Matt Yglesias tackles some influential -- yet pernicious -- views in politics and economics:
Well I’d say one important set of ideas is the perverse notion that it’s wrong or inappropriate to subject people to moral criticism for making selfish decisions as long as the decisions don’t involve breaking the law. I’ve been writing a bit about this lately with respect to greedy financiers, but it’s a more general thing. If a person announced to his friends and family “I’m going to steal $17 billion from aspiring college students and give the money to banks” we would expect a degree of shock and ostracism to follow. Indeed, if a person said “I’m going to pick a student’s pocket at rob him of $17″ we would expect some shock and ostracism.
Such behavior is, socially speaking, considered not okay. But while it’s considered perfectly normal to expect one’s friends, peers, and colleagues to eschew stealing money from people, it’s considered hopeless naive to expect people to eschew the opportunity to go cash in by helping Sallie Mae hold on to money it doesn’t deserve. Along the same lines, I honestly don’t understand how the executives for the big fossil fuel firms sleep at night; but I know that part of the reason they sleep well at night is that in today’s America nobody really points out that their behavior is, on a personal level, more than a little shameful. People don’t discuss this issue by making explicit reference to Milton Friedman’s arguments about the social responsibility of business, but the shift in public discourse around these issues stems back to his work.
Another example is that, as Brad DeLong pointed out yesterday, economists’ protestations that they’re doing value-free social science actually embeds an implicit idea that “that shifts in distribution are of no account–which can be true only if the social welfare function gives everybody a weight inversely proportional to their marginal utility of wealth.” In other words, under guise of eschewing values, economics has adopted a philosophical value system which says that the well-being of rich people is more important than the well-being of poor people. Nobody ever says “social welfare function” when engaging in practical political debate, but the idea that not caring about distribution constitutes some kind of neutral middle ground is an important underlying premise of much practical political debate, and it’s viability stems from the fact that everyone remembers being taught that this is true in their Economics 101 courses.
As a third example, as a society we’ve become accustomed to the idea that when empirical evidence seems to contradict basic economic theory—as when the United States experienced rapid economic growth under conditions of widespread unionization and a high minimum wage—that we ought to accept the theory as true. This, again, is usually a claim you hear being made by economists, but its social prestige ultimately is a kind of idea in epistemology or the philosophy of science. And all this, of course, is to say nothing of the specific influence of particular empirical claims in economics which hold that high levels of taxation and government spending are everywhere and always economically destructive.
Such behavior is, socially speaking, considered not okay. But while it’s considered perfectly normal to expect one’s friends, peers, and colleagues to eschew stealing money from people, it’s considered hopeless naive to expect people to eschew the opportunity to go cash in by helping Sallie Mae hold on to money it doesn’t deserve. Along the same lines, I honestly don’t understand how the executives for the big fossil fuel firms sleep at night; but I know that part of the reason they sleep well at night is that in today’s America nobody really points out that their behavior is, on a personal level, more than a little shameful. People don’t discuss this issue by making explicit reference to Milton Friedman’s arguments about the social responsibility of business, but the shift in public discourse around these issues stems back to his work.
Another example is that, as Brad DeLong pointed out yesterday, economists’ protestations that they’re doing value-free social science actually embeds an implicit idea that “that shifts in distribution are of no account–which can be true only if the social welfare function gives everybody a weight inversely proportional to their marginal utility of wealth.” In other words, under guise of eschewing values, economics has adopted a philosophical value system which says that the well-being of rich people is more important than the well-being of poor people. Nobody ever says “social welfare function” when engaging in practical political debate, but the idea that not caring about distribution constitutes some kind of neutral middle ground is an important underlying premise of much practical political debate, and it’s viability stems from the fact that everyone remembers being taught that this is true in their Economics 101 courses.
As a third example, as a society we’ve become accustomed to the idea that when empirical evidence seems to contradict basic economic theory—as when the United States experienced rapid economic growth under conditions of widespread unionization and a high minimum wage—that we ought to accept the theory as true. This, again, is usually a claim you hear being made by economists, but its social prestige ultimately is a kind of idea in epistemology or the philosophy of science. And all this, of course, is to say nothing of the specific influence of particular empirical claims in economics which hold that high levels of taxation and government spending are everywhere and always economically destructive.
The obvious question then is: Given the influence of these pernicious ideas, are we stuck with them, or can we begin to see the world a different way?
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