Friday, July 6, 2012

The "Other" Economics

I have been doing my best to escape the "echo chamber" effect.  In my case, of course, it means seeking out non-Keynesian perspectives, and while David Brooks may be enough to satisfy most Times readers, he's not enough for me.  Hence, I listen regularly to Econtalk, a fascinating podcast hosted by Russ Roberts of George Mason University.  Roberts, who is keen on Hayek, interviews other economists, most of whom share many of his views.  (I haven't heard him go up against a real Keynesian yet, but I think it would be great fun to hear him converse with Robert Skidelsky.)

In his most recent podcast, Roberts interviewed Luigi Zingales of the University of Chicago (as in "Chicago school of economics.")  Like Roberts, Zingales believes in the power of markets to achieve the greatest efficiency — but he also is concerned about the widening disparities of wealth and income in the United States.  I won't try to distill the entire interview into a single blog post, but I want to mention a couple of points that perked up my ears.

First, Zingales asserts that government intervention in the economy is necessary to keep the free market functioning correctly.  Roberts agrees, citing no less an authority than Adam Smith.  The impact of wealth on politics, it seems, can lead to market failure.  Zingales points to a little noticed feature of our most recent bankruptcy legislation, which requires that the first to be paid when a company fails are the holders of derivatives.  Guess who lobbied for that provision.

Another idea that jumped out at me was that being pro-free market is not the same as being pro-business.  Businesses are far less interested in free markets than in gaming the system in their favor.  Makes sense, no?

Anyway, getting out of the echo chamber informs us that real economists (which excludes that asshole and Romney adviser Arthur Laffer) are not lined up with the Republican Party or Fox News.  Needless to say, neither Roberts nor Zingales mentioned that specifically, but the message comes through.

Download the full interview and listen to it.  It goes a bit over an hour, so maybe you'll want to listen on a long drive or during an insomniac night.  Still, it's much more interesting than those vampire and/or self-help audiobooks.  Then, subscribe to Econtalk on iTunes or whatever.

Get out of the bubble.

Update: after this post originally went online, Roberts interviewed neo-Keynsian Joseph Stiglitz. It was a fascinating conversation — nothing. Russ Roberts argues for the Austrian School in a way that helps us to understand why Keynes and Hayek, in their personal lives, got along so well.

No comments: