Classic smackdown of Mankiw, part one.
New Economic Perspectives
Mankiw Morality in a Mash Up with Mankiw Myths
William K. Black | Associate Professor of Economics and Law, UMKC
My comment there:
- Nice takedown.Alan Greenspan himself admitted making a mistake in assuming deregulation would not be taken advantage of by leaders who would undermine their own institutions owing to perverse personal incentives.Greenspan - I was wrong about the economy. Sort ofA perverse incentive is one that promotes rent-seeking, which is a form of free riding – in biological terms, parasitism. Neoclassical economics was designed to ignore or minimize the concepts of economic rent and rent-seeking that lie at the foundation of classical economics.Historically, this can be traced to a reaction to Karl Marx and Henry George’s success at the time in calling attention to rent, which is another name for exploitation where rent extraction involves unpaid work rather than simply criminal or corrupt behavior.The counter-attack was led by John Bates Clark, whose has been memorialized in conventional economic through the John Bates Clark medal. That’s right, they give a medal for this stuff!
