So I would say I am fairly conservative especially when it comes to the economy, the policies etc. Though recently I have noticed a trend where many of the economists you come across in the media and otherwise lean left. Not to say, I do also have read reports and research by conservative economists. Though, most of them in the media definitely seem liberal(the modern sense of the word). Came across this interesting report and the notable quote which goes:
It’s worth asking: Why has economics shifted to the left? Maybe it’s because the country itself, and its problems, have shifted. In the 1970s, when conservatism and Friedman became the face of economics, we faced high tax rates, heavy regulation, high inflation and powerful unions. But in 2015, we confront rising inequality, economic insecurity, and the aftermath of a financial crisis and a long, deep recession.
Maybe a country simply gets the economics it needs."
Here is the link to the original report from Bloomberg: Economics Stars Swing Left
What do you guys think? is that true or these media economists mostly reflect the bias inherent in reporting today?
This is interesting - my econ experience in college and beyond (research-wise) was anything BUT left. But then again, you're looking at the media / prominent econ icons vs. academia, so perhaps that's where the difference lies.
Same is true for me but I also went to school in Texas. Still many of my college professors were very left leaning and many of the books we used would sometimes bash the more conservative institutions and scholars.
What would Krugman have to talk about if he believed and advocated in smaller government and less involvement? Perpetual academia also influences this some.
Broadly speaking, the last great movement in economics was the Friedman monetarist approach that was popular in the 70s and 80s and had lasting effects in the 90s, 00s through to today. Monetarism did a lot of good, but also had a lot of assumptions which weren't practical or universal in their application. But people clung to the ideological purity of Monetarism for too long (and many still do). Monetarism underpinned the Washington consensus model, which didn't do a good job at all in a lot of developing parts of the world.
The greater amount of left leaning economists today, to some significant degree, likely reflects a reaction against the prevalence and failure of the preceding popular school ie Monetarism. This is not unlike Monetarism rising in popularity in the 70s as a reaction against the popularity of Keynesian economics before that.
You'll note that there's an assumption of a pendulous movement in thought underlying this view, a Hegelian dialectic in search of a synthesis. However, whether in economics or other areas of theoretical study, this sort of staggering back and forth between the boundaries of debate are common.
In this and the last two centuries, those boundaries have normally been conceptualised as "Left" and "Right". It has not always been this way and likely won't be seen this way in a few centuries.
Could you elaborate on that last sentence? Interested in hearing your prognosis for what the alternative would be and your reasoning for the change.
I don't have any prognosis this week. I'm basing my view on history - eg if we were somewhere in the political though of last two thousand years, we could be interpreting debates in economics in terms of many different frameworks which were the overarching perspectives applied to most debates at the time. A few that come to mind:
Seeing things in economic class-based Left vs Right is just the dominant framework of the last two hundred years. Whether or not we agree with his politics, we're still living very much in the shadow of Marx's class-based view of history. And, in turn, the Hegelian dialectic.
And I'm often not a fan of dialectic thinking. It constrains the way you think about situations into thesis, antithesis, synthesis ie polarised argument, hoping for an answer that combines the two. This sort of thinking means most debate is stuck between the artificial poles of Left and Right with a false sense of the sensible outcome being some sort of compromise, as it those two are the only poles on the spectrum.
Look at the platform not the sources. It really is as simple as that. Media has gone from a bastion of discussion of ideas to a giant circle jerk of like minded thinkers. The media as a whole leans left, therefore the find people who will promote their ideology. It really is as simple as that. The bankers no longer run the world. Major media players do.
I attend probably the most liberal Ivy out there and I have never experienced even a slightly conservative undertone in any of my classes. Also most economists are very heavily influenced by academia. You have to think, most have spent 10+ years in an academic setting to recieve their PhD, so naturally they will absorb some of the leftist culture that is present in most universities.
