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Conservative Pigs and Liberal Bonobos
Herb Gintis reviews Krugman on Amazon:
Krugman's vision for the future has three key premises, all wrong. First, he believes progressives can win on a platform of redistributing from the rich. However, no one cares about inequality. People care about injustice, unfairness, poverty, sexual predators, family values, gay marriage, terrorism, and many other problems of everyday life. People don't care about Gini distributions and other abstractions. Moreover, Krugman should know that if the wealth were redistributed to the middle class, the US investment rate would fall, since the rich save their money and it is translated into investment, whereas the middle classes would spend their gains on consumption, thus driving out investment. A "soak the rich" policy simply cannot work to the advantage of the middle classes.
Second, Krugman would strengthen the labor unions, which he credits for their egalitarian effects. However, unions were strong only when industry was highly non-competitive in such areas as automobiles and steel. The oligopolistic character of mid-twentieth century industry, with a few countries in the lead, made fighting over the excess profits highly rewarding. With globalization, there are no excess profits to be fought over. Thus, it is not surprising that most successful unions in the USA are public service, not private (e.g., teachers, government employees). There is no future in unionism, period.
Third, Krugman believes that liberalism can be restored to its 1950's health without the need for any new policies. However, 1950's liberalism was based on southern white racism and solid support from the unions, neither of which exists any more. There is no future in pure redistributional policies in the USA for this reason. Indeed, if one looks at other social democratic countries, almost all are moving from corporate liberalism to embrace new options, such as Sarkozy in France (French socialists have the same pathetic political sense as American liberals, and will share the same fate).
I am sorry that we can't do better than Krugman. There are very serious social problems to be addressed, but the poor, pathetic, liberals simply haven't a clue. Conservatives, on the other, are political sophisticated and hold clear visions of what they want. It is too bad that what they want does not include caring about the poor and the otherwise afflicted, or dealing with our natural environment. Politics in the USA is no longer Elephants and Donkeys; it is now conservative Pigs and liberal Bonobos. The pigs are smart but only care about what's in their trough. The Bonobos are polymorphous perverse and great lovers, but will be extinct in short order.
Hat tip to PrestoPundit.
Posted by Alex Tabarrok on November 27, 2007 at 08:21 AM in Economics | Permalink
Comments
"Conservatives, on the other, are political sophisticated and hold clear visions of what they want"
If we are talking about politicians only, then I can at least see some justification. If we are talking about the general populace on average that holds conservative values, the statement is, at best, the opposite of true.
Posted by: Aaron Fix at Nov 27, 2007 8:57:34 AM
The review would have been a lot stronger if Gintis had omitted that last paragraph.
Posted by: Missy at Nov 27, 2007 8:58:53 AM
I don't understand the premise (also promoted by Reich) that profits are
low because of competition. Profits are at a record high! He means
manufacturing profits. Basically the world decided in the 1980s that it
needed more competition and so moved to reduce trade barriers. It worked
for a while, but increasing returns to scale are increasing returns to
scale and oligopoly is returning.
Posted by: reason at Nov 27, 2007 9:25:53 AM
Bonobos are clearly smarter than pigs also not particularly perverse sompared to other animals. Southern white racism still exists even if it doesn't favor liberals (exactly the opposite.
Posted by: Michael Foody at Nov 27, 2007 9:29:46 AM
Herb Gintis: "It is too bad that what they want does not include caring about the poor and the otherwise afflicted"
Do liberals believe this about conservatives or is it just politics? Certainly the right has its share of kooks and bigots. I've been working with conservatives for 27 years, and I am certain that the kooks and bigots are a small minority.
Most conservatives believe - and this is opposite of what most liberals believe - that assisting "the poor and otherwise afflicted" just makes them dependent on that assistance.
Most conservatives believe that the near-monopoly the state has on childhood education - and the resulting failure of that monopoly - prevents some children of "the poor and otherwise afflicted" from rising out of their economic class.
Most conservatives believe that "the poor and the otherwise afflicted" have the ability to improve their situation in life without assistance.
Most conservatives believe that affirmative action has harmed far more of "the poor and otherwise afflicted" than it could possibly have helped.
Unfortunately, Herb Gintis has no friggin' clue what most conservatives want or believe.
Posted by: John Dewey at Nov 27, 2007 9:38:14 AM
Right, Foody. Contemporary conservatism is based on southern white racism, and will doubtless seem no less incoherent than 1950s liberalism in the decades after its collapse.
