Andrew Gelman peers into the land of economists from the land of statisticians and wonders why everyone is arguing over a policy that will never ever happen. It probably looks a little like listening to two cancer doctors argue over whether we could cure a poisonous bite from an alien. “What?!? Why are you arguing about that? Don’t you have cancers to cure?”

I think I can help explain some of the underlying impulsion going on here. I apologize in advance for the gross generalizations that follow.

Libertarian economists who are arguing that decreasing the minimum wage would increase unemployment want a cudgel with which to bash liberal economists who are arguing for a variety of fiscal stimulus. This puts liberals into the position of either accepting that the minimum wage should be cut -and ooh that stings to a liberal!- or admitting that their primary goal isn’t really creating jobs, but rather promoting progressive policies (this is the secret suspicion of libertarians everywhere). This would be a bitter pill to swallow for liberals, and they would hate to give libertarians that satisfaction, so they are fighting back tooth-and-nail, declaring  “when you’re in a liquidity trap if prices go down quantity goes down too, and then the sun turns into a supernova!”

Let me put the phenomenon in a general framework: it’s gratifying to believe that your own group has the solution to a problem, but the ideology of the other group is getting in the way, especially when the other group is promoting their own solutions to the problem that conform with their ideology but are aggravating to your ideology.

This is why libertarian economists LOVE arguing about carbon taxes with environmentalists; to economists the solution to global warming is simple, and it does not involve micromanagement, moralizing, and making a lifestyle out of environmentalism- things the libertarian minded economist does not like. So environmentalists must either accept that economists have a solution that is better than all of the other policies and behaviors environmentalists spend so much of their time arguing for, or admit the environment really isn’t their primary concern. That is satisfying to the economist.

Paul Krugman once did a good job of explaining why economists overemphasize some issues that I think is in a similar vein to my theory:

But there’s also something going on with economists, a phenomenon I recognize wearing my other hat: the tendency to place excessive weight on issues where professional judgment differs from lay opinion.

The classic example is free trade versus protectionism. Economists are justly proud of the close reasoning that produced the classical case for free trade, and love to skewer dumb protectionist arguments. I’ve done it myself.

But all too often, economists then become like the little boy with a hammer, to whom everything looks like a nail. Because protectionism is an issue on which they believe they have some special insight, they inflate its importance, and make free trade versus protectionism THE crucial issue in economic policy — which it isn’t.

So I think that’s part of the motivation. The other part is that it is fun to argue about these things, and flex your fundamental economic-theory-muscles. Notice none of the tools being used are very complicated; it’s elementary partial or general equilibrium analysis. Nor is the policy being debated something abstract or complicated to intuit; “what are the effects of the minimum wage in a recession?” is a fundamental topic. There’s a beauty in the simplicity of an argument as pure and fundamental as this when so much of what economists do and are trained to do is complex, abstract, and in pursuit of unintuitive goals like maximizing the utility of an infinitely lived representative agent. In a way that I can’t really explain, it’s a little like watching a lightsaber fight. Jedis spend their lives learning to be one with the universe, see the future, and becoming masters at piloting complicated flying machines, but in the end, all those deep and complex skills all get boiled down to a sword fight.

[Hat tip to Mark Thoma on the Andrew Gelman post]

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