As a non-economist/economics major, what is meant by left-leaning or right-leaning economics? Given that Keynesian economics has literally no history of ever successfully working (I'm not sure there is a single example that can be used as empirical evidence for support), my assumption was that Keynes had been discredited and wasn't considered seriously outside of Democrat politicians. With regard to right-leaning economics, aren't there numerous varying and often contradictory and often complementary (of each other) economic thoughts (supply-side, monetarism, Austrian, etc.)? I'm pretty right-wing and I'm a monetarist. My boss, however, is pretty right-wing and he entirely rejects the idea that the government should have any role in the economy (he supports the unadulterated gold standard).
Also, aren't there very true (empirically true) aspects of right- and left-leaning economic beliefs? For an extreme example, I'm struck by Karl Marx's prescience in some of his thoughts and observations about production, but I entirely reject his economic model as optimum. That must muddy the water somewhat when discussing right- and left-leaning economics because a pure, laissez-faire capitalist could accept the economic premise of even a communist but reject the communist's model.
LOL: Given that Keynesian economics has literally no history of ever successfully working (I'm not sure there is a single example that can be used as empirical evidence for support), my assumption was that Keynes had been discredited and wasn't considered seriously outside of Democrat politicians.
Bud, I think those WSJ op-eds may have gone to your head.
FYI: (Google, can't attach links unfortunately) What Debate? Economists Agree the Stimulus Lifted the Economy
What stimulus? Monetary stimulus or fiscal stimulus? I think economists agree that record low interest rates created by massive bond buying of the Federal Reserve has helped the economy recover better than in many places in the world, but I don't think there's a consensus at all that fiscal stimulus has improved the economy in any material way. Even so, this has been the worst post-recession recovery in history, hardly a ringing endorsement of Keynes.
It may be worth noting that Marx's "Communist Manifesto" was written while the guy was in his early twenties... his real contributions in terms of observing the economy imho come in Capital Vols 1-3 and The Grundrisse.
And one can't forget the "18th Brumaire of Louis Bonaparte" for an amazing, contingency-heavy analysis of "revolution gone wrong".
And I do agree with your point in the final paragraph... lots of truth in many different "political-leaning" observations. The problem arises when people accept these arguments writ-large essentially because they are "right-wing" or "left-leaning" without actually critiquing the premises and carefully defining the terms upon which they base such premesis. The result is what Hobbes noted in his introduction to Leviathan... that some of the most schooled men (in these ideologies) end up believing some of the most obscene absurdities.
I do think though the resuscitation of American industry through WWII is an oft-touted case of Keynesian economics working. Fundamentally I think there are probably many models that "work", the real issue is what kind of unintended consequences can arise from those policies?
Haha, what about 2008-present? We have two similarly sized first world economies, the US and the EU, 1 followed an austerity path, the other side a stimulative action. Which one is doing better?
I think that was a reference to fiscal stimulus, which neither block pursued for very long and therefore can't really be proven not to have worked (even though it did work in Japan in the 1930s for instance).
The US's stimulative path has been largely monetary stimulus, not fiscal stimulus. The many trillions of dollars shot into the economy through monetary stimulus dwarfs any fiscal stimulus. The European Union, on the other hand, has dozens of different economies that are under a singular currency, hence monetary policy works in practice more like the gold standard where governments don't have control over their own monetary policy. This goes back to my position as a monetarist.
Even so, America's economic recovery has been among the worst post-recession recoveries in modern times in the United States and is hardly a pillar of success for Keynes.
Binary causation fallacy.
The more recent trend illustrates the opposite is well. What effect do you think the insane tax hunt in the EU(Hell, the even had cash-sniffing dogs in Italy) is going to have on Capital flows?
You're ignoring some pretty massive structural differences between those two economies. Not only that, the EU isn't a homogenous economic system; there are massive disparities within the union.
Keynesian Economics has shown its worth. Look at present-day. The U.S. is growing after economic stimulus, while the EU is flirting with deflation after undergoing austerity measures. And the gold standard is medieval. It doesn't allow any monetary flexibility whatsoever. Experiencing hyper inflation? Deflation? Can't do anything about it.
This is a joke, right? You can't be this ignorant.
How many times will I be forced to reiterate this point in this thread?
