An Economics party?
No I’m not talking about the epic adventure that is an economics drinking party – I am talking about the idea of an economics political party.
Scott Adams on the Dilbert Blog discusses his idea of an economics political party after becoming irritated at Hillary Clinton. It is well known that I am unsure who to vote for given the policies of parties in New Zealand. However, would an economics political party really solve this for me.
So ultimately I have to ask do you think that a political party of economists is a good idea? Furthermore, is the economics party that Scott Adams lays out the same as the economics party that you would lay out? I have some opinions – but I’ll save them in the off chance that someone comments on this post 😉
Well, assuming that the results for US academics hold in NZ (that the typical economist is a moderate democrat), that would probably make a NZ economic party fairly centrist/slightly National leaning (I’m making a back-of-the-envelope adjustment assuming that the Democrats are probably more right-wing on some issues than Labour). The NZ economics party would support free trade (no change) and probably be a little bit more open to market-based solutions, but I’m struggling to see how an economics party would be meaningfully different from the status quo.
It’s certainly an interesting idea. The rigorous requirements for policy typically generated by academia would be an improvement over the kind of emotion filled ‘popular’ economics that current politicians follow.
It does leave the question of what type of economics would be followed though. A focus on the social costs of inequality or public spending as an investment could lead to a party further left than labour. On the other hand an efficiency rather than equity centred approach including acceptance of traditional economic assumptions such as consumer rationality would lead to a flat tax rate and other very right wing policies. It’s interesting to note that there are often doctors of economics on both sides of many debates including poverty, privatization, international trade, and labour markets.
Unless one particular type of economist or economic school of thought gained ascendency I can imagine an economics party having a fascinating mixed bag of policies from across the political spectrum. Applications of recent research into behavioural economics, for instance (e.g. the libertarian paternalism of Richard Thaler), would certainly be fun to implement!
I think you both have a point. There is a wide variety of opinions in Economics, stemming from different value judgments – as a result it is difficult to associate an economics party with a specific brand of policy.
Furthermore, in terms of New Zealand economic policy it is unlikely that enough New Zealand economists agree on specific changes for such a party to change the status quo.
In a sense, Scott Adams hope for an economics party probably rest on a wish that the political process was more transparent – the question then is, is policy in New Zealand transparent enough? Ultimately, I want a party that doesn’t have wildly pragmatic policies which are based on economic illiteracy – however I suspect this will always be a pipe dream and never reality.
To simplify my point: assume that all policies in NZ could only be passed by a “yay or nay” vote from a representative (academic, public sector, private sector) learned council of economists. What policies that we currently have can we be confident would be rejected? What policies that we don’t currently have can we be confident would be passed?
My instinct is that this system would not produce results substantially different from the status quo. It might cut a few of the completely ridiculous boondoggles, but those aren’t normally very expensive to begin with.
“My instinct is that this system would not produce results substantially different from the status quo.”
Indeed, I believe I agreed with you on that.
The only policies that could potentially be impacted are ones that are objectively wrong – as we can come up with a set of prior values that justify most policies, the result of any economics party will be the result of their prior value judgments rather than an indication of what the “economics community” might feel.
I’d like to see an economics party get into parliament saying that they would lift the tax on petrol and cut the tax on tobacco in order to put them at the right level to correct for externalities 😉
A proper Economics Party would simply implement Hanson’s decision markets writ large. See his paper “Shall we vote on values, but bet on beliefs?”. Long story short: we have folks vote on a social welfare function, then implement futures markets with contracts paying off on the value of the welfare aggregate conditional on different policies being implemented. If the markets suggest a policy to improve the SWF, then it’s implemented automatically. Lots of obvious objections, but go read Hanson’s counterarguments before dismissing it out of hand.
hanson.gmu.edu/futarchy.html