When are Krugman and Mankiw just going to make out already, jeez

April 28, 2011 7:15 AM

Keynes v. Hayek Rap Battle: Round 2 (SLYT, about 10 mins) EconStories revives the econ beef to end all beefs. Previously.

Warnings: Tasteless cavity search joke at the beginning.

posted by dismas (32 comments total)

Oh, I should mention: via Greg Mankiw's blog.
posted by dismas at 7:18 AM on April 28, 2011 [1 favorite]

Is there a tasteful cavity search joke? Maybe one about dentistry?
posted by mkb at 7:27 AM on April 28, 2011 [1 favorite]

Hayek. As in High Explosives.

That made me laugh.
posted by three blind mice at 7:39 AM on April 28, 2011 [3 favorites]

I think these pieces are pretty even-handed (and funny), but I was pretty horrified reading the blog of the guy behind it.
posted by PlusDistance at 7:41 AM on April 28, 2011 [1 favorite]

Between the two we still have a serious problem with jobs for our citizens both now and in the years to come...To tell us that one or the other vision of economics will fix this is no longer
an argument I can buy.
posted by Postroad at 7:50 AM on April 28, 2011 [1 favorite]

PlusDistance - link is borked (points at metafilter). Hope you'll post it again, I'd be interested to see it.
posted by dismas at 7:51 AM on April 28, 2011

we still have a serious problem with jobs for our citizens both now and in the years to come

Such as: Now that robots exist, why do we all still have to work just to remain alive? One day a week of robot repair should be plenty.
posted by DU at 8:03 AM on April 28, 2011 [6 favorites]

They give the arguments fair shakes, sure, but emotionally this is anything but even handed. It's pretty misleading to keep painting Keynes as the darling when the Chicago School clearly held that role from the 80s until the crash.
posted by ropeladder at 8:17 AM on April 28, 2011 [5 favorites]

Loved it. I think the EconStories people are fairly preferential to Hayek (he even wins the boxing match) but they need to be in order to even bother matching the two up. Also, there's a lot in Hayek worth knowing about, and the most serious neo-Keynsian critiques start by granting quite a lot of Hayek and then caveating it just enough to make room for aggregation arguments again, usually in a kind of "only this one time, we promise," way. It's actually hard to see how close they are when all you do is read Krugman and DeLong (or whomever they're taking to task.)

Automatic stabilizers for the win.
posted by anotherpanacea at 8:20 AM on April 28, 2011 [1 favorite]

I do enjoy these videos but it is worth knowing that the guy behind them, John Papola, is a run of the mill anti-union libertarian.

From his blog: (I think this is where PlusDistance's link should have gone)

The public employee unions in Wisconsin are on the march. It is a march which reveals the true nature of these special interest labor cartels, organizations who collectively funnel more money into political campaigns than any private organization by a mile. It’s a grotesque display of insensitivity, ignorance and unabashed greed. It is a march by people whose only interest is maintaining compensation which already exceeds the average pay of the private community who fund them (via forced taxation). It is a march which demonstrates that selfishness and entitlement are concern number one, not the students who attend their (vacant) classrooms. It is a march which pits the special interests of a privileged few against democracy itself, as fully-bought-and-paid-for union cronies in the Wisconsin Senate flee the state rather than allow the legislative process by elected majority to take place.

posted by ChrisHartley at 8:39 AM on April 28, 2011 [3 favorites]

Ugh. Given the fact that these are made in cooperation with George Mason (one of the centers of Austrian Economics in the US), that's not entirely surprising (nor is Hayek's favorable treatment).

Gotta separate the author from the work, I guess.
posted by dismas at 8:41 AM on April 28, 2011

Big picture I guess there are things that are worse than white guy novelty rapping, like maybe genocide and stuff, but that's about it.
posted by BillBishop at 8:59 AM on April 28, 2011 [4 favorites]

Thanks, ChrisHartley, that's exactly the page I was trying to link to. Again, I think this isn't the typical right-wing hatchet-job attempt at humor. It seemed to be pretty even-handed and educational, at least to this non-expert.
posted by PlusDistance at 9:09 AM on April 28, 2011 [1 favorite]

I completely disagree with the positions the video takes, but it was surprisingly well made, both as a parody video and as an articulate bit of satire.

