The Dissident Ambassador

In a new paper, Greg Mankiw shares some thoughtful reflections on teaching and heterodoxy:

I have always thought that instructors, especially in introductory courses, are like ambassadors for the economics profession. The role of ambassadors is not to represent their own views but to act as agents for their principal. Just as ambassadors are supposed to faithfully represent the perspective of their nations, the instructor in an introductory course (and intermediate courses as well) should faithfully represent the views shared by the majority of professional economists.

[…]

This perspective of instructor as ambassador raises the question of what instructors should do if they hold views far from the mainstream of the economics profession. If you are an Austrian or Marxist economist, for example, what should you do if asked to teach an introductory course? In my view, there are only two responsible courses of action. One is to sublimate your own views and spend most of the course teaching what the mainstream believes, even if you disagree with it. Because many introductory students will take only one or two courses in economics throughout their educations, it would be pedagogical malpractice, in my judgment, to focus on an idiosyncratic minority viewpoint. The other responsible course of action is to avoid teaching introductory (and even intermediate) courses entirely. In a more advanced elective, there is nothing wrong with teaching an idiosyncratic minority viewpoint, as long as students know what they are getting.

Mankiw’s view definitely resonates with me, but my position – and my practice – is rather different.  I say that a professor’s fundamental fiduciary duty is to teach their students about the world – not what his peers think about the world.  As long as your discipline is fundamentally sound, fortunately, these two goals closely overlap.  If your discipline is a corrupt pseudo-science, however, your obligations to your students require you to teach heterodoxy.  Sure, you’ll have to explain the normal view in the process of debunking it.   Yet it’s a dereliction of duty to teach nonsense as fact.

Analogously, by the way, it’s fine to act as a loyal ambassador for a fundamentally virtuous organization.  But if you’re the ambassador for North Korea, you have not only the right but the obligation to be a traitor.  “I’m just promoting my client’s interests” is as flimsy a defense as “I’m just following orders.”  See Mike Huemer on legal ethics for further discussion.

Since I am a professional economist, I’m happy to say that I don’t consider my discipline a corrupt pseudo-science.  However, economics is also far from “fundamentally sound.”  When I teach, then, I try to split the difference.  I spend about half of the time as Mankiw recommends: neutrally describing the economic consensus.  When the consensus is far from the truth, though, I go out of my way to amend it.

Yes, I try to plainly disclose whether I’m describing the research consensus or just telling them what’s actually reasonable to believe.  And no, I don’t penalize students for arguing that the consensus is right and Caplan is wrong.  Some of my exams even require students to disagree with me!  Still, my primary goal is to teach students how the economy works, not what most economists happen to believe.

Furthermore, the only economics students who really need to understand the current conventional wisdom of economics are… graduate students!  After all, no matter how misguided the research consensus happens to be, you can’t be a successful researcher unless you understand it.  Most Econ 1 students, in stark contrast, will never take another economics class.  So the sole economics instructor they’re ever going to have should rigidly focus on economic reality.  Thus, I essentially reverse Mankiw’s advice to confine “idiosyncratic minority viewpoints” to advanced students.  No matter what you think about Keynesianism, you have a fiduciary responsibility to teach your grad students all about it.  Otherwise, they’ll be at a severe professional handicap.  For undergrads, in contrast, the truth of Keynesianism is pivotal.  If your students’ lifetime commitment to economics comes to fifteen weeks, it would be silly to spend five weeks on an intellectual dead-end.

Am I saying that professors should teach whatever they feel is true?  No; a thousand times no.  If you use your “feelings” to form beliefs, you shouldn’t be a professor at all.  The first fiduciary duty of every intellectual is to set emotions aside, and calmly and patiently study a wide range of arguments and evidence.  Once you’ve done that, however, you owe it to your students to share the fruits of your labors.  And if, along the way, you discover that your discipline is misguided, you should let your students know that, too.

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The Missing Planks

Prominent presidential candidates are advancing proposals that frankly horrify me.  Should we dismember big tech firms?  Or just give every American adult $1000 a month?  Rather than critique these awful ideas, I’d rather ponder the Dog that Did Not Bark – moderate, common-sense proposals that no major candidate is likely to advocate.  Just a few that have been on my mind lately…

1. Stop REAL ID before it inconveniences tens of millions of American travelers.  Also, order the TSA to stop asking to see your boarding pass twice just to board a plane.

