Man Without Qualities

Friday, November 08, 2002

We All Agree.... Don't We?

Arnold Kling, an economist, writes:

"Economists agree on many things. We are all for free trade. We are all more persuaded by Bjorn Lomborg than by Edward O. Wilson. We all believe that government support for scientific research helps the economy. We all support Lawrence Lessig in his attempt to overturn copyright extension (the Sonny Bono Act)."

The Man Without Qualities finds this statement more than passing strange.

It's not that MWQ isn't in favor of free trade. But Laura Tyson, who eventually served as chairperson of the President's Council of Economic Advisers under President Clinton, argued in her incorrect, highly influential and dangerously wrongheaded book, "Who is bashing whom?" , for a conscious policy of government aid to encourage US high tech industries. She asserted in that book that free trade was just a text-book myth and that it was meaningful that most of the world had gone over to a regime of "managed trade". She advocated forcefully government support to US-based and US-owned high tech industry. There is no doubt that Ms. Tyson is an economist of high credentials who does not favor free trade - at least in the full sense, and MWQ believes in any meaningful sense. It is simply absurd to write that all economists "are all for free trade."

And it's not that MWQ doesn't like Bjorn, for example. In fact, MWQ finds Bjorn - properly construed - highly persuasive. And I have said so. But Mr. Kling's assertion, as written, is simply preposterous. The category of people legitimately calling themselves "economists" - even "academic economists" - includes many of Bjorn Lomborg's most vicious critics. MWQ finds it hard to understand how a man of Mr. Kling's sophistication could write that economists "are all more persuaded by Bjorn Lomborg than by Edward O. Wilson." In fact, my personal experience is that most academic economists are essentially mediocre, liberal hacks, and it is hard to believe Wilson wouldn't win a vote of at least those economists in a landslide.

Do all economists believe that "government support for scientific research helps the economy?" Really? Even among the libertarians in the bunch? But, more generally, government sponsored research diverts - or at least deploys - some of the most valuable and scarce human capital any modern country possesses. Are we to believe that there is no substantial controversy among economists over whether it is efficient or otherwise beneficial to the society for deployment of such resources to be handled by the government? That's absurd on its face.

As to the curious - even bizarre - assertion that all economists "support Lawrence Lessig in his attempt to overturn copyright extension (the Sonny Bono Act)," it is worth noting that if this assertion is true it says more about the political structure of the country's population of economists than about the current state of economics. But are we to believe that no economists serve as consultants to the advocates of the Sonny Bono Act? Of course, after reading the "Economists Brief" filed by some very august economics worthies with the Supreme Court, one is almost compelled to note that Mr. Kling does not say here that all economists "support Lawrence Lessig" on the basis of any strong economics argument - since the economics in that brief is weak and highly incomplete, at best. Professor Lessig may just be a charming guy.


Musil says that Laura Tyson argued against free trade, so I can't say that economists are for free trade. Well, polls show that over 95 percent of economists are for free trade. And even Ms. Tyson seems to be proud of the pro-trade policies of the Clinton Administration in which she served.

He says that economists do not all support Bjorn Lomborg, citing one John Quiggin from Australia. Well, I take back the word 'all' and say instead 'all economists for whom I have respect,' or somesuch.

Musil says that he thinks the government should not support scientific research. He is entitled to his opinion, but if you were to take a survey of economists, I'll bet that you would find that over 90 percent think that the government should support scientific research. It is as classic a public good as national defense.

Musil thinks that the argument that economists make against the Sonny Bono act is weak. I find it compelling. The present discounted value to the creator of an extension of copyright from 50 to 75 years is close to zero. Therefore, the act does nothing to stimulate creativity. Makes sense to me. Sorry that Musil does not care for it.

MWQ RESPONSE TO ARNOLD KLING: Mr. Kling is a highly intelligent and gifted observer of economics, but in attempting to speak for the economics profession as a whole he errs in ways virtually anybody possessed of such a hubris would err.

Laura Tyson is now a professor at the Haas business school at the University of California at Berkeley on leave as Dean of the London Business School. She was previously at Princeton and, of course, sat as Chair of the President Clinton's Council of Economic Advisors (1993-95) and Chair of the National Economic Council (1995-97). She is quite articulate and has spoken firmly against free trade. Mr. Kling's statement that she is "proud" of her free market accomplishments demeans her through second-guessing: Her book speaks for itself. She is by no means an isolated voice. Indeed, her book and thinking have both had broad and pernicious influence in academia and government. She is definitely part of the "economics mainstream."

As for the reception of the economics profession to Bjorn Lomborg, it is not difficult to locate many economists who seriously oppose Bjorn Lomborg's thesis. Mr. Kling dismisses my example of John Quiggin as just "one Australian." But the reason I cite to Mr. Quiggin is that his writings collect the anti-Lomborg views of many other economists, especially views on the Kyoto Protocol:

Experienced debaters rarely commit themselves to an unambiguously false statement. So I was surprised to read Bjorn Lomborg's claim that 'the results of all major cost-benefit analyses show that doing Kyoto or something even grander is simply a bad investment for the world'. There are plenty of examples to prove him wrong.

Among the many economists whose work supports Kyoto is Jeffrey Frankel, a member of the Council of Economic Advisors under President Clinton. Frankel is cited by Lomborg for his work on economic growth, but his work on climate change is ignored. According to the modelling reported by Frankel, the costs of Kyoto would be about 0.1 per cent of GDP for developed countries. This is far below the range of $150 billion to $350 billion (0.6 to 1.5 per cent of GDP) cited by Lomborg.

