Thursday, January 30, 2014

Macroeconomics

I was looking at an essay by Arnold Kling, Memoirs of a Would-Be Macroeconomist, and came across this:

"If macroeconomics is a science, then the macroeconomic analysis of economists should not be related to their political views. In particular, the question of whether or not an increase in government spending during a recession will reduce unemployment should be an analytical question. On the other hand, the question of whether government spending in general should be high or low is mostly ideological."

As he goes on to say, this condition does not hold true. High-government-spending believers also typically believe in even more government spending during a recession. And low-government-spending believers typically in cutting government expenses during a recession.

"Whatever your views, you want to believe that they are grounded in analytical rigor and that it is the other guy who is blinded by ideology. However, the odds are that you over-estimate your own rigor and over-estimate the extent to which others' views are ideological."

I resist his rigor/ideology distinction here. To me, the 2 questions don't sound all that different, they are both questions about how much money the government should spend. One, the recession question, is just a more constrained case.

The left-leaning economist imagines the brilliant economic elite running government policy, out-thinking the masses and their vulgar markets. Perhaps he imagines himself as one of those elite, steering the nation to prosperity.

The right-leaning economist imagines the vast array of economic actors, all with their specialized local knowledge, out-thinking the experts and their centralized rules. Perhaps he imagines himself as one of those workers or consumers, steering himself to prosperity.

Does the road to prosperity
lead though expense or austerity?

2 comments:

Charlie McDanger said...

Does he consider that he might have his cause and effect backward? i.e. One's analytical reading might dictate his politics.

John Enright said...

I didn't read the whole thing yet, but your point is very well taken. I mean, I have known people who's overarching political attitudes shifted over time because of their detailed experiences, so why not shift or form your ideology based on your analytical reading?