May I Have My Context Back, Please?

Ummm... Greg? Greg?! GREG!!

Greg Mankiw writes:

Greg Mankiw's Blog: More on Inequality: Ben Bernanke gives a talk on inequality, concluding that

the challenge for policy is not to eliminate inequality per se but rather to spread economic opportunity as widely as possible.

By contrast, Brad DeLong concludes

An unequal society cannot help but be an unjust society.

These quotations go to the heart of the policy divide behind right and left. The key question: To what extent is inequality of outcomes a source for concern in and of itself? People will always differ in productivity. Should policymakers act to offset these innate differerences, or should their goal be to give everyone the same shot and not be surprised or concerned when outcomes differ wildly? To a large extent, policymaking often comes back to Rawls vs Nozick.

And quoting often comes back to giving the reader the proper context.

Greg shoulda quoted my whole paragraph. It says:

An unequal society cannot help but be an unjust society. The most important item that parents in any society try to buy is a head start for their children. And the wealthier they are, the bigger the head start. Societies that promise equality of opportunity thus cannot afford to allow inequality of outcomes to become too great...

Jeebus.

Comments

[tom s.]

Brad DeLong says: "The most important item that parents in any society try to buy is a head"
He also says "And the wealthier they are, the bigger the head".

How can you believe anything the man says?

[PJ on WI]

Is this sloppy thinking or downright dishonesty? Should we stop trusting what Mankiw says? I guess that the fact that I'm asking the questions is answer enough.

[Bruce Wilder]

Great inequality, which arises from decreased social mobility and increasing financial risk imposed on households in the poor and middle class might be supposed to threaten the scheme of distributed decision-making, which drives the economy toward efficient solutions.

Increasing the frequency in which personal and family investment decisions, regarding education, career and small business formation, are either excessively conservative or excessively desperate, might be supposed to reduce the efficiency with which the economy operates. The destruction or erosion of institutions, which provide "insurance" in various forms, might be supposed to threaten the dynamism of the economy.

Personally, I'd be less concerned about Mankiw's respect for context, and more concerned about whether his ideology makes him an untrustworthy narrator of economic science.

[jerry]

Look, I don't understand all those high falutin economic words, but Bernanke also said this extremist radical left commie pinko stuff:

http://www.federalreserve.gov/BoardDocs/Speeches/2007/20070206/default.htm

"we also believe that no one should be allowed to slip too far down the economic ladder, especially for reasons beyond his or her control. Like equality of opportunity, this general principle is grounded in economic practicality as well as our sense of fairness.

...

If we did not place some limits on the downside risks to individuals affected by economic change, the public at large might become less willing to accept the dynamism that is so essential to economic progress."

Do I understand Bernanke's speech right? Because it sounds dangerously close to the abridged and parafarmed version of what DeLong's has been claimed to have said. But again, I never understand what you economists are saying.

I detect perhaps one difference. Maybe it is that DeLong wishes to do this for moral reasons to help raise others up, and perhaps Bernanke only wants to do this for selfish reasons to ensure the help doesn't revolt and Karl Rove's kid doesn't have to pick fruit. But I maybe reading too much into that.

Should someone tell Mancow that Bernanke is a red diaper doper baby?

[howard]

prof, how many times do we have to tell you: mankiw sold out his birthright as an economist for a mess of bush administration potage. i didn't really know much about him before, but i'm willing to believe he was a perfectly fine and capable economist, but now? he has allowed the rightist tinge to enter his thinking and writing, and there's no turning back....

[bigTom]

"I detect perhaps one difference. Maybe it is that DeLong wishes to do this for moral reasons to help raise others up, and perhaps Bernanke only wants to do this for selfish reasons to ensure the help doesn't revolt and..."

Actually in the best Adam Smith kinda way it doesn't really matter. Besides it is not rare to find people motivated by one of the other reasons, but profess the other. This goes both ways, I know there have been times I'm motivated moralistically, but feel a practical only argument is sufficient to argue the point.
Once a conservative hears something remotely bleeding heart -they become immediately negative and tune you out -so this might even be a winning tactic.

[tom f]

My reaction to Mankiw here is often my reaction to libertarian/right-wingery thought. Mankiw here seems the need to explain the libertarian/liberal ideological split. We get it. We've heard the intellectual premises of economic liberalism ad nauseum.

What Mankiw is saying, well, I always assume that people in the thinking business are done with that level of analysis by the time they enter high school. I always assume everyone, conservatives as well as liberals and Marxists etc.. -that is the intelligent ones, the folks that go on to read, research, and write for a living- go on to explore the premises. Look for empirical support, philosophical ramifications, etc.

Look, here's Mankiw:

"People will always differ in productivity. Should policymakers act to offset these innate differerences"

He's still in grade school, simply assuming his premis. Did you see him sneak it in there? Here's an example:

Dad gets to work faster than mom. Thus, dad must have a faster car.

Mankiw's above statement appears complacent with this tee-ball league reasoning.

We get it, we understand you believe that differential income is chiefly the result of innate differences in effort and intelligence. We have heard it for (our age - 15 years). Why are the Mankiw's still telling us this. It's time to engage in discussion, inquiry,...in a word, THOUGHT.

The point generalizes: why don't ideologues get bored with their formulations? It's as if complexity can't occur to them. It's like that movie "Momento". Ideologues will start to investigate, start to question. Hmmm, maybe wealth and its creation can also be understood as a social phenomenon. Maybe the individual level doesn't always explain inequality very well. It's not that inquiry doesn't take place, but you go just so far into THINKING and then...blackout...everything starts over:
"People are rich because their contributing to society more"

Dear Prof. Mankiw,
Blah blah blah. Once you've peeled off those who are fit for indoctrination only and you are bored with knowing everything (badly), then we can talk.

The problem isn't only that Mankiw took his target out of context. He did it merely so he could start over again. Awaken afresh as if no one had heard his ideology. As if no questions had ever been asked.

[tom f]

Kenji:

"Frankly, I don't see how the paragraph you picked weakens Mankiw's point."

If the dynamic Prof. DeLong describes is real (hint: it is), then inequality is self-reinforcing. Wealth creates a positive feedback loop. Hence questions of “innate differences” and “equality of opportunity” become less and less useful questions to ask. Such questions assume that positive feedback doesn’t occur.

Why assume that Mankiw ignores positive feedback? Intellectual tradition and political context. “Giving everyone the same shot” and not reacting when “outcomes differ wildly” never translates to subsidize those without DeLong’s “head start” (except in token form). It never means impeding the means by which the positive feedback gets established (again, tokenism excepted).

In the most corrupt form of politically-expedient libertarianism, it also means a polite silence while the positive feedback becomes amplified by government policies (see defenders of Bush’s economic agenda).

[mrjauk]

This is patently dishonest on the part of Mankiw. He could have been more clever, by simply leaving out the words "of opportunity". Instead, he is simply dishonest by added the words "of outcomes".

Moreover, and related more specifically to Brad's point about the injustice of some kids having a better head start than others, Milton Friedman himself agreed with Brad on this one. Give all children an equal start and then let the cream rise to the top; it's not only just, but would produce better societal outcomes. There's a reason why my small business-owner friend hires (solely on the basis of what's best for his business) graduates from the non-flagship UCs with 3.5 GPAs rather than Berkeley/UCLA/UCSD grads with higher GPAs.

[piotr]

Pablum: People will always differ in productivity. Should policymakers act to offset these innate differerences, or should their goal be to give everyone the same shot and not be surprised or concerned when outcomes differ wildly?

Innate differences in productivity? Why "productivity" of CEOs was rising so much faster than their employees? Or to give another example, if X and Y are equally astutute stock pickers but X makes 200 times more because he has 100 times larger capital and consequently smaller transaction costs per trade, can afford lawyers to design intricate tax shelters etc. What is "innate" in advantages of X over Y?

It is one thing to admit that capitalism needs, well, capitalists, and thus a large degree of inequality, and another to worship the capitalists as "the most productive members of the society, due to their innate characteristics". Moreover, having a combined local/federal top tax bracket at, say, 50% (I guess that was Clintonian level in places like NY and CA) would not lead to any Communism, it merely allows the rich to contribute to the common goals of the society in accordance to their abilities.

[Far Away]

The research I have seen suggests that in most countries intergenerational inheritance of economic status is greater at the two ends of the distribution.

That is, the children of poor parents are more likely to stay poor and the children of rich parents are more likely to stay rich than the children of parents in the middle are likely to end up in the middle.

Put another way, most of the mobility - both up and down - is in the middle 50 to 70% of the distribution. The downward mobility for the middle and (much less commonly for the rich) is the source of the insecurity that Bernanke refer to. It would be interesting to see studies that confirm whether or not this has increased as a result of globalisation.

This suggests to me that public policy has to think about 3 potentially different areas of action. First, work out effective ways of ensuring that the children of the poor have the benefit of early interventions so that they can eventually enter the labour market on the same basis as the middle. Second, think of innovative ways of cushioning the downside risks for the middle. Third, work out good ways of ensuring that the really rich contribute in line with the extraordinary benefits they have received in their lives.

[pipo]

Not being sarcastic (I'm all for Brad, and not really like Mankiw), but will someone please explain how does the context change the meaning of Brad's words? Although I am an economics graduate, I really don't understand.

[d-slam]

Tom F: great post. That was my response to the Mankiw quote ('conservatives believe this, while liberals believe that'). Blah blah blah. This is insightful political philosophy from a bigshot economist? It sounds as though Mankiw is deliberately dumbing down the debate so that the kinds of questions you pose cannot even be asked or thought about. I have a Master's in Economics (terminal, not a PhD booby prize), and that was the conclusion I left with: Economics strives to "know everything", and is very content, proud in fact, to know it very very very badly in a shallow way. It is a sickening sight.

[Slocum]

Brad is assuming that an unequal society can only come about because of unequal access to proper 'head starts' for children, and that, therefore:

1) Growing inequality must mean growing unfairness in educational opportunities, and

2) Reducing unfairness in access to educational opportunities will necessarily reduce inequality

I sort of wish I believed that, but I'm afraid I can't. In the U.S. rates of participation in higher education have grown as inequality has grown. And growth in inequality has been most pronounced among the most educationally advantaged groups in the population (e.g. the top 1% vs the rest of the top 10%).

But, precisely because the growth in inequality doesn't derive from an expansion in the 'head start gap', inequality doesn't worry me as much as it does Brad. I don't begrudge Page and Brin their billions, because I think that having a system that is able to produce that kind of massively valuable enterprise in the space of a few years is well worth the trade offs involved.

[Jonathan Goldberg]

Pipo:
One way to put the problem is that Mankiew is proposing a conflict between deLong and Bernanke that does not exist. Bernanke advocates spreading economic opportunity. DeLong's point is that spreading economic opportunity even approximately equally cannot, in the nature of things, be done if the society in which opportunities occur is too unequal.

DeLong proposes not to eliminate inequality but to mitigate it, probably by establishing a floor, especially in the environment experienced by children (I am putting words in DeLong's mouth at this point, and I appologize if I'm wrong).

The bald out-of-context quote *suggests*, without coming out and saying it, that DeLong wishes to eliminate inequality tout court on unspecified, but presumably mistaken and/or immoral, grounds.

[theCoach]

Mankiw does not deserve the attention Brad lavishes on him. Mankiw fails the test for a legitimate speech act - he is not coming to the table in good faith and should be ignored. For what he has done as a lieutenant in the Bush cabal he should be shunned. And as an ironic example of fixing market failures the huge multi-billion dollar externalities that he has cost US tax payers by doing his job so poorly should be applied as a tax against his personal wealth and future earnings.

