Do good economists need to be right wing?

[Comrade Funk]

No. It's just the Ron Paul cult that is most visible.

hurr duur END THE FED

[buritobr]

Free trade is neither left nor right.
Labor unions can support protectionism in the benefit of the industries where they work.
However, protectionism can also mean more expensive goods for the low class and higher profits for some business.
Free trade redistributes income for the upper class in rich countries and for the low class in the poor countries.
Center-left economist Paul Krugman has already cricticized the anti-trade ideas of the far right politican Pat Buchanan.
Every economist support free trade as a rule. Some of them consider that this rule should have no exception. Some of them consider that there is an ecxetion: some temporary protectionism is acceptable for infant industries.
European agriculture is not an infant industry (actually, it is a very old industry). However, the argument for the protection of the European agriculture is not economic.


 

[buritobr]

Anyone, who confuses ideology and economics is not a good economist. As citizens we have views on how we would like the society be.  As economists we have views on what would be consequences of such or other policies. And confusing the two is not a good thing.

Now, it would be hard to find an good economist who does not much like free trade, for instance. Or would advocate price controls on most goods. Not because of the "left", or "right", but because there are very few circumstances out there where sane objectives cold be achieved by such policies. Markets have many attractive features - even if you are an convinced socialist.

I agree.
One doesn't need to agree with Keynes' political views presented in the Chapter 24 of the "General Theory of Employment, Interest and Money" in order to recognize the relevance of the other 23 chapters of the book for macroeconomics. It is not necessary to be a leftist to recognize that lack of demand can cause equilibrium below the full employment level. Many right-wing governments practiced conservative keynesian policies: military spending, tax cuts for high income families.
One doesn't need to agree with Friedman's views on education in order to recognize his contribution to macroeconomics. Even if you don't agree with the privatization of schools, you can accept that there is no long term relation between inflation and unemployment.

[Foucaulf]

but why would we gamble with societal utility

Are you a Communist, or what?

Aren't most economists utilitarians? We're not usually communitarians, though, and the dividing line between the utilitarians is Kaldor-Hicks v Pareto.

I'm curious why you made that a "We economists" statement, but if you were one your instinct should have associated ag's comment to a social choice problem. (Not that his response wasn't a painfully theorist one)

Labor unions can support protectionism in the benefit of the industries where they work.
However, protectionism can also mean more expensive goods for the low class and higher profits for some business.

There is sort of a point here: if you ascribe to a Ricardo-Viner world of trade - where only a few factors of production can be used in all industries and everything else is industry-specific - then free trade can benefit industries who produce productively compared to world prices. If specialized labour exists in some industries, unions who are part of those industries should then lobby for opening up trade.

You must be logged in to read this quote.

This is just a whole different point entirely (against which free trade advocates have been far less successful).

[Gustaf]

The infant industry argument always seemed odd to me. If the investment makes sense why wouldn't it happen anyway?

[TheDeadFlagBlues]

The infant industry argument always seemed odd to me. If the investment makes sense why wouldn't it happen anyway?

High-value added industries require enormous sums of investment which need to be sustained over long periods of time. Without infant industry protection, it's hard for me to understand how this kind of investment could be perceived as viable or worthwhile. By "high-value added industries", I don't mean plants that assemble parts or plants that produce individual parts but rather an entire supply chain contained within a domestic economy.

[ag]

I'm curious why you made that a "We economists" statement,

You do not need a licence to be one. I guess, he thinks he is.

[RI]

I'm curious why you made that a "We economists" statement,

You do not need a licence to be one. I guess, he thinks he is.

Generally, some type of econ graduate degree is a prerequisite for an "economist" job title.

[ag]

I'm curious why you made that a "We economists" statement,

You do not need a licence to be one. I guess, he thinks he is.

Generally, some type of econ graduate degree is a prerequisite for an "economist" job title.

"Daddy, who is Karl Marx?"
"An economist."
"Like auntie Sarah?"
"No, auntie Sarah is a senior economist".

[AggregateDemand]

I'm curious why you made that a "We economists" statement, but if you were one your instinct should have associated ag's comment to a social choice problem. (Not that his response wasn't a painfully theorist one)

Is communism a legitimate economic discipline? The answer is "no", and that's why I responded with moral theory, instead.

I'm not a teacher so I have no interest in humoring theories that have virtually no merit.

[Ebsy]

I'm curious why you made that a "We economists" statement, but if you were one your instinct should have associated ag's comment to a social choice problem. (Not that his response wasn't a painfully theorist one)

Is communism a legitimate economic discipline? The answer is "no", and that's why I responded with moral theory, instead.

I'm not a teacher so I have no interest in humoring theories that have virtually no merit.

I'm not communist by any means, but to say it isn't a legitimate economic discipline is both ridiculous and inane.

[AggregateDemand]

I'm not communist by any means, but to say it isn't a legitimate economic discipline is both ridiculous and inane.

I'm sure you also think mercantilism is a legitimate economic arrangement, too. I'm not interested in furthering the politically correct agenda of coddling communists.

Not even hard left economists use communist tenets as a method of modeling anything. Communism is a polemical discipline within academia, like mercantilism.

[ag]

I'm curious why you made that a "We economists" statement, but if you were one your instinct should have associated ag's comment to a social choice problem. (Not that his response wasn't a painfully theorist one)

Is communism a legitimate economic discipline?

Neither is Libertarianism. Or Romanticism. Or Judaism.

[ag]

I'm curious why you made that a "We economists" statement, but if you were one your instinct should have associated ag's comment to a social choice problem. (Not that his response wasn't a painfully theorist one)

Is communism a legitimate economic discipline? The answer is "no", and that's why I responded with moral theory, instead.

I'm not a teacher so I have no interest in humoring theories that have virtually no merit.

I'm not communist by any means, but to say it isn't a legitimate economic discipline is both ridiculous and inane.

"Communism" is an ideology. Hence, by definition, it is not a "discipline".

[RI]

I'm curious why you made that a "We economists" statement,

You do not need a licence to be one. I guess, he thinks he is.

Generally, some type of econ graduate degree is a prerequisite for an "economist" job title.

"Daddy, who is Karl Marx?"
"An economist."
"Like auntie Sarah?"
"No, auntie Sarah is a senior economist".

lol. Perhaps I should have specified that I meant within the past few decades and wrt AggregateDemand. I was lazy with specifying my assumptions.

[ag]

I'm curious why you made that a "We economists" statement,

You do not need a licence to be one. I guess, he thinks he is.

Generally, some type of econ graduate degree is a prerequisite for an "economist" job title.

"Daddy, who is Karl Marx?"
"An economist."
"Like auntie Sarah?"
"No, auntie Sarah is a senior economist".

lol. Perhaps I should have specified that I meant within the past few decades and wrt AggregateDemand. I was lazy with specifying my assumptions.

Well, no harm in someone appropriating this particular title. Not that we have it regulated   Not that anybody would mistake him for a colleague

[RINO Tom]

Free trade is neither left nor right.
Labor unions can support protectionism in the benefit of the industries where they work.
However, protectionism can also mean more expensive goods for the low class and higher profits for some business.
Free trade redistributes income for the upper class in rich countries and for the low class in the poor countries.
Center-left economist Paul Krugman has already cricticized the anti-trade ideas of the far right politican Pat Buchanan.
Every economist support free trade as a rule. Some of them consider that this rule should have no exception. Some of them consider that there is an ecxetion: some temporary protectionism is acceptable for infant industries.
European agriculture is not an infant industry (actually, it is a very old industry). However, the argument for the protection of the European agriculture is not economic.


 

I had to quit reading when I saw the words "center" and "Paul Krugman" anywhere near each other.

[Gustaf]

The infant industry argument always seemed odd to me. If the investment makes sense why wouldn't it happen anyway?

High-value added industries require enormous sums of investment which need to be sustained over long periods of time. Without infant industry protection, it's hard for me to understand how this kind of investment could be perceived as viable or worthwhile. By "high-value added industries", I don't mean plants that assemble parts or plants that produce individual parts but rather an entire supply chain contained within a domestic economy.

If it's not viable or worthwhile, then why do it?

[politicus]

The infant industry argument always seemed odd to me. If the investment makes sense why wouldn't it happen anyway?

High-value added industries require enormous sums of investment which need to be sustained over long periods of time. Without infant industry protection, it's hard for me to understand how this kind of investment could be perceived as viable or worthwhile. By "high-value added industries", I don't mean plants that assemble parts or plants that produce individual parts but rather an entire supply chain contained within a domestic economy.

If it's not viable or worthwhile, then why do it?

Because it will become viable long term. South Korea did it very successfully.

