This morning’s Globe includes a lengthy, very low quality article by Ira Basen on what’s wrong with modern economic research. It’s yet another repackaging of the same old ideologically-charged and technically incompetent canards, basically reducing all of economic thought to a cartoon version of macroeconomic theory circa 1980, and all economic research to mindless and/or corrupt advocacy of laissez-faire politics.
Putting aside the other ignorant attacks, let’s focus on the claim that mainstream economists advocate nothing but free market policies: the “orthodoxy” of “neoclassical, pro-market, laissez faire ideas,” as Basen puts it. Is it true that all, or even a substantial majority, of economists support laissez faire? It would be very odd if that were the case, as even Economics 101 textbooks include extended discussions of multiple ways in which markets left to themselves will yield poor outcomes. And of course it’s not at all true. A few years ago, Dan Klein and Chalotta Stern published an analysis of survey results of members of the American Economic Association, Is there a free market economist in the house? As you might guess from the title, the political beliefs of mainstream economists—even American mainstream economists—-look nothing like Basen imagines.
Klein and Stern asked economists to rate their support for various government interventions on a scale from 1 (“Strongly support”) to 5 (“Oppose strongly”). Interventions included: tariffs, minimum wage laws, income redistribution, socially provided education, interventionist fiscal and monetary policies, OSHA safety regulations, EPA environmental regulations, laws against discrimination, laws against hard drugs and prostitution, and others. The distribution of responses, for all economists and broken down by whether they reported being Democrats (58%) or Republicans (23%) (with the remainder reporting independent parties or refusing to answer). Note that in 2007 there were about 2.5 Democrat economists per Republican economist. The distribution of reported support for intervention averaged across 16 types of intervention looks like:
According to myths such as those propagated by Ira Basen, the graph ought to look very different: everyone should be piled up on 5.0, “Oppose strongly” the intervention. The overall proportion of economists reporting an average score of greater than 4.5 is less than 3%, which makes such strong support for free markets a fringe position. The overall average support for intervention is 2.67 on the 5.0 point scale, about half way between “support mildly” and “have mixed feelings.” The item responses reveal support is widespread for some policies and widely opposed for others. For example, most economists oppose tariffs to protect domestic industries ( 4.46 / 5.0 ) and most economists support laws against discrimination ( 1.76 / 5.0 ). Klein and Stern proceed to discuss a number of reasons why outsiders may incorrectly believe that most economists are strong free market supporters.