[Gerard MacDonell]

Brad Delong and Greg Mankiw should be debating this. The Congress should be debating this. The Chairman of the Fed should not.

I am surprised this point is not raised more often. I guess you folks care more about the content than the form, which is understandable. But still, why let pass the opportunity to bash Bernanke for wandering beyond his official competence and weakening the Fed's claim on political independence?

[anne]

"But still, why let pass the opportunity to bash Bernanke for wandering beyond his official competence and weakening the Fed's claim on political independence?"

But still, duh, this is precisely the official competence of Ban Bernanke, duh, as Federal Reserve chair, duh, and this strengthens the Fed's claim on political independence, duh.

[anne]

"But still, why let pass the opportunity to bash Bernanke for wandering beyond his official competence and weakening the Fed's claim on political independence?"

Never ever let a chance for radical-conservative intimidation to go by unchanced, duh. Bash, bash, for that is what radical-conservatives do, they bash.

[Jon Fernquest]

"the challenge for policy is not to eliminate inequality per se but rather to spread economic opportunity as widely as possible" vs. "An unequal society cannot help but be an unjust society."

What about:

A society with **unequal opportunities** cannot help to be an unjust society.

If people want to spend their free time or slack time at work playing solitaire then let them, but it's reasonable to assume that they will fall behind, income wise or position-wise.

Google's policy of alloting 20% to research is innovative and allows for a little Shumpeterian creative improvement to work processes or products.

Age discrimination has to be overcome, but more educational skill upgrade opportunities should be provided, perhaps through exams and self-study, thus avoiding a lot of overhead. When I was a graduate student in the engineering school at Stanford way back in the 1980s, companies like Hewlitt Packard had employees taking a master's degree from corporate headquarters and this was before the internet (ARPANET actually).

I've worked both as an IT consultant and as a permanent employee. Consultants are often sent in, like relief pitchers, to get something finished quick, a productivity injection, if you will. As a permanent employee I've always loathed the way things so often settle down to a monotonous, unquestioned routine, with everyone positively discouraged from dreaming new ways to inject life and energy into situations. Management often tries to reenergize a situation, but it really has to come from the worker him or herself. Work can be a source of interest and excitement, or it can be drudgery that you resist.

There are some huge divisions within small software companies that management bridges like sales and development. Jobs are a lot like financial assets, for example the sales force (and executive management in a small firm) often has a high beta and vulnerability to the business cycle and therefore the return is higher. If you're a programmer tech type, you have a lower beta and lower but more predictable compensation, you sit in your cubicle everyday slowly but surely accumulating technical knowledge to maintain your value (unless you're an ADA programmer in a large aerospace firm at the end of the cold-war at which time major adjustments had to be made).

It's the lack of opportunity that can be unjust. And also lack of adequate of adequate knowledge about those opportunities. So families with parents with intimate knowledge obviously have children with an advantage. They grow into adults who still aren't aware of the opportunities. Teachers are the only one's in a position ultimately to break down these barriers and provide knowledge of opportunities.

[Barkley Rosser]

theCoach,

For better or worse, mostly the latter, Manki's is the third most read economics blog, and I think his principles text is the biggest selling one around as is his intermediate macro text. The guy is very influential, which means that his apparently harder turn to the ideological right since serving in the Bush disaster is an unfortunate development.

[d-slam]

"Why should our elected officials be excluded from making vital economic decisions?"

The fear is that they will make decisions (ie print money to pump up the economy) in order to get themselves re-elected, even if those decisions cause trouble (inflation) down the line. The fear is that the electorate is short-sighted enough to fall for this (and that is probably correct), therefore the only way to have competent monetary management is to set things up so that a Bernanke (who is presumably competent and has the long-run interest of the country at heart) doesn't have to win an election against a smooth-talking populist (whose horizon, by natural selection, does not extend beyond the next election.... those who choose policy to maximize chances of winning the next election usually will).

[d-slam]

anne: "But still, duh, this is precisely the official competence of Ban Bernanke, duh, as Federal Reserve chair, duh, and this strengthens the Fed's claim on political independence, duh."

Not sure I agree. The Fed's mandate is to control inflation and boost output and employment. Period. Inequality is not part of their mandate. Although Bernanke's personal opinions on inequality might be of interest, as he's a pretty good economist, it is not currently his job to think about those things. Redistribution/education/etc are fiscal matters, not monetary matters (it seems to me).

[anne]

D Slam

Nicely argued.... The mandate of the Federal Reserve is to assure a reasonable general price stability and stimulate employment. A reasonable tendency to economic opportunity makes the Federal Reserve objectives increasingly possible to accomplish. A shutting away of people from economic opportunity, makes for increased economic instability.

After 2000, for instance there has been a dramatic loss of employment benefits for middle class workers; especially so for health care benefits. This will limit our growth potential over time, making Fed policy more problematic.

[Larry]

Mankiw is just auditioning for a job at the Weekly Standard.

See for example: http://www.slate.com/id/2159575/

[ken melvin]

Should a nation's government employ policies that promote inequality?

[anne]

Gerard,

I understand the concern for Federal Reserve political independence, but, this is only possible to the extent to which fiscal policy allows for simple Fed induced economic growth cycles. When Robert Rubin, Brad DeLong and others at Treasury disigned policy to limit debt growth in the 1990s, they allowed Alan Greenspan to experiment with lower short term interest rates that wonderfully stimulated employment.

[Jon Fernquest]

d-slam: "...The Fed's mandate is to control inflation and boost output and employment. Period. Inequality is not part of their mandate..."

To refresh your memory:

"...In that alternate universe, a group of Harvard economists headed by Joseph Schumpeter were brought down to the White House to advise Herbert Hoover what do about the banking crisis in the winter of 1933. They argued that banks are failing because their fundamentals are unsound, and that it would be improper to rescue bankers who have run their businesses into the ground or depositors who have not been prudent enough at watching the character of the people with whom they have deposited their money. Supported by the articulate Treasury Secretary, Andrew Mellon, they carried they day: "Liquidate labor, liquidate stocks, liquidate the farmes, liquidate real estate," said Mellon. A full-fledged panic would not be a bad thing: It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people..." But the consequence was not people working harder and living a more moral life. Instead, the consequence was an intensification of the Great Depression as the transmission channels analyzed by Ben Bernanke (1983), "Nonmonetary Effects of the Financial Crisis in the Propagation of the Great Depression," grew much stronger than they were in our actual history.

As more and more banks failed and more and more of the deposits of Americans vanished, the downward spiral of economic activity continued through 1933, 1934, and 1935. Increasing economic uncertainty and fear drove an acceleration of gold outflows from the U.S. accelerated throughout 1933 and 1934. The Federal Reserve--itself under Mellon's, responds by following gold standard orthodoxy: an outflow of gold is a sign that your interest rates are too low and need to be raised. Contractionary open market operations to raise interest rates further reduced the money stock, and this falling-money-stock channels for the intensification of the Great Depression that was stressed by Milton Friedman and Anna Schwartz (1963), A Monetary History of the United States, grew much stronger than they were in our actual history."
http://delong.typepad.com/sdj/2007/02/arnold_kling_vs.html

[Padraig]

"The fear is that they will make decisions (ie print money to pump up the economy) in order to get themselves re-elected, even if those decisions cause trouble (inflation) down the line. The fear is that the electorate is short-sighted enough to fall for this (and that is probably correct), therefore the only way to have competent monetary management is to set things up so that a Bernanke (who is presumably competent and has the long-run interest of the country at heart) doesn't have to win an election against a smooth-talking populist (whose horizon, by natural selection, does not extend beyond the next election.... those who choose policy to maximize chances of winning the next election usually will)."

I wonder if it isn't time to reevaluate our assumptions about that particular danger. Clearly there are dangers to an unaccountable Fed Chair - some might argue that their concentration on Inflation targeting over employment is a result of having to please their base (the technocrats and the elites) over the masses. If we accept that technocrats, while explicitly proclaiming their independence (and most likely in good faith believing it), are as motivated by individual, social, and class concerns as others, then we may well worry that having an independent Fed produces distorted outcomes, from a democratic perspective.

But, can we have a political Fed, and protect ourselves from the aformentioned dangers? Let's consider the press - if the media is expected to cover changes in Fed policy, then a combative media would be able to point out to the public where Fed changes were primarily political, and even economically dangerous. This might well work to temper the populist appeal of unnecessary "money shots": the benefits of such an economic boost are not immediate and direct for most voters, so it should not be hard for them to find an alternate abstract argument persuasive (that increasing the money supply adds to inflation, making their money worth less), especially when that argument is backed by the elites with all the voice of authority. The media can take on the role of actually informing the public, so that they can make rational decisions regarding politics and economics. In this way, the media can allow more of government to be controlled by the voters, not technocrats, while mitigating the loss of efficiency we would otherwise get.

Of course, this plan requires a combative press, and that is precisely what we don't have. But, with all the scandals coming out now in the media, a major restructuring cannot be far behind, and hopefully we can use that moment to move the press in a combative direction - one which honestly allows for a more democratic society.

[theCoach]

Barkley,
I would have no problem with Mankiw if he stuck to writing Textbooks. If he will compensate US Citizens for the damage he caused (out of generosity I will limit it to 1 billion US dollars), and in the case that he cannot pay that at this time agree that his current wealth and all of his wages above the minimum wage be taken to cover that, I will forgive him for his past.
If I am being too generous, let me know. thanks.

[wetzel]

Libertarians don't really see the distribution of wealth as a question of justice. Economic justice for a libertarian is when the distribution of goods reflects the free transactions of individuals.

Friedman taught libertarians how to use utilitarian arguments, but it is pure sophistry.

Free market utilitarians like Brad always seem surprised when their libertarian colleagues, with whom they seem to have so much in common, turn out actually not to share their goals.

[Slocum]

"Libertarians don't really see the distribution of wealth as a question of justice. Economic justice for a libertarian is when the distribution of goods reflects the free transactions of individuals."

No -- libertarians don't think any old distribution of wealth that the market produces is just. It's not OK for people to starve or die of treatable diseases or go uneducated because of poverty.

But libertarians are extremely skeptical of those who slip into 'lump of wealth' thinking where the great issue is how to divvy up shares of 'the pie'. Libertarians are far more interested social and economic structures that enhance the generation of new wealth. People have not been lifted out of poverty by thinking that focuses on distribution of a fixed lump of wealth--that kind of thinking has condemned billions to lives of the most miserable poverty. Which is why, for example, that DeLong has said:

"I can easily envision changes that would have enriched nations now in the poorer South: the promotion of Deng Xiaoping to the post of China's paramount leader in 1956 rather than 1976 would certainly have done the job for China."

[PaulGBrown]

Slocum -

Have you actually read any libertarian writing?

The precis for libertarianism is rights. My rights. Your rights. And the associated responsibilities.

Libertarians hold that I am free so long as my exercising my liberties doesn't intrude on anyone else's ability to exercise theirs. Libertarians conclude that it's PERFECTLY "OK for people to starve or die of treatable diseases or go uneducated because of poverty." If some individuals want to extend charity, then that's up to them. But such charity lies outside the range of questions libertarian thinking raises. Ask me some fridays and I will tell you that such a position is a really good one.

Really. Read The Fine Wikipedia.

http://en.wikipedia.org/wiki/Libertarianism

Or Rand.

[Slocum]

"Have you actually read any libertarian writing?"