First of all, there are MASSIVE structural differences between the United States and Europe. For one, the U.S. central bank (Federal Reserve) dictates monetary policy for the United States. In Europe, the European Central Bank dictates monetary policy for all of the EU member states (who are part of the Euro currency). There are something like 28 nations who utilize the Euro. By its very nature, ECB monetary policy will be less effective in regulating the economic cycle in Europe because you have 28 distinct nation-states with wildly different economic and fiscal needs. I believe this is actually one of the reasons that Friedman believed that the Euro wouldn't last (although don't quote me on that).
Second of all, European debt is/was completely out of control. If they had tried fiscal stimulus their currency would have collapsed and interest rates would have surged, which would have crushed their economies. Most EU nations didn't have the option to pursue fiscal stimulus, and I'd argue that it would have been a nightmare had they attempted it. You think Greece, Spain, Portugal, et al would have gotten cheap money (if any money at all) to spend on fiscal stimulus?
Third, U.S. stimulus has been predominantly MONETARY stimulus, which has dwarfed the economic impact of our FISCAL stimulus. These are distinct.
Finally, and most importantly, the U.S. has doubled its national debt in 6 years, and to what end? 4% GDP growth in the 6th year? In what way is this an endorsement of fiscal stimulus? There's essentially only one nation in the world that could add $22,000 in national debt for every man, woman, and child and still get cheap investor financing for it. And all that requires is a perfect credit history, the world's reserve currency, and economic malaise worldwide worse than our own. If anything, America's economic performance demonstrates the failure of Keynes--it demonstrates that it can only work (if it can even work at all) on a massive scale and only by nations that have access to massive cheap investor capital. And even then, its payoff isn't optimum since we've had the worst economic expansion after recession since WWII.
I think the reason's simpler than that. Left-leaning economic theory is in their self interest, as those policies serve to justify greater centralization of power in the federal government.
The unfortunate fact of economics as a field is that the politics associated with economic theory aren't always clear, yet partisans are quick to reduce economic theory to a set of left- or right-leaning slogans. For example, Keynesianism is commonly painted as leftist big-government economics, but what that doesn't recognize is that the advocacy of countercyclical tendencies doesn't fit into either left- or right-wing politics. The same thing is happening to MMT now, which is commonly denounced by "monetarist" conservatives for being "left wing" when that clearly isn't the case.
There are some valid points in the thread. I think it is sort of self perpetuating cycle though. The whole rich vs poor agenda has never been more glorified. Even tough your life is not affected by Bill Gates making a billion dollars, there is an acceptable standard of living that the media should focus on. If media were to talk about how we can remove the stickiness at the bottom, it would make perfect sense but pitting the poor against the rich just sells more. Once this happens, you want economists/people who can talk about income parity and how rich are making too much money and it is wrong. Once you have these people talking and the fickle public listening, other media sources catch on and they need to adjust their sources accordingly. It is sad how they are using people's ignorance to sell the idea that life is inherently unfair and you can do nothing about it.
Because right-leaning economists go into finance. /thread
Well stated.
This question could be be rewritten as; why do academic economist's views on economic policy generally align with the political left in America?
At its simplest, Keynesian economic thought provides an window into the failures of markets and yes, the ability of government to correct those market failures. Whilst Classical thought provides an avenue explore the capacity of markets to increase welfare. That said, this is somewhat of a caricature as there is significant crossover in mainstream economics with disagreement largely centering on economic policy rather than the actual economics itself.
Thus you may understand why economists of those frameworks tend to be of the left or right.
There are certainly many fantastic economists that could be considered of the political right. Gregory Mankiw, Robert Barro, Martin Feldstein, Robert Lucas and Ben Bernanke among others. So maybe this is more a question of why those economists championed today are of the left? Eg. Joe Stiglitz, Paul Krugman.
Perhaps if you consider the economic dynamics at play: Housing bubble, significant demand shock, labor scarring and high levels of inequality. The reason these views are championed are that they may provide the solutions to the economic problems at hand. Just as in the 1970s, Milton Friedman and co's free-market ideas provided the path to solving the problems of economic stagnation and rising inflationary pressures.
Side-note: It is important understand that America is quite rightward as a country politically, and in many parts of the world what you would consider so-called 'liberals' are really just moderates.
Dividing people like Friedman or Keynes into Conservatives and Liberals is completely idiotic. Both have important insights into the functioning of fiscal and monetary policies and trying to decipher economic events while dismissing one or the other out of hand is a recipe for disaster.
Some of the best economic stewards of the country since WWII do not fit in neat ideological boxes either. Eisenhower was probably one of the most fiscally responsible presidents ever but he initially wasn't sure what party to run with and I highly doubt he would stand a chance in today's Republican party.
Volcker was probably the best Fed Chairman of the past 50 years but he certainly wasn't going by Friedman's playbook.
Interestingly enough, Obama's presidency will prove to have been characterized by fiscal rectitude on a level last seen under Ike. The conflict between Obama and the Republican House over the past few years certainly has something to do with it.
And here's one that's sure to ignite a shitstorm.
Armstrong has a good writeup on one leftist economist that touches on the reasons why here:
http://armstrongeconomics.com/2014/04/13/thomas-piketty-another-economi…
economics is an empirical science. facts have a liberal bias.
I tend to attach myself to a more conservative approach when it comes to economic theory, especially monetary stimulus. I don't feel that the modern economy should include a true gold standard like Austrian economists believe, but some of the ideas the Austrian school holds are very interesting. Check out the Ludwig Von Mises Institute if you are bored and want to see the closest to a libertarian economic thinktank that I could imagine. I think Krugman is awful. They throw money at a problem and his solution is to always print more to throw at it. His pieces in the times is just an itemized attack on conservatives with little "theory" attached to it anymore. The problem with current economists is the fact that they have to jump on the theory bandwagon to be paid, and the liberal economists are in demand. As others have stated before, it doesn't hurt that their degrees are from liberal professors in Ivy schools. Their education is superb, but the doctrine is skewed. I think that if you truly have to break down both sides, either could be explained and supported in theory. Results can also be explained and manipulated to back up whatever result is wanted. It's no different than political arguments.
A mix of austrian and behavioral economics is the solution.
I think in the case of economics, liberalism and conservatism can be confused with political liberalism/conservatism. For example, trade liberalization calls for free trade and removal of trade barriers (tariff and non-tariff). Trade liberalization was a staple policy of a distinctly politically conservative Reagan/Thatcher administration (and the following conservative admins.). Likewise, Reaganomics featured ginormous tax cuts, which according to the article, are the opposite of what they deem conservative economic policies. Just wanted to make the clarification that economic liberalism is often times under the guise of political conservatism as the political right has come to swallow up many of these "neo-liberal" economic policies. Conservatism, in the context of the Bloomberg article, is still conservative but just very far right. The economic policies associated with Liberals are often painted as increasingly socialistic, which is another economic thought (depending on who you ask).
Some earlier posts certainly hit the nail on the head about economists being the products of liberal environments (read universities). Therefore they would be naturally more inclined to be left leaning. However, in general I don't think the narrative has changed too much - except perhaps in the media and in some states/countries. The article points out that the challenges of today are "inequality, economic insecurity, and the aftermath of a long recession" and suggests they are best solved by liberal (political left in this case) policies. Why? These problems aren't a result of conservative policies and are found throughout the world regardless of economic system. What seemingly is occurring is a cycle where economies and micro-economies (think states, cities) adopt neo-liberal policies to attract business/jobs then later more social policies to serve a larger, more diverse population, and are then back to neo-liberal policies to re-attract/attract more business. Not sure if that makes sense but I feel many things are cyclical and economics is no exception. This goes hand in hand with the changing of political leadership.
Also, I feel more economist and policy makers are starting to realize the entire foundation of Keynesian and Friedmen economics were impractical to begin with. For one, any economic model that relies on perfect conditions with no outside variables is best used for teaching - not making decisions for a multivariable economy. Truth is economists and policy makers don't always know the effect certain policies will have. Thus, other Economists like Schumpeter and Adam Smith are becoming more relevant with the new drive for innovation and competition. These economist do not base their ideas off perfect scenarios but rather explain already occurring phenomenas.