2. Let students fulfill their foreign language requirement with a computer language.  For both high school graduation and public college admission.

3. Charge higher interest rates on student loans for borrowers who are unlikely to successfully finish their degree.  And tell the borrowers why you’re doing this!

4. When someone applies for a building permit, don’t say Yes or No.  Name a price – and make it public.

5. The same goes for health and safety regulation.  Don’t tell firms how to avoid harm.  Charge them for the harms they cause.  If the downside risk is catastrophic, make them buy insurance or post a bond.

6. While we’re at it, why not sell foreigners portable work visas, with an upcharge for dependents?

7. Electronic road pricing!

8. Means-test Social Security and Medicare.

9. Identify the clearest annual waste of $100B in the federal budget.  Advocate the immediate abolition of this waste, with all savings going toward deficit reduction, not new programs.

10. Loudly and graciously thank taxpayers for their service.

Yes, I know that some of these proposals aren’t even in the hands of the federal government, but the same applies to a great deal of what presidential candidates say.  And on reflection, it’s hardly crazy for candidates to make such proposals.  The bully pulpit aside, they can use federal funding to reward state and local governments that move in welcome directions.

So why are all of these planks likely to remain political orphans?  Half are doomed by demagoguery, and the rest by apathy.  Most people hate ideas like #5, #7, and #8; and if they don’t feel the hate spontaneously, any halfway skilled politician can readily kindle it.  In stark contrast, #1 and #2 are probably already popular.  But they fail to inspire passion, so they’re stillborn.

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Some Men Just Want to Watch Mexico Burn

In the introduction to La Vida, famed anthropologist Oscar Lewis unfavorably compares Puerto Rico to Mexico:

But perhaps the crucial difference in the history of the two countries was the development of a great revolutionary tradition in Mexico and its absence in Puerto Rico.  Puerto Ricans sought greater autonomy from Spain during the nineteenth century, but they were never able to organize a revolutionary struggle for their freedom, and the single attempt along this line, at Lares, was short-lived and never received mass support.  By contrast the Mexicans fought for their independence from Spain between 1810 and 1821, drove out the French in 1866 and later produced the great revolution of 1910-20 with its glorious ideals of social justice.  In the course of these struggles great heroes emerged, men who have become symbols of the Mexican spirit of revolution and independence.

La Vida was published in 1965, just 45 years after the end of the Mexican Revolution.  Lewis personally knew many Mexicans who lived through it.  But what actually happened during this “great revolution” with its “glorious ideals of social justice”?  The best paper I could find on the topic is Robert McCaa’s 2003 paper “Missing Millions: The Demographic Costs of the Mexican Revolution” (Mexican Studies 19, pp.367-400).  After a detailed review of earlier estimates, McCaa deploys new techniques to reach a grim conclusion:

The human cost of the Revolution was paid mainly in blood. Of a total demographic cost of 2.1 million, excess deaths accounted for two-thirds,  lost births one-fourth, and emigration considerably less than one-tenth of the total… The best two-sex inverse projection to 1930, taking into account the age and sex distribution of the population in that year,  points to some 3 million missing as of 1921. Census error in the 1921 enumeration reduces this figure by 1 million. Two-thirds of the remainder was due to one factor: excess mortality (1.4 million deaths), with 350,000 more male deaths than female. Lost births were substantially less at 550 thousand. Smaller still, at less than 10 percent of the total loss, was emigration to the United States, with the persisting number of male “refugees,” generously defined, slightly more than 100,000, and females about three-fourths of this figure.

The basic history of the Mexican Revolution, moreover, was hardly “heroic”:

[O]nly six months passed between Francisco I. Madero’s pronouncement of revolution (November 20, 1910) and the overthrow of the old dictator Porfirio Díaz. The resignation of Díaz came in late spring 1911 and was accomplished with little violence or destruction. The fighting scarcely began until 1911… Victory at Ciudad Juárez came to the revolutionaries on May 10, 1911, after a siege lasting only a couple of days… Although the fall of Díaz was achieved due to uprisings throughout the republic, the cost of the Revolution, to this point, was probably only a few thousand deaths.