Yes, certainly. I read Reason quite regularly, and Marginal Revolution among a number of others. I must've somehow missed the posts and articles where they suggests it's perfectly OK for poor people to starve in the cold.

[bernard Yomtov]

"libertarians don't think any old distribution of wealth that the market produces is just. It's not OK for people to starve or die of treatable diseases or go uneducated because of poverty."

I think they do. To suggest otherwise is to say that libertarians support government programs to prevent these outcomes. My impression is that they do not in fact support such programs.

Unlike PaulGBrown I never think such positions are good. They are loathesome.

[ken melvin]

Can anyone name one, one instance where libertarian philosophy has been successful? Most didn't understand how allied the Reagan administration. It's godawful what libertarianism hath wrought upon the US. Imagine if were to gain more power. Nothing Sinclair wrote would come close.

[Slocum]

"libertarians don't think any old distribution of wealth that the market produces is just. It's not OK for people to starve or die of treatable diseases or go uneducated because of poverty."

I think they do. To suggest otherwise is to say that libertarians support government programs to prevent these outcomes. My impression is that they do not in fact support such programs.

-----

Complete nonsense. Take education for example. Many libertarians favor vouchers over the existing public school system. But they do not favor forcing every family to pay out of pocket for schooling and allowing children of poor families to grow up illiterate. Or consider the minimum wage -- libertarians prefer the EITC (a form of the libertarian patron saint Milton Friedman's negative income tax) over the minimum wage. But they favor it on the grounds that the EITC is directly targeted toward providing support for poor families, while the minimum wage is not. Many libertarians favor Pigovian taxes to address negative externalities:

http://gregmankiw.blogspot.com/2006/12/pigovian-questions.html

Libertarians favor individual retirement accounts combined with means-tested benefits to the poor elderly rather than the current system that taxes working families in order to send monthly checks to retired millionaires:

http://www.willwilkinson.net/flybottle/2006/02/09/zombie-reforms-zombie-arguments/

I could go on, but you get the idea.

[d-slam]

"Many libertarians favor vouchers ..."

Slocum, I suspect you are confusing "politically feasible policies in the current (ie 21st century liberal democratic) climate that Libertarians support as being somewhat closer to the ideal" and "what Libertarians would *really* like to see if they got their way."

Libertarians prefer vouchers to the status quo, but what they'd REALLY like would be no tax-supported public schools at all. Why? Because you have the RIGHT to your income (if it was freely paid to you by your employer). ALL of it. The govt has the right to NONE of it. Ergo, no taxes. Ergo, no public school system. Ergo, some people will go uneducated because of poverty.

[Paul Reber]

The funny thing is that context thievery aside, Mankiw & DeLong actually agree on the main principles. All reasonable people agree that equality in opportunity should be provided as much as possible. Mankiw chooses to focus on the fact that this is not the same as equality in wealth or income (agreed). DeLong counters that inequality in wealth & income leads to differential opportunity and this is a problem (can Mankiw disagree here? I doubt it).

I only would like to once again add my opinion that health care inequality is likely to be similarly important to education for opportunity inequality (wealth -> better healthcare -> better ability to exploit opportunity).

P.S. Recently in one of BDL's proliferating blogish websites was a bare link to a Bruce Bartlett paper that makes the claim that inequality isn't really all that bad (e.g., the poor are getting less poor, there's evidence for mobility economically). I've been kinda hoping for some enlightened analysis and an illuminating comment thread (hint, hint).

[Paul G. Brown]

Slocum, Dan -

if you believe you have a personal obligation to help the poor, that is one thing. But this sense of obligation is not informed by your libertarianism. Ayn Rand is quite clear on this distinction. ( I babble below about 'consequentialist' libertarians, so hang on a minute).

Your school vouchers question illustrates the point nicely. (I note that it is a question where there is some disagreement among self-labelled 'libertarians'). I think the reasoned position is the one which holds that getting the state out of education is a good thing; your right to have your kids educated does not trump my right to spend my money the way I see fit. A pro-school vouchers argument is -- to me anyway -- incoherent. Having your child educated doesn't infringe my rights. However taking money from me -- whether it's to spend on public schools or on vouchers for you -- does.

The 'means testing on welfare recipients' example falls apart for similar reasons. Giving money doesn't infringe my liberties. _Taking_ it from _me_ does. You can't be a little bit pregnant. You're either inhibiting my freedoms by taking money from me to give to people I'm under _no_ obligation to support, or you're not.

The position you're both describing is rather small government conservatism (you might also call that consequentialist libertarianism, but it's a narrow distinction). That's a fine, defensible position. You're saying that some limits on individual liberties are necessary to sustain the social contract (Ayn Rand would disagree, Mises would hesitate, grind his teeth, and nod in assent). But taken too far such economic transfers make citizens lazy malingerers and that isn't good for society either.

You're also expressing some skepticism that centralized planning can do as good a job of organizing the redistribution than individual citizens. Another entirely defensible position but not libertarianism.

( I note in closing that I am taking no position on any of these questions except on fridays. )

[Maynard Handley]

"People will always differ in productivity."

Which is why repeal of the estate tax is so important.
What could be more productive, and more worthy of reward, than being born to the right parents?

As in every single thing related to the GOP, these people are major-league a-holes who will lie about EVERYTHING. Sure the words sound good, but look at the actions. There is fsckall correlation between the claims (productive people should be rewarded) and the real worldf behavior.

[Slocum]

"Libertarians prefer vouchers to the status quo, but what they'd REALLY like would be no tax-supported public schools at all. "

You keep asserting this stuff without providing any evidence. I say, "libertarians support A, B, and C" and provide links. You say, "Ah, but in their black hearts what they really want is the devil to take the hindmost" but provide no links... Not quite sure how to dispute that (or whether it's worth the trouble).