Truth in this. Perfect conditions and zero variables is a staple for economic theory. We don't live in a utopia, and the teaching of these models makes too simplistic a conjecture one way or the other. There are too many variables, outliers, conditions, etc. to not talk about the limitations of Keynes' and Friedman's work.
Totally agree. Anytime I hear anyone go on about Keynes or Friedman (which is rare albeit) I automatically throw their argument out. Their models hold as much weight as fairy dust. It's a fugazzi.
This isn't hard to figure out...most higher-education institutions are incredibly left-leaning, and its only their highest honor to churn out little Marxists.
Experienced this first-hand in undergrad. It's incredibly frustrating.
Really a shame too...a whole generation of mislead people entering the workforce with the wrong idea about how things work. Also...the unforeseen backlash...morons like Krugman make people think economics is useless. As with any science...if you use it poorly, then yes, it is useless.
This is true. The guy said that the U.S. was in an era of austerity while our deficits have racked up historical debts.
This is a great example of a political interpretation of economics. Krugman, sure, is a huge democratic party hack, but he also is a pretty good economist. He deserved the Nobel prize for his work on New Trade Theory.
This is very true, the Nobel prize is a joke and has been for a while. If only he could see how his name was being used now.
as an econ major i hate saying this, but most economists are like leaves in the wind. "all things equal" my ass. an economists job should be to recommend the policies the country is in need of and not what the political masters dictate. those who don't learn from history are doomed to repeat it so I hope the asshole economists who preach socialist ideals read a god damned history book about the supernova level devastation suffered by communist and socialist systems (you know who you are! Paul Krugman ... fuck you buddy!!!). Assholes like that are the reason chicken shit economic advisers think it's a good idea to introduce even more capital gains taxes. KEEP OFF MY GOD DAMNED POCKETS. I was already heavily taxed on the principal now you want more of my interest on top of the other 900 taxes I get my ass violated with? Fuck off!!!!!
you're an econ major and you think paul krugman is a communist?
you're an econ major and don't understand that raising capital gains taxes would allow us to lower individual and corporate rates
you're an econ major and you don't understand that raising the capital gains rates BACK TO the REAGAN era RATES is not the same thing as the government owning the means of production... remember, you are the one suggesting others read a god damn history book. maybe you could start a book club, 1st book on the history of taxation in the US.
finally, as an econ major, you should be able to recognize the fundamental difference between capital and labor..
...what the hell are they teaching in those econ classes? right wing ideology or econometrics?
Public policy progresses. The American Left knows that it can't just move the highest marginal tax rate from, say, 33% to 80%, so they move it up over time. I don't believe for 1 second that progressives will be satisfied to move the capital gains tax rate to 25%. If you really believe that then I've got oceanfront property in Arizona to sell you.
The Left has a relatively strong political strategy--expand the welfare state so that as many people as possible are dependent upon it and finance it via taxation of the least number of people. Case in point--"free" community college will extend the welfare state to the middle class and it will be financed only by high wage earners. Once the middle and lower classes are largely dependent on the state for their well being then the Left will be able to dominate politically like it has in Greece, where even the "conservatives" are more or less socialists out of political necessity.
So I think it's intellectually shallow (dishonest?) to suggest that the American Left simply wants to bump capital gains tax rates up or to simply raise marginal rates to a past time. The Left wants a social welfare state similar to Western Europe, and it can only be paid for through oppressive taxation.
point by point: 1. i am and i think he is a socialist at best (and clearly so are you)
no one is going to lower our income taxes; they want this in addition to everything else they get already; if you think differently then you need to read every speech the current administration has made on taxation to get over your ignorance
history of taxation: when were the us income tax rates the highest? during war time when it went to about 90% so that we could pay for war. we are in a middle of a war now which has no plans to slow and keeps getting more expensive. add on to that ACA and community college and whatever else they are talking about and the costs stack up. then think about these things some more and see if you still think they are raising the cap gains to reduce income taxes .... the only way if would be satisfied even with the current level of cap gains taxed is if the income tax rate was 0. Pick one and stick to it and stop double dipping. Government should only spend on the basics (defense, cops, firefighters, regulation and care for kids, elderly & vets to name the main ones) and the rest can be handled by private sector.
