Ideological differences in the left and right – without buzzwords!

Greg Mankiws class discusses:

A summary:

  1. The right sees large deadweight losses associated with taxation and, therefore, is worried about the growth of government as a share in the economy. The left sees smaller elasticities of supply and demand and, therefore, is less worried about the distortionary effect of taxes.
  2. The right sees externalities as an occasional market failure that calls for government intervention, but sees this as relatively rare exception to the general rule that markets lead to efficient allocations. The left sees externalities as more pervasive.
  3. The right sees competition as a pervasive feature of the economy and market power as typically limited both in magnitude and duration. The left sees large corporations with substantial degrees of monopoly power that need to be checked by active antitrust policy.
  4. The right sees people as largely rational, doing the best the can given the constraints they face. The left sees people making systematic errors and believe that it is the government role’s to protect people from their own mistakes.
  5. The right sees government as a terribly inefficient mechanism for allocating resources, subject to special-interest politics at best and rampant corruption at worst. The left sees government as the main institution that can counterbalance the effects of the all-too-powerful marketplace.
  6. There is one last issue that divides the right and the left—perhaps the most important one. That concerns the issue of income distribution. Is the market-based distribution of income fair or unfair, and if unfair, what should the government do about it? That is such a big topic that I will devote the entire next lecture to it.

I strongly disagree with #2. See my post from yesterday. I think both parties benefit equally from market intervention. While historically, a “conservative” believes in a non-interventionist theory of market control, I do not think politicians generally follow this rule. I think they advocate intervention when it benefits them politically or personally – regardless of theory.

Curious to hear more feedback.

Advertisements

4 Responses to Ideological differences in the left and right – without buzzwords!

  1. jonolan says:

    I strongly disagree with 1 – 6; “I think they advocate intervention when it benefits them politically or personally – regardless of theory.”

  2. lionelboydjohnson says:

    I would agree with you that politicians often don’t fit the established polarized paradigms of their electorates, but is your statement suggesting that citizens in either paradigm will advocate intervention when it benefits them politically or personally?

    I think that argument could be made – I’m strongly against identity politics for that reason – you lose the theoretical base for some arguments when your advocacy is for intervention for personal gain

  3. jonolan says:

    I think specifically that politicians do what they feel benefits themselves, not necessarily what their political “view” would dictate. As politicians are surrounded by PACs and others willing to supplement their income, politicians have immense opportunity to further their own aims.

    The same attitude does hold true for most of the citizenry as well. Right or Left pale in importance vs. personal gain. And that doesn’t even take into account people like myself who are varied between Right, Left and Centrist depending on the issue / question / principle.

  4. Michele says:

    Me and a co-author have recently completed a paper on the analysis of

    economists’ disagreement and of its determinants.

    http://micdimaio.googlepages.com/DeBenedictisDiMaio2008-Economistsvie.pdf

    As a case study we took the Italian profession and we measured Italian economists’ disagreement about : 1) the cause of the difficulties of the Italian economy; 2) which are the most effective policy proposals to solve the economy’s problems.

    Then we relate the respondent’s opinion on each specific policy proposal to her individual characteristics, academic profile, methodological approach and political opinions.

    We find that the political view of the respondent matters a lot in explaining difference in the judgement of a policy proposal but which aspect of her political view matters most depends on how much controversial the policy proposal is.

    We have also prepared a website for additional documentation on the survey – the questionnaire, other descriptive statistics, etc.. The link is:

    http://micdimaio.googlepages.com/surveyofitalianeconomists

    No need to say, whatever comments or suggestion is more than welcome.

    Ciao,
    michele

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: