I have let Greg Mankiw’s latest piece for the New York Times simmer in my brain for a few days, and now I have to let some of the noxious vapors escape.
Here’s what he says. Most economic choices are complex, with positive and negative effects on many parties. The utilitarian calculus, the greatest good for the greatest number, doesn’t work, because it means helping some people by hurting others. Unless there is a clear case of market failure—externalities—it is best to defer to the voluntary choices made by individuals in a free market.
What makes it difficult to respond is the multitude of errors and omissions in the Mankiw formulation. It’s hard to know where to begin, so let me just make a list. All of these are interconnected, of course, so the whole list is more than the sum of its elements.EconoSpeak
When the Scientist is a Bad Philosopher: Some Thoughts on Mankiw
Peter Dorman
4 comments:
"No one, he says, can reasonably weigh the competing claims of the winners and losers from a policy proposal."
And what is being "weighed" to begin with? What are the alleged trade-offs?
dont tell me, "how can we afford this as we are out of money! We need to prioritize as 'money' is scarce!... sorry, we cant afford it as we are out of money and dont want to borrow any more from the Chinese or our grandchildren!... too bad for you!... blah, blah..."
"No one, he says, can reasonably weigh the competing claims of the winners and losers from a policy proposal"
Mankiw isn't on the team and we aren't supposed to agree with him but his observation.. is basically what half of MNE political-econ is about. The political system and monetary system are not used to offset pareto inefficiencies because of corruption.
FTR I take the position its not because of corruption but rather stupidity.... rsp,
It is stupid. The corruption characterization is my libertarian bias. :)
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