capital is the driving force behind labor; if someone didn't lay out the capital for a venture, labor would be sitting their ass down with no jobs; even ditch diggers need capital for the picks, shovels etc plus the land belongs to someone who spent capital to get it. while there might be differences in those two groups, one cannot function without the other and the value each derives from the respective activity is ALWAYS going to get taxed just a matter of how much and I think it's too much already
they gave us the facts and I used them to form my own views. that is how one learns as opposed to having someone tell you what to think which seems to be the norm these days.
but, im glad all the republicans here think Ronald Reagan was oppressive.
What a narrow ideological spectrum you have. I'm obviously pro-capital markets enough to work in finance and investments. Dr. Krugman won a noble prize studying the effects of international trade on domestic production. Is Gerald Epstein a socialist? Joseph Stiglitz? Or do they simply produce empirical research you disagree with?
So, the president is proposing $500 credit for each working person in a family, raising the cap gains rate from 23.8 to 28%, to a republican congress. What pound of flesh do you think republicans are going demand for cap gains? Dividend rates are probably off the table, which leaves corp and income. You don't show up to the negotiating table with a compromise, that will happen if its political feasible.
This is precisely what i mean: our current effective tax rates are the lowest in modern history. bush cut taxes massively during a war. maybe its time to pay the piper. income can be taxed up to 36% for sweating, while many are taxed just 22% for walking to the mailbox to cash a dividend check. every economic transaction is new event, so the fact you paid dividend taxes last year on money you re-invested this year is irrelevant. There is NO SUCH THING AS DOUBLE TAXATION.
i agree. but that's also irrelevant to whether or not there should be equitable distribution of taxes between capital and labor.
uh huh.
Finally, i should add, you can pay for this one way or another. Through EITC, food stamps, loan subsidies, pell grants, unemployment benefits, welfare, etc., or we can invest in a way that lowers the use of direct handouts, improves the general educational base for millions of younger workers, and offer people a path away from a lifetime of handouts by extending the educational promise we make to our citizens to the current job market.
scottyc just getting straight dominated on this thread . . . fucking love it
It took longer than I thought for this thread to explode. Wow
"Deficits don't matter" - Dick Cheney. Never heard anyone on the right wing complaining when things like that were said, and then magically in 2009 I couldn't escape it all the deficit hawks that materialized. Not a peep when when Bush was using the most politically convenient/easy portions of both supply side & Keynesian-ism (stimulus checks and unfunded tax cuts while a war is starting), without doing the unpopular counter-effects both schools of thought require (spending cuts, yes, defense counts, and building surpluses during boom-times for the latter strategy).
I have big problems with the economic policy of today, but this one-sided whining about how horrible things are strike me as completely overwrought.
ITT: People with no idea of Economics trying to discuss Economics
Obvious political biases are obvious.
What would be a good book to read so I can take a more informed stance? I had economics undergraduate coursework but only the basics and I really have no clue regarding economic theories I should espouse loudly over social media if I ever so choose to participate again. I am interested in both "left leaning" and "right leaning" perspectives.
Also, I never understand the inevitable vitriol that these threads produce.
If you are looking at modern economic theory, you can read Krugman, Hayek, Keynes etc. It's a good mix. Also on why economics gets so emotional, Robert Shiller's Animal Theory is a great commentary.
frattisimus101
Hell yea, appreciate the response. I am assuming it is "Animal Spirits" you are referring to? (After a quick google search)
Yeah, you got it. Sorry, I was half asleep when I responded.
This is a really good thread. I was thinking about this a lot over the summer.
All the Ivy's seem to teach this left leaning economics. My theory is that there is synergy between their poli-sci and economics programs and capitol hill.
All you really need is Milton Freidman and Ronald Reagan.
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