Noah Smith has an excellent post about the “macro wars” that are going on at the moment (ht a reader).
Most of the time, econ bloggers and columnists write as if we were speaking to an audience that has taken a few econ classes. But the more widely read our posts and columns become, the more our real audiences fail to fit this ideal. Most people who read us are smart and educated. But smart and educated non-economists (“normal people”, if you will) see econ – and especially macro – in fundamentally different ways from economists.I’ve been thinking about these differences for a while, and I’ve reached two major conclusions:1. Normal people see macro as inherently political.2. Normal people see macro as being mostly about redistribution rather than about efficiency.
Back in 2003, Paul Rubin wrote about this. His view was the “folk economists” (people without sufficient training in economics – read pretty much everyone) view social interactions as zero sum games, and that this came from evolution and our pre-history. Economics, specifically efficiency arguments, involve “breaking” these common sense arguments – as we are discussing positive sum games (gains from trade). His conclusion is that the solution to this issue is to focus on efficiency more strongly, and to teach “folk economists” about economics [Note: As I mention here I think this view is too harsh to folk economists, understanding heuristics is something WE have to do if we want them to throw away “common sense”]
So most normal people seem to see macroeconomics as political (even if most economists don’t!), and see redistribution as the main question. The result is that public discussions of macro, on the blogs and elsewhere, usually break down into tribal camps, and thinkers are often seen more as tribal champions than as technocratic advisors or sources of intellectually interesting ideas. Many people see the “-isms” of macro – “New Keyneisanism”, “New Classicalism”, etc. – as political advocacy rather than as dispassionate scientific attempts to explain the world around us.
- For all the talk about not being in camps, and trying to do objective analysis, economists often turn around and “jump into camps”. Folk economists can’t observe when it is the “economist” talking and when it is the “ideologue”.
- As Noah states in the post, society is VERY interested in distributional issues – and economists often chuck them in the too hard box.
Now you may think I’m being unfair on economists – something that is strange given how much I love them. However, this is one area where I think economists make subtle logical leaps from “we are only discussing efficiency as it is the only thing we can comfortably discuss” to “only efficiency matters”. This isn’t on purpose, and NO economist would say that, but the discipline DOES push things that way.
Here is Robert Lucas discussing the discipline saying the opposite.
Of the tendencies that are harmful to sound economics, the most seductive, and in my opinion the most poisonous, is to focus on questions of distribution. In this very minute, a child is being born to an American family and another child, equally valued by God, is being born to a family in India. The resources of all kinds that will be at the disposal of this new American will be on the order of 15 times the resources available to his Indian brother. This seems to us a terrible wrong, justifying direct corrective action, and perhaps some actions of this kind can and should be taken. But of the vast increase in the well-being of hundreds of millions of people that has occurred in the 200-year course of the industrial revolution to date, virtually none of it can be attributed to the direct redistribution of resources from rich to poor. The potential for improving the lives of poor people by finding different ways of distributing current production is nothing compared to the apparently limitless potential of increasing production.
Economists are not moral philosophers, they cannot say that something is good or bad especially not in relation to some cardinal value. But as a discipline we can understand issues of distribution, and we do discuss them – just often not with the same discipline we do when discussing efficiency effects.