The real fighting began as the revolutionaries trained their weapons on one another over the course of the following six years… Zapata, having waited four months to rebel against the hated Díaz, did not allow four weeks to pass before rebelling against the enormously popular Madero. In late November 1911, Zapata, “tired of waiting” for Madero to carry through an agrarian revolution, according to the conventional view, denounced Mexico’s first democratically elected president by proclaiming the Plan of Ayala. Yet, until 1912, Zapatistas did not pose a serious threat to the Madero government. Elsewhere regional bands (and bandits), some with plans, others without, escalated the plundering of the countryside, hamlets, and towns. As is well known, within two years of Díaz’s resignation the nation slid into chaos…

With the assassination of Madero on February 21, 1913 –- probably on the order of the Madero-appointed commander in chief of the federal army, Victoriano Huerta—civil war erupted. The usurper proved incapable of suppressing the many revolts… [A]fter the failure of the Convention of Aguascalientes to resolve the differences of regional warlords, an even bloodier phase of the Revolution began, as, once again, the victors turned on one another.The year 1915 was the year of hunger. Marauding bands destroyed the few crops that were sown, many before they could be harvested. Destruction continued into 1916, although with the defeat of the northern chieftain Pancho Villa at the Battle of Celaya in April 1915, the violence began to wane, however slowly. Devastation was made worse by the Spanish influenza epidemic of 1918/19, to be examined in detail below.

McCaa thoughtfully concludes:

Given the magnitude of the human losses caused by the Mexican Revolution, the silence of some scholars and disbelief by others is surprising…

For the Americas, both North and South, the Mexican Revolution was the greatest demographic catastrophe of the twentieth century. From a millennial perspective,the human cost of the Mexican Revolution was exceeded only by the devastation of Christian conquest, colonization, and accompanying epidemics, nearly four centuries earlier.

How then could as knowledgeable a scholar as Lewis credulously praise the sordid bloodbath that was the Mexican Revolution?  As a Marxist, he was obviously predisposed to positivity.  His gushing, however, would probably resonate with many non-Marxists, too.

What possesses anyone to so gush?  One could say, “You can’t make huevos rancheros without breaking eggs.  The war was tragic, but the results were great.”  Since we’re talking about Mexico, though, this seems absurd.  Sure, it’s a middle-income country, but violence remains a grave problem to this day.  And given its proximity to the U.S., gravity alone should have turned it into a peaceful, First World country by now.  The legacy of the Mexican Revolution is one of the better explanations for why this transformation has yet to happen.

In any case, people who admire revolutions rarely bother with counterfactual history.  What excites them is revolution itself.  Revolution is romantic.  The vision of tearing down the wickedness of the world, serving wrong-doers their just deserts, charging barricades with our brave leaders, and building a better world on top of the ashes is a thrilling story.  Counting corpses and asking, “What was it all for?,” in contrast, is a real downer.

If you share this romantic vision, you might even welcome my analysis: “Yes, I’m inspired by revolutionary idealism.  At least they tried.”  Yet calmly considered, this romantic vision is inexcusable.  Launching a bloody war without even asking, “How likely is this war to improve the world?” is as “romantic” as drunk driving at a playground.  Giving revolutionaries credit for “trying” is ridiculous.  If you combine brutality with wishful thinking about the consequences, your real goal isn’t to make those consequences a reality.  Your real goal is just to exercise brutality.

So why did Lewis gush over the Mexican Revolution?  Batman’s butler got it right: “Well, because he thought it was good sport. Because some men aren’t looking for anything logical, like money. They can’t be bought, bullied, reasoned, or negotiated with. Some men just want to watch the world burn.”  I’ve learned a lot from Lewis, but the less real-world influence people like him have, the better.

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Hypocrisy and Hyperbole

I teach at a public university.  Am I a hypocrite?  Bernie Sanders’ net worth is about $2M.  Is he a hypocrite?  How about vegetarians who regularly eat meat?

The right answer: It depends on the details of the speakers’ moral position!  Consider the following cases.

1. You say, “It is always morally wrong to eat meat,” but you still eat meat.  Are you a hypocrite?  Of course, because you break your own absolute rule.

2. You say, “We have a duty not to eat meat, except in extreme circumstances,” but you still eat meat.  Are you a hypocrite?  Almost certainly, because we’re rarely in extreme circumstances.

