David R. Henderson  

Friday Night Video: Munger, Skidelsky, Epstein, and Roberts

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This is an almost 2-hour video of a forum held at Butler University in April. The participants are Mike Munger, Robert Skideslky, Richard Epstein and moderator Russ Roberts.

The transcript is here.

Some highlights:

00:08:40: Mike Munger's "beauty contest for pigs" analogy. It's reminiscent of the late George Stigler's line that many people who use market failure as an automatic justification for government intervention are like the judge in the beauty contest who, upon seeing only the first contestant, awards the prize to the second.

00:15:45: Munger's funny story about inconsistent expectations between him and an older woman in Germany.

00:26:26: Skidelsky's story about why Keynes liked Hayek's The Road to Serfdom so much.

00:27:40: Keynes's (first) big "but" about The Road to Serfdom: Hayek doesn't give us much guidance about where to draw the line between the market and the state. This was quite good and it points to something I also found unsatisfying about Hayek. It was also reminiscent of Walter Block's criticism of The Road to Serfdom.

BTW, I enjoyed Skidelsky's presentation much more than I expected to.

1:05:43: Munger's parable of the unicorn.

1:17:40: Skidelsky suggests that a possible cause of the decline in the money supply was a collapse in the demand for money. I don't get it. Did he mean something else?

Overall, what I found interesting is how, in this debate, as in many others between articulate and informed economics debaters, so much of it comes down to how one interprets key historical events. In this case, one of the key ones was the Great Depression. For an article that pulls together a large part of the literature on the Great Depression in a short space and gives its own interpretation, see Gene Smiley, "Great Depression."


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COMMENTS (9 to date)
Ashton writes:

Terrific. Thanks for this!

Ben Hughes writes:

I was also impressed by Skidelsky's performance, but really cringed listening to his reply to Mike's blood-letting analogy. He completely missed the point of the analogy. Replace Mike's analogy by saying "blood pumping", and his reply makes no sense, while the analogy still stands.

All-in-all, really enjoyed this discussion. As usual, listening to Richard Epstein impressive speaking style was entertaining. Appreciated Russ's always-outstanding moderation as well.

ThomasH writes:

To "use market failure as an automatic justification for government intervention" makes about as much sense as to reject use market government intervention as a solution for market failure because it is "government intervention."

Mike Hammock writes:

I found Richard Epstein underwhelming. His focus on monopoly seemed strange (isn't antitrust subject to the same rent-seeking and public choice problems as other government policies?), and he didn't seem to understand the macroeconomic questions at hand. I think I would have preferred to just have Munger and Skidelsky, with occasional interruptions from Roberts.

William Bruce writes:

My best guess about Skidelsky's comment is that he was referring to the destruction of inside money, narrowing of the inverted credit pyramid, increased demand for base money, etc. There were a couple of other places where he misspoke, but in such a way that his meaning was obvious to charitable interpretation.

L.C.Waddell writes:

Am I the only one who was surprised when none the panelists mentioned the protection of individual rights when asked about the key functions of government?Prof Skidelsky's answer of providing economic stability is interesting as world governments did none of that before the 1900s.I am a fan of Richard Epstein but he seemed to be having a different debate from the rest.

Daniel Kuehn writes:

This is an interesting discussion but there is a very strange tendency in all three of them to dramatically inflate what the others are arguing... not just Skidelsky vs. Munger/Epstein but also between Munger and Epstein.

Daniel Kuehn writes:

Epstein's line of argument at around 1:30 is very, very odd. He seems to be saying that there is better evidence that regulation is causing the slow recovery than that demand problems are. My read of the evidence is that it's precisely the opposite.

He also makes a claim about hiring that is completely the opposite of what I've seen in the data (the NFIB) - usually these data point to a sharp run-up in demand/sales problems and not regulatory problems associated with the crisis.

Thankfully, Russ stepped in and didn't seem to find him very convincing either.

Daniel Kuehn writes:

Ben Hughes -
I agree Skidelsky didn't quite get what Munger was saying, but it was not a very good analogy to the claims actually being made which may have been a source of confusion. The whole point has been that Krugman had an ex ante sense of the appropriate size of stimulus - it was too small to begin with judging by that ex ante estimate, and we haven't had anything since. This has nothing to do with the analogy Munger was trying to make.

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