[TheDeadFlagBlues]

The infant industry argument always seemed odd to me. If the investment makes sense why wouldn't it happen anyway?

High-value added industries require enormous sums of investment which need to be sustained over long periods of time. Without infant industry protection, it's hard for me to understand how this kind of investment could be perceived as viable or worthwhile. By "high-value added industries", I don't mean plants that assemble parts or plants that produce individual parts but rather an entire supply chain contained within a domestic economy.

If it's not viable or worthwhile, then why do it?

Because it will become viable long term. South Korea did it very successfully.

^^^

Nearly developed nation that produces and exports "high-value added" goods protected infant industries from foreign competition in the past. Although I haven't looked at the economic literature on this subject, I think that economic theory could support "infant industry protection" as a viable economic strategy.

[Gustaf]

The infant industry argument always seemed odd to me. If the investment makes sense why wouldn't it happen anyway?

High-value added industries require enormous sums of investment which need to be sustained over long periods of time. Without infant industry protection, it's hard for me to understand how this kind of investment could be perceived as viable or worthwhile. By "high-value added industries", I don't mean plants that assemble parts or plants that produce individual parts but rather an entire supply chain contained within a domestic economy.

If it's not viable or worthwhile, then why do it?

Because it will become viable long term. South Korea did it very successfully.

^^^

Nearly developed nation that produces and exports "high-value added" goods protected infant industries from foreign competition in the past. Although I haven't looked at the economic literature on this subject, I think that economic theory could support "infant industry protection" as a viable economic strategy.

Why doesn't anyone want to get this long term profit then?

[TheDeadFlagBlues]

The infant industry argument always seemed odd to me. If the investment makes sense why wouldn't it happen anyway?

High-value added industries require enormous sums of investment which need to be sustained over long periods of time. Without infant industry protection, it's hard for me to understand how this kind of investment could be perceived as viable or worthwhile. By "high-value added industries", I don't mean plants that assemble parts or plants that produce individual parts but rather an entire supply chain contained within a domestic economy.

If it's not viable or worthwhile, then why do it?

Because it will become viable long term. South Korea did it very successfully.

^^^

Nearly developed nation that produces and exports "high-value added" goods protected infant industries from foreign competition in the past. Although I haven't looked at the economic literature on this subject, I think that economic theory could support "infant industry protection" as a viable economic strategy.

Why doesn't anyone want to get this long term profit then?

For one, the long term profit couldn't be realized without infant industry protection: assuming that there would be no tariffs or subsidies, there'd be no ability for a relatively new firm to compete against a relatively old firm for a variety of reasons. Also, investors are not willing to make this kind of commitment due to the long time horizon for the maturation of the investment. Investors would rather seek quicker short-term profits elsewhere for simple behavioral reasons: investors have a limited lifespan.

I apologize for my "on a napkin" argument but I think this makes intuitive sense, even within the confines of neo-classical models.

[Gustaf]

The infant industry argument always seemed odd to me. If the investment makes sense why wouldn't it happen anyway?

High-value added industries require enormous sums of investment which need to be sustained over long periods of time. Without infant industry protection, it's hard for me to understand how this kind of investment could be perceived as viable or worthwhile. By "high-value added industries", I don't mean plants that assemble parts or plants that produce individual parts but rather an entire supply chain contained within a domestic economy.

If it's not viable or worthwhile, then why do it?

Because it will become viable long term. South Korea did it very successfully.

^^^

Nearly developed nation that produces and exports "high-value added" goods protected infant industries from foreign competition in the past. Although I haven't looked at the economic literature on this subject, I think that economic theory could support "infant industry protection" as a viable economic strategy.

Why doesn't anyone want to get this long term profit then?

For one, the long term profit couldn't be realized without infant industry protection: assuming that there would be no tariffs or subsidies, there'd be no ability for a relatively new firm to compete against a relatively old firm for a variety of reasons. Also, investors are not willing to make this kind of commitment due to the long time horizon for the maturation of the investment. Investors would rather seek quicker short-term profits elsewhere for simple behavioral reasons: investors have a limited lifespan.

I apologize for my "on a napkin" argument but I think this makes intuitive sense, even within the confines of neo-classical models.

It might yes, but it isn't intuitively super convincing for me. People also have a limited life-span, after all. It isn't obvious that the current generation in the country should forego benefits for the sake of some far-off future generation.

Companies do long-term investment fairly often after all. And shareholders might hold their shares longer than a politician stays in government.