3. You say, “Eating meat is very bad,” but you still eat meat.  Are you a hypocrite?  Probably.  Yes, you could believe there are important offsetting moral factors that justify your meat consumption despite its badness.  But if you thought these offsetting factors were important, you probably would have discussed them.  And if you think these offsetting factors are unimportant, what are the odds that they just-so-happen to excuse your meat consumption?

4. You say, “We should eat less meat,” but you still eat meat.  Are you a hypocrite?  Perhaps.  If your meat consumption is low or at least falling, your behavior is plausibly consistent with your principle.  Otherwise, not.

5. You say, “Government should discourage meat consumption,” but still eat meat.  You don’t say anything resembling #1-#4.  Are you a hypocrite?  Probably not – unless you’re a powerful politician who ignores the issue.

So how hypocritical are people, really?  Exceedingly so.  Why?  Because humans love hyperbole.  When they moralize, they gravitate toward strong versions of their moral positions.  They don’t like to say, “Well, government should raise taxes on the rich; but until that day, the rich are doing nothing morally wrong.”  Neither do they like to say, “The rich should give 13% more money to charity.”  These positions aren’t fun.

Instead, people like to say things like, “It’s a crime for billionaires to exist in a world with hunger” or “The rich are nothing but a bunch of bloodsucking parasites.”  And when you make such extreme statements, you routinely end up condemning yourself as well – at least by extension.  After all, if it’s a crime for billionaires to exist in a world with hunger, why isn’t it also a crime for millionaires?  For single adults who make $30k a year?  Moralizing with hyperbole is like a detonating a massive moral bomb; unless you’re careful, you end up in your own blast radius.

Which brings us back to my initial questions.

1. Am I a hypocrite?  No, because I avoid hyperbole.  I don’t claim that anyone who teaches at a public university is a wrongdoer, evil, etc.  What I do claim is that (a) taxpayer support for education is extremely wasteful, and (b) politicians and their subordinates who forcibly extract that support have a moral duty to stop.

2. Is Sanders a hypocrite?  Of course.  Virtually every politician is a hypocrite, because hyperbole is their livelihood.  This is no surprise, because politicians are an evil bunch.  And that’s no hyperbole.

3. Are vegetarians who eat meat hypocrites?  Usually.  The modest vegetarians who eat meat once a month and say, “I’m just trying to help reduce animal suffering a little bit” are in the clear.  But any vegetarian who eats meat after claiming that “Meat is murder” – or even “Animal pain is just as morally important as human pain” is indeed a hypocrite.

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Klein on Groupthink

Dan Klein provides a powerful synthesis of research on what’s wrong with left-wing domination of the humanities and social sciences.  Even if you don’t want to watch the full video, read the slides!

My own thoughts: I don’t regard left-wing domination of the humanities and social sciences as the world’s most-pressing problem, or even the world’s tenth most-pressing problem.  As I explained in The Case Against Education, educators simply aren’t very persuasive, so they do far less intellectual damage than you’d think.  Indeed, despite their teachers’ biases, well-educated Americans tend to be social liberal but economically conservative.  How is this possible?

If educators are as left-wing as they seem, why would education have such contradictory effects on students’ stances? The charitable story is that educators keep their politics out of the classroom. The more plausible story, though, is that educators are unpersuasive. The Jesuits say, “Give me the child until he is seven and I’ll give you the man.” Society gives liberal educators the child until he’s fifteen, eighteen, twenty two, or thirty. But issue-by-issue, teachers are about as likely to repel their students as attract them. Educators could protest, “The problem isn’t that we’re unpersuasive, but that students are stubborn,” but students revise their opinions all the time. The longer they stay in school, the more they revise. They just don’t revise in a reliably liberal direction.

That said, left-wing domination of the humanities and social sciences bothers me more than many more serious ills.  Why?  Well, I am a professor, so…

1. Idealistically, I want the humanities and social sciences to flourish, not fester.

2. Selfishly, I’d like the world of ideas to be an exciting, friendly marketplace, not a boring, neurotic church.

3. Paternally, at least two of my kids want to be professors.  I’ve managed to create a Beautiful Bubble for myself, but I can tell they’ll have a tougher time than I did.

