The Politics Of Economists

Scott Sumner argues that "economists tend to be people with liberal values and a right wing worldview." My ears prick up. He then tries to differentiate between economists' worldview and the general public's:

Consider the following common sense worldviews:

1.    People don’t respond very strongly to economic incentives.  (I.e., higher prices don’t discourage consumption by very much, and higher taxes don’t reduce peoples’ work effort very much.)

2.    Imported goods, immigrant labor, and automation all tend to increase the unemployment rate.

3.    Most companies have a lot of control over prices.  (I.e. oil companies set prices, not “the market”.)

4.    Policy disputes over taxes and regulations are best thought of in terms of who gains and who loses.

5.    Experts are smarter than the crowd.

6.    Speculators make market prices more unstable.

7.    Price gouging hurts consumers.

I define the economistic worldview as essentially the mirror image of the preceding seven assertions:

incentives matter much more than one would expect; imports, immigrants, and automation do not raise the unemployment rate, prices are primarily determined by market forces, tax and regulatory policies often have little overall effect on income distribution, and a big effect on efficiency, the crowd (or market) is smarter than the expert, speculators tend to stabilize prices, and price gouging is socially beneficial.  As you can no doubt tell, I use the term “common sense” in a derogatory way, much as a snobbish 19th century lady might have used the term “common.”

In this sense, economists are driven toward empirically observable and testable reality. They are doubt-driven, not faith-driven. Hence what I'd call their epistemological conservatism.