority of Americans most certainly do not support credit card debt being exempt from bankruptcy.

I think your slip is showing -- liberatarians tend to be obsessed with regulatory capture when regulations that favor working folks and the poor are proposed, but now that the Grand Unified Theory of Policy is proposed, campaign donors are nowhere to be found.

Let's take one single issue: immigration
Really, Steve Sailer focusing on one issue. Say it ain't so!

Really though, your point is irrelevant, Steve. First, you’re wrong. Second, why does morality have no basis on your thought process?

dearieme writes:

Surely a libertarian says that the first requirement for a bankruptcy law is that it must not be retrospective: a new law may apply to new debt but not existing debt.

John Fast writes:

It's hard to believe such presumably competent experts would come up with such bizarre comments. I'm curious, though, how the competence of the panel at Yale compares with that of, say, the players in your Champions scenarios. Is it possible to do a comparison between the players and a hypothetical "enlightened player"? Although to be fair we should also compare the competence of the two groups at playing Hero System[TM] games.

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