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I Win My European Unemployment Bet

In 2009, the U.S. unemployment rate exceeded Europe’s for the first time in decades.  Apologists for European labor market regulation rejoiced, so I publicly bet that European unemployment would exceed U.S. unemployment over the next decade.  The original authors I targeted turned me down, even after I offered a 1 percentage-point spread.  But noted economist John Quiggin took the bait.  Our final terms:

The stake is $US100 and the agreed criterion is that, for Bryan to win, the average Eurostat harmonised unemployment rate for the EU-15 over the period 2009-18 inclusive should exceed that for the US by at least 1.5 percentage points.

Ten years later, the bet’s results are now in.  The average U.S. unemployment rate during this decade was 6.8%.  The EU-19 (the original EU-15 plus the Baltics and Slovakia) was 10.3%.  Since the EU-15 is no longer widely available, Quiggin would have been within his rights to hold out for slightly adjusted numbers, but via email he has nobly decided to concede.   Since the Baltics and Slovakia have low populations, they couldn’t sway the final figure much – and in any case, unemployment rates for the Baltics and Slovakia aren’t major outliers.  The upshot is that I won the European unemployment bet by an enormous margin of 2 full percentage-points (on top of the original 1.5 percentage-point edge).

What does this all mean?  To me, this bet is just a small extra piece of evidence in favor of the orthodox and blindingly obvious theory that Europe has higher unemployment than the U.S. because it has stricter labor market regulation.  Flexible labor markets respond more sharply to shocks, but yield lower unemployment rates overall.  As I originally explained:

During the dot-com bust, U.S. unemployment remained below Europe’s, but it clearly rose faster.  Isn’t this further evidence that the mainstream case against European labor market regulation is overstated?

On the contrary, this is precisely what the mainstream case predicts!  Europe makes it harder to get rid of workers, so it’s only natural that when a big shock hits, U.S. unemployment rises more.  However, precisely because it is easier for American wages to adjust and American employers to change their minds, our labor market is also relatively quick to recover.

Disclosure: From the outset, Quiggin argued that the U.S. unemployment rates were artificially suppressed by high incarceration.  This has always seemed crazy to me, as I explained back in the day:

From a labor market perspective, though, Quiggin’s incarceration adjustment would only make sense if you thought that most or all of the people in jail would be unemployed if they were released.  That doesn’t make sense to me – while the people currently in American prisons might not be model workers, most of them could easily be gainfully employed on the outside.

Notice: Even if you think that the people in jail have no desire to work, you’d expect this to show up in labor force participation, not unemployment.  After all, to keep counting as unemployed, you have to keep trying – and failing – to find a job.

That said, I heartily commend Quiggin for actually making our bet.  He towers above all of the apologists for European labor market regulation who refuse to put their money where their mouths are.

Stepping back: Isn’t it possible that European-style labor regulation still helps workers, because the extra wages outweigh the lost hours of employment?  To be fair, this optimistic story is consistent with standard estimates of labor demand elasticity.  However, the optimistic story overlooks a pessimistic truth: Most of the harm of unemployment is psychological, not material.  Holding income constant, the employed are much happier than the unemployed.  Hence, no sensible person would want to see U.S. workers’ wages rise by 10% if the unemployment rate rose 3.5% as a result.  And psychology aside, remember that the welfare state forces active workers to support the idle.  So when regulation forces wages up, even the lucky workers who keep their jobs ultimately forfeit much of what they gain.

What did I learn from this bet?  Back in 2009, I was unaware that Germany had seriously liberalized its labor markets a few years earlier.  Since then, German unemployment has fallen from a peak of over 11% in 2005 to 3.3%.  The Great Recession barely happened in Germany; unemployment inched up from 7.1% in late 2008 to 7.9% in mid-2009, then continued its free fall.  There’s no reason all of the other high-unemployment countries in Europe can’t swallow their pride and follow Germany’s path to progress.  Well, unless “We’re too busy debating populism versus socialism” counts as a reason.

By my count, this betting victory brings my record to 19 wins, 0 losses.  Yes, perhaps I’ll see my first defeat later this month.  But even if I do, I’m not afraid to repeat that I have publicly demonstrated that my judgment is good.  And in my demonstrably good judgment, radical deregulation of Europe’s labor markets is long overdue.  I’m happy to make the Quiggin bet all over again with anyone who’s interested, but what’s the point?  My homeschooled sons understood all of this when they were 12.  Forget ideology.  Let’s all join hands, admit that labor market regulation is a scourge, and tear down these paper walls.

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