I will admit that there is a nutty libertarian lunatic fringe which seems to include some of the 'true believers' in the justly-ignored Libertarian Party. But these people are marginal -- they no more represent mainstream libertarian thought than 'Earth First!' or 'Deep Ecology' represent mainstream environmentalism.

[andres]

Er, not quite, d-slam. Even extreme libertarians concede that the government has a right to a necessary proportion of your income in order to pay for national defense, law enforcement, public goods such as highways, and the judiciary. That is, government exists only to make free market exchange (free of coercion) possible. I obviously don't agree with such a limited role for government, but one has to give libertarians their due.

And its also quite true that libertarians don't agree on everything, and there is a large gulf between libertarians such as Milton Friedman who have thought seriously about social problems--and come up with alternatives such as vouchers and negative income taxes (which are insufficient even if properly implemented, imo) and extreme libertarians (of which Ayn Rand is only one example) who would deny the government the legal right to implement even vouchers and negative income taxes.

Or to put the previous example in context--if people are starving and sleeping under bridges, even an extreme libertarian (provided he's not a mean-spirited supporter of corporate greed) would say that's not a good situation but one which must be remedied by voluntary and spontaneous charity, not by coercive and expropriatory government action (and this is assuming that the poor are poor because of their own mistakes and not because of public or private coercion).

The fact that modern capitalist society does not lavish intellectual praise on charity and that no libertarians have written in support of philanthropy as a regular and _necessary_ practice speaks volumes about the moral blindspot of this position.

A more moderate libertarian such as Milton Friedman would take the position that the extreme libertarian view is not politically sustainable--sooner or later a society subject to mass poverty and inequality will succumb to various populist and communist viruses, and so the spirit of libertarianism has to be bent, not broken, in order to provide poverty relief measures that don't tamper with the market mechanism--vouchers and the EITC being the most cited example.

What Friedman and Mankiw skip over are two problems (1) capitalism is a class-divided society that needs poverty and/or inequality as a structural element in the world economy in order to prevent wage competition for labor from gobbling up all of the value added, and so will not tolerate inequality-reducing measures in the long-term (at least not if they apply to the entire world economy), and (2) there are many types of market failures (eg adverse selection in both health and education) which will make market-friendly solutions such as vouchers less than reasonably effective.

It's this moral/empirical blind spot in libertarianism which leeds pro-free market writers to write ridiculous screeds about the inferiority of the social democratic model in Europe, and how welfare statism is unsustainable (news to the Scandinavians). It may well be true that not every country in the world economy can adopt a Scandinavian social democratic system, but that's a problem which has to do more with class and politics than with the inherent superiority of free market economics.

[Slocum]

"But this sense of obligation is not informed by your libertarianism. Ayn Rand is quite clear on this distinction."

But Ayn Rand was an 'objectivist' not a libertarian. She derisively referred to libertarians as 'hippies of the right'.

"The position you're both describing is rather small government conservatism (you might also call that consequentialist libertarianism, but it's a narrow distinction). That's a fine, defensible position."

You've restricted your definition of 'libertarian' to a narrow 'all tax is theft' position. Realize that most self-identified libertarians don't accept that. Reason magazine's slogan is "Free Minds & Free Markets" (not "Taxation is Theft"). Free minds require legal and constitutional rights. Free markets minimally require property rights and a functioning legal system. All of this requires a government infrastructure and taxes to support it. This is not incompatible with libertarianism as most libertarians see it.

And most libertarians of the non-nutter variety would probably prefer the label 'classic liberal' (or even 'Whig') to distinguish themselves from those libertarians with anarchist tendencies. But there seems to be little chance of 'classic liberal' being used alongside the current American sense of 'liberal' nor does the revival of 'Whig' seem likely.

[observer]

shorter libertarians: of course we don't want destitute elderly to die in the street begging for food. But if it happens as a result of the maximization of individual liberty, so be it!

[Paul G. Brown]

Slocum -

I don't know what circles you run with, but I try to use words to mean what other people say they mean. Please RTFFA. This is what libertarians say about _themselves_.

http://www.faqs.org/faqs/libertarian/faq/

"Most importantly, Libertarians ask: is anyone violating another's rights?"

and

"We should support all moves to reduce and repeal taxes because taxes are obtained immorally, by force."

http://www.lp.org/issues/platform_all.shtml

"As Libertarians, we seek a world of liberty; a world in which all individuals are sovereign over their own lives and no one is forced to sacrifice his or her values for the benefit of others."

You claim to be a "libertarians of the non-nutter variety". Then please use another label; 'classic liberal' or 'small government conservative'. Whatever. But as I hope these quotes show, the positions you are advocating are not the positions advocated by the majority of 'libertarians' I encounter.

(Many of whom are really nice, sincere people BTW - especially on fridays).

But then we proceed to the general weaknesses of the "Free Markets & Free Minds" people. OK. You've accepted that a case can be made for some taxation, and therefore some redistribution of wealth. Your position seems to be that you need to tax me in order to provide a courts system. In fact you seem to be saying that I should pay for a mechanism whereby the litigious benefit and the peacable and civic minded lose out! You seem -- indeed -- to be proselitizing for a trial lawyer's utopia!

Fess up! You're a shill for the Edward's campaign! Admit it!

[elspi]

Slocum
From http://en.wikipedia.org/wiki/Libertarianism
"There are broadly two types of libertarians: consequentialists and rights theorists.[1] Rights theorists hold that it is morally imperative that all human interaction, including government interaction with private individuals, should be voluntary and consensual. They maintain that the initiation of force by any person or government, against another person or their property — with "force" meaning the use of physical force, the threat of it, or the commission of fraud against someone — who has not initiated physical force, threat, or fraud, is a violation of that principle. This form of libertarianism is associated with Objectivists, as well as with individualist anarchists who see this prohibition as requiring opposition to the state to be consistent."