Posted by: Anderson at Nov 27, 2007 9:39:17 AM
Are you sure that this is the real Gintis?
Anyone who can write: "But, these countries [France, Germany] are plagued by bureaucratic inefficiency and deeply threatened by the "lean and mean" up-and-coming countries like Poland, the Baltic States, Romania, India, et al.", clearly knows nothing about Poland, Romania or India.
Posted by: disinterestedobserver at Nov 27, 2007 9:49:02 AM
This blog seems to particularly favor a specific annoying style of posts that consist of two elements:
1) substantive dismantling of liberal arguments
2) unsubstantiated smears against conservatives
I think I'd prefer honest bias to this sort of balance.
Posted by: Chris at Nov 27, 2007 9:53:49 AM
Reason: " increasing returns to scale are increasing returns to
scale and oligopoly is returning."
Where is oligopoly returning, sir? Here's what I see in the U.S.:
- the share of the top three vehicle manufacturers is much lower than it was 30 years ago;
- the airline industry is deregulated, and route oligopolies no longer exist;
- telecommunications in the U.S. is no longer limited to AT&T and GTE, as it was 30 years ago;
- tiny oil refiners have gone out of business, but there are still over twenty operating in the U.S..
How many industries that were not oligopolies the past 20 years have become oligopolies today?
Posted by: John Dewey at Nov 27, 2007 9:54:54 AM
"Conservatives, on the other, are political sophisticated and hold clear visions of what they want."
He was almost sounding reasonable up to that point.
Posted by: M. Hodak at Nov 27, 2007 9:57:45 AM
Moreover, Krugman should know that if the wealth were redistributed to the middle class, the US investment rate would fall, since the rich save their money and it is translated into investment, whereas the middle classes would spend their gains on consumption, thus driving out investment. A "soak the rich" policy simply cannot work to the advantage of the middle classes.
Is the above true? I had always believed that it was true but then I read something by Julian Simon that said that said something like the middle class save as much as the rich. Did I miss read Julian Simon?
If it is true why are conservatives and libertarians not shouting it from the house tops? Even if it is true does that Federal Reserve provide a substitute for saving though money creation?
Does anybody know?
Posted by: Floccina at Nov 27, 2007 10:12:45 AM
All a liberal ever wants to do is level level level.
Posted by: ricpic at Nov 27, 2007 10:28:13 AM
Why, why, why is so much attention directed to Krugman's stuff?
Ignore him. He will wither.
Posted by: R. Richard Schweitzer at Nov 27, 2007 10:42:56 AM
I think I'm going to read 'Conscience of a Liberal' over the holiday, but I'd like to pair it with a conservative equivalent. Any suggestions on a counterpoint work?
Posted by: Neil at Nov 27, 2007 10:45:38 AM
An exercise;
Which is worse, the article in question or the comments section on this blog entry? They're neck in neck in the screaming downward race to Information Hell.
Posted by: perianwyr at Nov 27, 2007 11:01:36 AM
Can I ask a question about his view on unions? Checking in Mankiw, he says "In the end there is no consensus among economists about whether unions are good or bad for the economy. Like many institutions, their influence is probably beneficial in some circumstances and adverse in others." Way to sit on the fence...
But how many economists think, like Krugman, that unions are a great thing? Is this a fringe view or are a lot of people behind him on this?
Posted by: Simon at Nov 27, 2007 11:37:44 AM
Is this worthy of a MR entry? There's more informative reviews out there, and I realize that liberal-bashing hyperboles Gintis satisfies AT's need for a PK slam but comon.
Posted by: Mark at Nov 27, 2007 12:23:15 PM
> But how many economists think, like Krugman, that unions are a great thing? Is
> this a fringe view or are a lot of people behind him on this?
They like them, they just won't buy a car made by people who work for an American one that's all.
Posted by: Walter at Nov 27, 2007 12:29:27 PM
"But how many economists think, like Krugman, that unions are a great thing? Is this a fringe view or are a lot of people behind him on this?"
You can certainly make a case for unions as a cartel that counterbalances the monospony power of employers. But then you could defend a lot of cartels on that basis. And it doesn't look like there's a whole lot of monopsony power in most labor markets. And I don't see pro-union economists defending a lot of other cartels on this monopsony basis, even where it might make more sense than in the labor context.
I think this is one of those cases where some economists do some wishful thinking and suffer some confirmation bias and attach themselves to a pro-union theory based on monopsony power, mainly to stay in the good graces of their political allies. (I mostly think that self-deception, rather than explicit cynical selling out, plays the dominant role in this process.)