[politicus]

The infant industry argument always seemed odd to me. If the investment makes sense why wouldn't it happen anyway?

High-value added industries require enormous sums of investment which need to be sustained over long periods of time. Without infant industry protection, it's hard for me to understand how this kind of investment could be perceived as viable or worthwhile. By "high-value added industries", I don't mean plants that assemble parts or plants that produce individual parts but rather an entire supply chain contained within a domestic economy.

If it's not viable or worthwhile, then why do it?

Because it will become viable long term. South Korea did it very successfully.

^^^

Nearly developed nation that produces and exports "high-value added" goods protected infant industries from foreign competition in the past. Although I haven't looked at the economic literature on this subject, I think that economic theory could support "infant industry protection" as a viable economic strategy.

Why doesn't anyone want to get this long term profit then?

For one, the long term profit couldn't be realized without infant industry protection: assuming that there would be no tariffs or subsidies, there'd be no ability for a relatively new firm to compete against a relatively old firm for a variety of reasons. Also, investors are not willing to make this kind of commitment due to the long time horizon for the maturation of the investment. Investors would rather seek quicker short-term profits elsewhere for simple behavioral reasons: investors have a limited lifespan.

I apologize for my "on a napkin" argument but I think this makes intuitive sense, even within the confines of neo-classical models.

It might yes, but it isn't intuitively super convincing for me. People also have a limited life-span, after all. It isn't obvious that the current generation in the country should forego benefits for the sake of some far-off future generation.

Companies do long-term investment fairly often after all. And shareholders might hold their shares longer than a politician stays in government.

1) Protecting infant industry is a strategy normally pursued by nationalist dictatorships with their eyes set on long term goals of creating a strong and broad based national industry. But the gain would generally materialize within 1-2 generations, so the "do it for your children" argument would come into effect.

2) Companies can not make long term investments if they go bankrupt in the meantime. Which they would if they tried to establish themselves in an industry with well established players, like the Koreans did in shipbuilding. If you want to become competitive in an industry with well established  players  with large resources (with the long term benefits that entails), there needs to be some kind  of protection in the start-up phase.

[Gustaf]

The infant industry argument always seemed odd to me. If the investment makes sense why wouldn't it happen anyway?

High-value added industries require enormous sums of investment which need to be sustained over long periods of time. Without infant industry protection, it's hard for me to understand how this kind of investment could be perceived as viable or worthwhile. By "high-value added industries", I don't mean plants that assemble parts or plants that produce individual parts but rather an entire supply chain contained within a domestic economy.

If it's not viable or worthwhile, then why do it?

Because it will become viable long term. South Korea did it very successfully.

^^^

Nearly developed nation that produces and exports "high-value added" goods protected infant industries from foreign competition in the past. Although I haven't looked at the economic literature on this subject, I think that economic theory could support "infant industry protection" as a viable economic strategy.

Why doesn't anyone want to get this long term profit then?

For one, the long term profit couldn't be realized without infant industry protection: assuming that there would be no tariffs or subsidies, there'd be no ability for a relatively new firm to compete against a relatively old firm for a variety of reasons. Also, investors are not willing to make this kind of commitment due to the long time horizon for the maturation of the investment. Investors would rather seek quicker short-term profits elsewhere for simple behavioral reasons: investors have a limited lifespan.

I apologize for my "on a napkin" argument but I think this makes intuitive sense, even within the confines of neo-classical models.

It might yes, but it isn't intuitively super convincing for me. People also have a limited life-span, after all. It isn't obvious that the current generation in the country should forego benefits for the sake of some far-off future generation.

Companies do long-term investment fairly often after all. And shareholders might hold their shares longer than a politician stays in government.

1) Protecting infant industry is a strategy normally pursued by nationalist dictatorships with their eyes set on long term goals of creating a strong and broad based national industry. But the gain would generally materialize within 1-2 generations, so the "do it for your children" argument would come into effect.

2) Companies can not make long term investments if they go bankrupt in the meantime. Which they would if they tried to establish themselves in an industry with well established players, like the Koreans did in shipbuilding. If you want to become competitive in an industry with well established  players  with large resources (with the long term benefits that entails), there needs to be some kind  of protection in the start-up phase.

2) is simply untrue. There is nothing preventing an investor from getting money from other assets to finance a long-term project. That is, they could do exactly what the government would be doing - losing money by subsidizing an industry in the hope it would become profitable eventually.