You are saying that this is insane, and so there cannot be any significant segment of the population that believes it. May I suggest you visit Red America, because where I am from this all the rage.

[Kenji]

tom f:

I have met plenty of people from privileged background who end up wasting their lives, because their background has sapped their drive. Just as all empires rise and fall, so do the riches of families and individuals.
Kenji

[bernard Yomtov]

""I don't think the government should tax us to provide these services. But I do believe individuals have a personal responsibility to help those less fortunate. So, even though I'd eliminate most taxes (I still support Pigovian taxes which would help pay for a realtively small state), I personally give ~1/3 of my net income to charities that directly help those less fortunate. I believe this ~$100k/yr has far more impact than several times as much would in taxes."

This is certainly admirable, but as others have pointed out, there is a difference between personal morality and political views. I think one question to ask is, given your sense of our moral obligations, what do you advocate if private charity is insufficient to meet the needs of the "less fortunate?"

[Slocum]

"You are saying that this is insane, and so there cannot be any significant segment of the population that believes it. May I suggest you visit Red America, because where I am from this all the rage."

I'm quite familiar with red America, thanks (I live in a dark blue spot, but mosts of my relatives don't). And the idea that there are lots of anarcho-Randian libertarians out there in the sticks is as nuts as...well...anarcho-Randian philosophy. For one thing, most of these Red-Staters are, at best, vaguely familiar with Rand and her philosophy, and unlike Rand they're devout Christians and social conservatives who are only too happy, for example, to support the government in the war on drugs and the blocking of gay marriage.

[Marc]

This conversation, in a nutshell, is why I have developed such a deep contempt for libertarianism. In our current society we have universal schooling and taxes to pay for public schools. In libertopia there are no public schools. Or roads. Or police. Or firefighters. Yet, somehow - by magic! everyone gets to use these services. No one has their house burn down because they didn't pay for private firefighters. No one is hungry. Slocum in this thread is complaining that libertarians (of course) favor things like universal education. Without public schools, how is it achieved? I could go straight down the list and on topic after topic the libertarian answer is basically "the market will provide". Even on subjects - like environmental protection - where the market completely failed to do so in the past. (see commons, tragedy of). This is *not* the same as universal education, universal public services such as roads, police, and firefighting.

Libertarianism is like the so-called pro-life movement: adopting an inflexible axiomatic moral system without the honesty of carrying through the proclaimed principles to their logical conclusions. If taxes are theft then providing schooling to the poor is theft. If there are public goods that require taxes - well, you shouldn't call taxation theft...

[Jon Fernquest]

Aesop's rather harsh libertarianism (6th century BC):

http://en.wikipedia.org/wiki/The_Ant_and_the_Grasshopper
http://en.wikipedia.org/wiki/Aesop

"...gives a moral lesson about hard work and preparation. It concerns a grasshopper who spends the warm months singing away while the ant (or ants in some editions) works to store up food for winter. When the winter does come, the famished grasshopper finds itself dying of hunger...."

"...happier versions of the fable show the ants taking pity and giving the grasshopper some food."

[Dan]

Paul: Agreed; they are independent. (I was primarily disagreeing with Bernard Yomtov's characterization).

Bernard: I believe that individuals do have moral obligations to help. But, if that is insufficient, the correct response isn't to create a government that takes it from others.

I suspect we could argue about the efficiency of having the government do the redistribution, but in terms of core principles, we probably disagree too much to convince one another in the comments of Brad's blog. In particular, I believe that people are good and would help those who are truly in need, but, since it's never been tried, I have no empirical evidence.

I do take your moral position seriously, and I do hope you seriously consider mine.

[Adan]

"I believe that individuals do have moral obligations to help. But, if that is insufficient, the correct response isn't to create a government that takes it from others."

What would be the correct response?

[anne]

http://economistsview.typepad.com/economistsview/2007/02/the_welfare_sta.html

February 13, 2007

The Welfare State or the Insurance State?
Edited by Mark Thoma

Welfare State Stasis, by Robert J. Samuelson, Commentary, Washington Post: ...In 1956, defense dominated the budget; the Cold War buildup was in full swing. The welfare state, which is what 'payments to individuals' signifies, was modest. Now everything is reversed. ... The welfare state has made budgeting an exercise in futility. Both liberals and conservatives, in their own ways, peddle phony solutions. ...

It might help if Americans called welfare programs -- current benefits for select populations, paid for by current taxes -- by their proper name, rather than by the soothing (and misleading) labels of 'entitlements' and 'social insurance.' That way, we might ask ourselves who deserves welfare and why. ...

[M]ost Americans don't want to admit that they are current or prospective welfare recipients. They prefer to think that they automatically deserve whatever they've been promised simply because the promises were made. ...

To the archive....

[Typical modern American conservatism. Phooey....]

[anne]

Now, we might remember that the ultimate in social benefit programs were just those that were under way in 1956 and these were the programs of veterans benefits that sent veterans and families to colleges, set them in homes, allowed for employment advantages and even benefits such as a life of health care. I have thought for a while that the veterans programs from 1945 on assured the New Deal legacy for Americ'a middle class.

[anne]

"[M]ost Americans don't want to admit that they are current or prospective welfare recipients."

Now, are we referring to the more than 100,000 veterans of Iraq and Afghanistan who have been granted disability status so far. Are we referring to these veterans or who precisely? Are we referring to my grandfather who has veterans benefits or my grandmother who is covered by Medicare which my grandparents both bought for themselves and others through a lives of work?

What a wretched column, but thoroughly typical.

[elspi]

>>>I'm quite familiar with red America, thanks (I live in a dark blue spot, but >>>>mosts of my relatives don't).

I have only lived in red America.

>>>>> And the idea that there are lots of anarcho-Randian libertarians out >>>>>there in the sticks is as nuts as...well...anarcho-Randian philosophy.