That said, who credits himself in a short as being an MD? Not even Ken Jeong could get away with that.
posted by Sticherbeast at 9:23 AM on April 28, 2011

Tyler Cowen's "Does the Welfare State Help the Poor?" is one example of the kinds of questions a Hayekian might ask. Agree or not, it seems like all Keynsians should want to know the answer rather than simply assuming it.
posted by anotherpanacea at 9:50 AM on April 28, 2011 [1 favorite]

Coming up: Kenneth Arrow v Milton Friedman, with a cameo by Albert Hirschmann.
posted by john wilkins at 9:59 AM on April 28, 2011

I think it's also worth pointing out that probably there is no area in all of economics where there feels like there's been so little progress made as there in our theory of the business cycle. (I'm an applied microeconomist who passed his macro prelim with a "pass minus", meaning just barely passed, so please take this sentence with a huge grain of salt). My reading of Keynesian economics is that as a theory of recessions, with its emphasis on coordination problems and/or sticky prices and the corresponding impact that has on production, it does a good job of explaining the output gap. So often, though, because these models are not readily testable - not because they don't make predictions that are testable, but because the conditions under which the theory would be convincingly falsified are so difficult to achieve when there is no credible counterfactual to be found - it's very hard to really rule out any of the other theories. So you end up with a lot of calibration exercises, or whatever, none of which is remotely transparent, or may be very susceptible to implausible underlying assumptions.
posted by scunning at 10:29 AM on April 28, 2011 [1 favorite]

My impression is that Keynes had a lot to say about our inability to judge risk; Hayek's strength is his critique of tyranny. But given 50+ years of effective welfare state policy in Europe, I wonder if Kayek might have changed his mind. It seems that Keynes was completely correct about risk.
posted by john wilkins at 10:38 AM on April 28, 2011 [2 favorites]

Economist bloggers I know of and my thoughts on them...
Mankiw is the worst.
Tyler Cowen (I think he's from GMU?) is also tending right/libertarian, but I think he's certainly more balanced and honest than Mankiw. He and Alex Tabbarok (sp?) share that blog of theirs. It's probably the only libertarian/right-leaning one I'll try to read.

I like Krugman, but he's still a bit too neo-liberal.
Stiglitz is right on in his critique.

Roubini is OK, but I'm not sure if he's a genius or just one of those clocks-right-twice-a-day kind of thing.

There's that George Washington guy? I *think* he has some good insights, but not sure.

Finally my favorite is Yves Smith. Maybe a bit heavily biased, and I don't agree with her, but at least she has a good critique in general.

And Mish? LOL. OK.
posted by symbioid at 10:38 AM on April 28, 2011 [3 favorites]

Needs Busta Rhymes as Ludwig von Mises.
posted by ryoshu at 10:43 AM on April 28, 2011 [1 favorite]

Only people who know nothing about the history of poverty or the welfare state can ask a question like "Does the Welfare State hurt the poor".

Britain's had a national welfare state of some kind or another since c1600; many European cities had organised relief before that. The people who fell through the cracks of these systems were the ones who ended up dead in a ditch of starvation. The improvements to these systems is the reason why more poor don't end up dead in a workhouse of malnutrition.

That's where the poor would be today without a welfare state - dead in a ditch, possible kicked under the hedge so they that they don't lower property values.
posted by jb at 10:49 AM on April 28, 2011 [7 favorites]

is a run of the mill anti-union libertarian.

Most libertarians, at least in my experience, aren't anti-union per se. You have the right to associate freely, and organization is how labor balances against capital.

At most, they're anti-union with regard to government work, which is demonized to an extraordinary degree in those circles, largely because it's not under competitive pressure, and can expand its remit endlessly. If the union demands more money from the government to provide services, there's no OTHER, more efficient government that citizens can switch to and put the inefficient government out of business. And looking at the many utterly dysfunctional bureaucracies in the Federal government, they do have something of a point.

Personally, I'm not really sure what I think. I'm torn between competing arguments. The one thing I can be really sure of: whatever parts of libertarian thought get adopted, you can be absolutely certain they'll be tuned for maximum destructiveness of the private citizen. We have a truly amazing ability to 'compromise' by taking all the worst features of the various schools of thought and rolling them into an obscene mess.

Riffing on that old joke about cooking, in Hell, you have Republicans in charge of foreign policy, Democrats in charge of fiscal responsibility, and Libertarians running consumer and labor protection.
posted by Malor at 11:11 AM on April 28, 2011 [1 favorite]

Hayek was generally in favor of nationalized health insurance. You have to pretty far right, further than Hayek to be against nationalized health insurance. That said, most of the Hayek fanboys haven't taken the time to read him. They just know that generally his position is that you should screw the poor and that's all they need to know.
posted by Freen at 11:19 AM on April 28, 2011 [7 favorites]

Libertarians commonly oppose closed shop compulsory union membership and support "right to work" laws. In practice these laws are a debilitating or perhaps mortal blow to unions so I would consider their advocates to be anti-union.

Some would argue that workers remain free to associate and organize but in reality unless membership can be made compulsory the free-rider problem will hobble unions to the point where they can not function as a balance against capital. Sort of like how voluntary taxes don't really work to pay for civilization.
posted by ChrisHartley at 11:49 AM on April 28, 2011 [2 favorites]

Between the two we still have a serious problem with jobs for our citizens both now and in the years to come

I am under the impression that Keynes hasn't really been tried this time, except to the extent that the stimulus staunched the hemorrhaging of jobs.
posted by zangpo at 11:51 AM on April 28, 2011

Only people who know nothing about the history of poverty or the welfare state can ask a question like "Does the Welfare State hurt the poor".