Frankel is not alone. The Intergovernmental Panel on Climate Change cites a range of model estimates of the costs of implementing Kyoto using market mechanisms. They show that, with a global system of emission rights trading, the cost of implementing Kyoto would range from 0.1 per cent to 0.2 per cent of GDP.

Lomborg dismisses global emissions trading as politically infeasible because it would involve the redistribution of billions of dollars to developing countries (page 305). But then he turns around and attacks alternative ways of implementing Kyoto by suggesting that the billions required could be better spent - by redistributing them to developing countries.

To put the cost estimates in context, 0.1 per cent of Australian GDP is about $600 million per year. The economic benefits generated by the Great Barrier Reef alone are more than this, but, like reefs around the world, it is already being affected by bleaching arising from rising water temperatures. Interestingly, Lomborg promises to refute the claim that 'coral reefs are dying', but this issue is not mentioned in the chapter on global warming or, as far as I can see, anywhere else in the book.

Other economists argue that the benefits of doing 'something even grander' will exceed the costs. A recent paper entitled Climate Change:An Agenda for Global Collective Action, proposes a modified version of Kyoto which could achieve greater reductions in emissions while overcoming some political objections. One of the authors is Joseph Stiglitz, winner of the 2001 Nobel prize. Other notable supporters of action to mitigate global warming include Kenneth Arrow, William Cline and Paul Krugman. Lomborg gives 16 references to his preferred expert, William Nordhaus, but omits all these eminent economists.

Further, as the Anti-Lomborg Sitereports: "The Danish Ecological Council felt a more thorough response to Lomborg's book was needed. They therefore gathered a group of twelve Danish scientists - from science as well as economics and social science - publishing a critique (in Danish) in 1999. As of end June 2002, there is an English version of their work available. They are kindly making it freely downloadable from their website."

That anti-Lomborg book includes a very pretty picture of a cloud-laced blue sky as its first page and a chapter entitled "The World’s Future According to Dr Pangloss" by Hans Aage, Professor of economics. Additional examples of anti-Lomborg economists may be found here and here and here,, but the list could be greatly extended.

But one doesn't need first to do a search for anti-Lomborg economists to strongly suspect that they are probably out there in droves. As one commentator put it: The environmental movement does not defend "science," as editor Rennie would have it. Rather, it uses science as a weapon to advance the cause, as Charles T. Rubin put it in his Weekly Standard review. Most academic economists move in the comfortable, insultated, liberal world of academic communities - places in which the Kyoto Protocol normally commands much more respect than, say, the writings of Moses or Saint Paul. Even before doing a search, why would one presume that there are no (or almost no) "green" economists from such communities who are either convinced that Kyoto is good for the world, or willing to use their expertise to cobble together arguments supporting it? To see how far academic economists are willing to go in discarding the basic tenets of their profession to support a political end, it is worth remembering that during the Clinton administration an apparently sane full professor of the Princeton economics department published a study purporting to show that if the minimum wage (i.e. price of labor) were increased, then employment (demand for labor at the increased price) would also rise – AND THIS PREPOSTEROUS AND FRAUDULENT STUDY WAS NOT HOOTED DOWN BY THE ECONOMICS PROFESSION, although it was eventually discredited.

As to government-funded scientific research, I would find it remarkable if economists universally agree - or agree without substantial dissent - that government funded research is a "public good" regardless of the nature of that research and regardless of what resources (including human resources) are diverted from other sources. Do "all economists" agree that "all or almost all" government funded research in the old Soviet Union was a public good? The government is generally a highly sub-optimal agent of determining resource deployment - that's why "industrial policy" is a bad idea and contrary to basic principle of "free trade," which Mr. Kling thinks "all or almost all" economists support. Apparently it's a profession not troubled by internal intellectual consistency. One could assume the problems away by just concentrating on research that should be funded but which the private sector won't fund, for whatever reason. But that solves no interesting problem. [As an aside, the obvious untruth of Mr. Kling's assertion that "Musil says that he thinks the government should not support scientific research" is there for any reader to determine. What is at issue here is whether there is dissent in the economics profession over this issue, not whether MWQ believes the government should fund research.]

I have posted extensively on Professor Lessig's effort to overturn the Sonny Bono Act, and I will not say much more here. However, I will note that even Professor Lessig has withdrawn his argument that Congress cannot Constitutionally extend the copyright term prospectively from "life + 50" to "life + 70" - conceding that such a decision is not for the Supreme Court to make. (Professor Lessig's brief to the Supreme Court states at page 14:Nor do petitioners argue ... that “50 years are enough to ‘promote . . . Progress,’ . . . [but] a grant of 70 years is unconstitutional. Whether 50 years is enough, or 70 years too much, is not a judgment meet for this Court. ) But Mr. Kling's argument - and that of the Economists Brief - goes right over this cliff.

Mr. Kling is certainly entitled to replace his references to "all economists" with "all economists I respect" or the like (although my guess is that his e-mail from economists rather disinclines him to that move). But that would very much change the content of his assertion. Referring to the opinions only of those one respects can come dangerously close to a roundabout way of saying “I think.” It is quite easy to find near-unanimity in any population - even economists - if one treats it like a cocktail party at which one speaks only to one's friends.

I also note my complete disapproval of Mr. Kling’s reference to polls and percentages, which I do not believe are appropriate measures of the existence of substantial dissent in the economics profession. It is, after all, a profession based on ideas – not a mobocracy. Indeed, just prior to the rapid ascendancy of the Chicago School one probably could have determined by a poll that “all or almost all” economists were Keynesians – as Richard Nixon famously remarked. Does that mean that the little band on the Midway, many of whom have since been awarded Nobel Prizes for work done at or before that time, didn’t then constitute significant dissent?

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