Says the man who has never even seen the place. Trust me, the fact that you don't know these people doesn't mean that they don't exist.

>>>>>For one thing, most of these Red-Staters are, at best, vaguely familiar >>>>with Rand and her philosophy, and unlike Rand they're devout Christians

Yes, you would think that all Christians would be socialists (based on the whole Mathew Mark Luke and John thing), but they aren't. Why is a Christian (rights theorist) libertarian anymore of a contradiction than a Christian conservative?

>>>>and social conservatives who are only too happy, for example, to support >>>>the government in the war on drugs and the blocking of gay marriage.

This is just the sophistry that you are seeing. Fascists are not well thought of. For this reason, fascists pretend to be libertarian. Of course when they have a chance to vote for someone like Bush, we see what they really are.

I am not going to argue that the people claiming to be (rights theorist) libertarians are actually (rights theorist) libertarians; I just know there are a lot of them.

[Slocum]

"Slocum in this thread is complaining that libertarians (of course) favor things like universal education. Without public schools, how is it achieved?"

Sigh. Make that a double sigh with an eye-roll. How could it be achieved? How about with vouchers that are paid for by tax dollars that parents can take to any school -- one of the best known libertarian ideas (and one that, like the negative income tax/EITC, was championed by Milton Friedman). Are school vouchers a preposterous, radical idea? The Danes don't think so:

http://oldfraser.lexi.net/publications/critical_issues/1999/school_choice/section_05.html

Would vouchers destroy the public system? They certainly don't seem to have done so in Denmark, where independent schools have a 13% share of the market:

http://www.fcpp.org/main/publication_detail.php?PubID=338

[Slocum]

"This is just the sophistry that you are seeing. Fascists are not well thought of. For this reason, fascists pretend to be libertarian. Of course when they have a chance to vote for someone like Bush, we see what they really are."

"I am not going to argue that the people claiming to be (rights theorist) libertarians are actually (rights theorist) libertarians; I just know there are a lot of them."

Have you noticed you seem to be awfully busy contradicting yourself? First you claim that the 'rights theorist libertarians' you know aren't really libertarians at all but rather 'fascists'. And then, in the very next sentence you claim there are lots of 'rights theorist libertarians' out there.

Face it -- people who quite likely have never read any Ayn Rand, who are evangelicals rather than atheist, and who support government wars on drugs, indecency, illegal immigrants, and gay rights (and, probably, school prayer, intelligent design, government farm programs and ethanol subsidies to boot) are not, absolutely NOT, in any meaningful sense of the term, Randians, let alone libertarians.

I can assure you that my conservative, Baptist, rural, red-state relatives are not libertarians and we do not see eye to eye on a whole host of political issues. In fact, to be honest, if it weren't for cultural issues, they'd be populist Democrats.

[walkingtheline]

Dan,

"In particular, I believe that people are good and would help those who are truly in need, but, since it's never been tried...."

Huh? What makes you think it has never been tried? Even restricted just to the issue of health care, this was the only system in place in practically every country prior to World War II. Things were simple: your disease is your problem.

Your libertarian system failed miserably and created many negative externalities. Claiming that it "did not succeed" does not mean it "was not tried". By that logic one could argue the United States never went to war with Iraq.

[wetzel]

Paul Reber-

"All reasonable people agree that equality in opportunity should be provided as much as possible."

Please forgive me for taking your statement to illustrate the point I was trying to get at in contrasting the utilitarian and libertarian mindsets.

You say, 'should be provided', and the question is provided by whom?

At heart, your statement reflects Rawls' extremely influential take on utilitarianism. What Friedman did is to create a kind of philosopher king libertarianism, that allowed utilitarians like Brad to embrace free market principles because casting the free market as the means to achieve the best for the most.

From a utilitarian perspective of justice, the free market can be argued as a practical method of engineering society to obtain the most just outcome, represented by the greatest prosperity for the most people. But the free market is not an end in istself, so there is a room for universal health care or universal public education without cracking the world-view. However, from a libertarian perspective of justice, the free market is the most just economic system in itself. This is absolutely crucial for liberals to understand, and I think it is at the heart of Clintonism vs. Reaganism.

[anne]

Yes; I sort of like the idea of begging on corners to be cared for when ill. Not necessarily in the winter, mind you, but summer begging could be fun, though I would be ill at the time, so possibly not so much fun. I can play my viola.

[Matt]

We need a strong middle class because an economy where the most people own the most resources results in the most efficient use of resources.

The main effort is to keep the wealthy from using government to cheat, and our weapon against that is the progressive income tax.

[andres]

"Yes; I sort of like the idea of begging on corners to be cared for when ill. Not necessarily in the winter, mind you, but summer begging could be fun, though I would be ill at the time, so possibly not so much fun. I can play my viola."

Oooh. _Not_ my favorite instrument. To keep viola-playing freaks off the streets and subway stations is one of my main reasons to support the welfare state ;-)

[bernard Yomtov]

"To keep viola-playing freaks off the streets and subway stations is one of my main reasons to support the welfare state'

Better the violas than the tuneless guitarist/singers. In my experience the horn players are the best, though I have no doubt Anne is marvelous on the viola, and could give them a run for their money, so to speak.

[Barkley Rosser]

All this talk about libertarianism is a bit off-thread. While Mankiw may have moved more in that direction, I am not aware that he is a libertarian at all.

[assman]

I think the libertarian system would provide a level of health care far superior to any health care system in existence. It would far exceed the level of care in the Sweden or Japan with health care outcomes to match. The reason for this is very simple: libertarians would eliminate medical licensing. There was a time when the United States did have libertarian health care and at that time Americans were the healthiest people in the world. Health care was also very cheap since there was a surplus of doctors.

Its interesting that we have a completely free market for food and yet nobody in America dies of starvation. While the USSR guaranteed adequate food for every person in their constitution and people still starved to death.