Only ignorant people ask questions? RTFA.
posted by anotherpanacea at 1:02 PM on April 28, 2011

It's strange that mostly we understand that social sciences - including economics - have a short life-span but still we discuss wether Keynes or Hayek was right.
A reasonable point of view - or argument - could be that both have contributed significantly to economics. However, current reality necessitates new theory, theory which includes and compares current practice. How do we deal with an economy like the American, where there is no longer any significant connection between real production and wealth? Or how do we deal with several third world economies, where more than half the economy is (legitimately) outside formal economy?
Both real situations make the argument between government intervention and free markets rather absurd.
BTW - my own pow is that the welfare state, or rather: a collectivist viewpoint, is a good thing. I just don't think the argument is good on any side of classical economics.
posted by mumimor at 1:28 PM on April 28, 2011

anotherpanacea: I read Cowen's article. If I understand correctly, he acknowledges that income redistribution does indeed help poor people.

Cowen then raises two counter-arguments. One is to bring in future generations: he argues that income redistribution will slow down economic growth (he doesn't attempt to quantify this), and therefore hurts poor people in the future. This argument seems weak to me: given that we expect economic growth to continue (based on both capital accumulation and technological improvements), future generations will be richer than we will. In addition, there's evidence that the supposed positive relationship between inequality and growth is weaker than previously believed.

Cowen also argues that the restriction of income redistribution to national boundaries isn't logically justified by utilitarianism. This is also weak. Our responsibilities to our fellow citizens are greater than our responsibilities to people in general. Michael Ignatieff:

In practice, the claims of ethical universalism came to be strongly limited in Christian teaching and then in European natural law by the injunction that a rich man had a merely voluntary charitable obligation to strangers in need. In more general terms, a descending order of moral impingement came into place: the claims of kith and kin first, then neighbors, co-religionists, co-citizens, and only at the very end, the indeterminate stranger. To this day, the claim of the stranger--the victim on the TV screen--is the furthest planet in the solar system of our moral obligations.

posted by russilwvong at 1:39 PM on April 28, 2011 [2 favorites]

russilvwong: looks like a good summary to me!

Cowen may well be wrong, but he's not stupid. He clearly loves ambiguity, so he likes being able to say that both the conservatives and the liberals are wrong.

I only mention him because I think he's writing from a Hayekian perspective. One thing I like about Hayek is that he raises important questions about why our very expensive welfare state is so bad at helping the poor. As they say, "The System's Purpose Is What It Does." If the welfare state primarily benefits the middle-class professionals who staff it, then that's probably deliberate. We could easily design a better welfare state that was significantly more helpful to the poor (like lots more direct cash transfers that are a lot bigger than the current ones, i.e. a basic income! Cue my broken record.) But we don't do that: instead we create lots of administrative jobs that require a college education to determine who qualifies for benefits, or to distribute the benefits we think that poor people ought to want instead of the things that poor people tell us they want.

Meanwhile, we get to order the poor around using the machinery of the state, telling them what they're allowed to do and not to do, what they should eat, drink, and enjoy, where they should live, how much they should exercise, whether they should have children, etc. In both cases, we end up employing lots of people like ourselves, and the benefits to the poor are a kind of afterthought. The System's Purpose Is What It Does.
posted by anotherpanacea at 1:52 PM on April 28, 2011 [1 favorite]

"Riffing on that old joke about cooking, in Hell, you have Republicans in charge of foreign policy, Democrats in charge of fiscal responsibility, and Libertarians running consumer and labor protection."

The reason this joke doesn't work for me is that the Democrats, despite their many, many failings, seem to be significantly (like, night and day) better at fiscal responsibility than the other two parties named.
</humorless> </derail>
posted by You Can't Tip a Buick at 2:28 PM on April 28, 2011 [3 favorites]

One thing I like about Hayek is that he raises important questions about why our very expensive welfare state is so bad at helping the poor.

Well, emphasis on *our*, there. Australia's welfare system is good verging on excellent, as are many other countries. I don't think you need to look at complicated mechanisms or philosophies to see where America's went astray: Special interests, rent-seeking, and a poorly disguised oligarchy cover it pretty well.

That all said, the welfare even a country like the US has currently is paradise compared to Victorian or Pre-Victorian Europe, and thus arguably very successful in its way. I'm not sure anyone can argue that a welfare system is "very expensive". Certainly, it is compared to nothing, but that's a somewhat redundant comparison, imho. Everything with a cost is expensive compared to nothing.
posted by smoke at 4:33 PM on April 28, 2011 [1 favorite]

anotherpanacea: " If the welfare state primarily benefits the middle-class professionals who staff it"

hrmm... I dunno, do you really think the people who staff welfare offices are particularly doing pretty hot and that's the reason it exists... The actual number of people involved in running the thing is probably pretty minuscule, all things considered.
posted by symbioid at 6:34 PM on April 28, 2011