I'd say that economists, perhaps like most people, systemically underestimate their own capcity for and tendency towards self-deception. This reduces their usefulness in informing policymaking.
Posted by: Keith at Nov 27, 2007 1:10:21 PM
Why would unions be bad for the economy? I can understand how bad labor laws might be bad for the economy. But it is bad legislators who write and pass bad labor laws.
Unions do not necessarily make companies uncompetitive. Southwest Airlines is the heaviest unionized of U.S. airlines. Yet they are also the most profitable, and the fastest rgowing over the past two decades.
Posted by: John Dewey at Nov 27, 2007 1:16:15 PM
Gintis also says;
I suspect Krugman is correct in saying that the degree of inequality in the USA today is the product of politics, not economic necessity.
That's quite a concession.
Then he writes:
Moreover, Krugman should know that if the wealth were redistributed to the middle class, the US investment rate would fall, since the rich save their money and it is translated into investment, whereas the middle classes would spend their gains on consumption, thus driving out investment. A "soak the rich" policy simply cannot work to the advantage of the middle classes.
So the stupid middle class doesn't know what's good for it, and would just waste the money, while the Paris Hilton's of the world build factories that benefit everyone. Hardly in keeping with the idea that people should be trusted to act rationally in their own interest.
In any case, the combination of the two suggests that Gintis approves of redistribution of wealth upward, but not downward, so that our betters can protect us from our own misjudgments. Somehow I wouldn't think a libertarian like Alex would find these views to his liking. But maybe any Krugman-bashing at all appeals to him, as it does to so many.
Posted by: Bernard Yomtov at Nov 27, 2007 1:30:51 PM
There are two important points that this critique misses:
1) Unions impact on the political process should not be neglected. A big part of the value in unions is aggregating financial resources to counter the influence of corporations in the political process. I know libertarians don't like to think this way, but labor and trade laws have a pretty big impact on the circumstances of labor and those laws are being contested politically.
2) Redistributing resources downward may be bad for medium term investments, but it is a very important long term investment. We know that educational attainment and success are closely tied to things like income level. Taxing the rich to provide for better prenatal care, early child development and improved education of the poor and middle classes will lead to a more productive work force in the long run. This is the long run conservatives typically fail to see. In the United States, currently, there is not a lot of concern for gini indexes. But there is in Europe. I don't think its reasonable to assume that the political views of Americans can never shift in this direction. And their is a sound basis for arguing that the redistribution of wealth will be better for everyone in the long run. Plus, its nice to turn that argument around on conservatives. They're always willing to tell the poor that they need to sacrifice now to benefit more in the long term. But with the current state of social support for the poor, I think you can make a strong argument that the rich need to sacrifice a little now to benefit in the long run by having more productive employees to hire and invest in.
Posted by: mpowell at Nov 27, 2007 1:43:08 PM
I agree, John. In the right legal context, i.e. one where the employer is not legally obligated to negotiate with unions, unions can be very useful.
I think unions could definitely have a future in corporate settings by acting as a direct conduit from workers to the board of directors, enabling workers to report managerial misconduct and waste directly to the board. This would protect shareholders, and it would be helpful to many corporate cultures.
Maybe the future of unions is to be found in the financial sector!
Posted by: Keith at Nov 27, 2007 1:44:26 PM
Keith,
Southwest Airlines employees tell me their management views union leaders as the legitimate spokesmen for their employees. As such, they are treated with great respect by Southwest.
IMO, it is more efficient for management to negotiate workplace practices with the leaders of a large group than to settle employee disputes on a case by case basis. Unions generally filter out frivolous employee complaints. In some companies, they also approve specific disciplinary actions, which eliminates arguments of injustice. Labor and management can work together in functional businesses.
I worked for FedEx for 13 years. Fred Smith and his management team went to extraordinary lengths to keep employees happy and reduce the chance of unionization. One of Fred's closest lieutenants confided to me that some of his peers questioned that strategy. They claimed it would be easier to deal with two or three unions than with the individual grievance system FedEx has installed.
Posted by: John Dewey at Nov 27, 2007 2:05:47 PM
Right, John, and I believe it certainly helps the relationship in that Southwest is not legally obligated to deal with the unions.
Let's distinguish between the desirability of negotiating with unions under certain circumstances and the desirability of legally mandating such negotiations. I have no problem with the former.
Marriage may be good, but it may not be desirable to legally obligate people to get married.
Posted by: Keith at Nov 27, 2007 2:28:00 PM
