Evans on Mankiw and Ad Hominem Attacks

Richard W. Evans of Econosseur compares Greg Mankiw's courteous debating style to Milton Friedman's in, "On Economic Debate--the ad hominem index."

Anna Schwartz is the author of a book review that came out in this month's (June 2009) Journal of Economic Literature on a recent biography of the economist and Nobel Laureate, Milton Friedman. One of her criticisms of the new Friedman biography is that the author missed one of the most important aspects of Friedman's personality--his style as an economic debater. She says,

For example, Friedman's style as a debater reveals an aspect of his personality. He was always courteous to his opponents in a debate, never attacked ad hominem. He concentrated on weaknesses of the opponent's arguments and invariably emerged as the victor in the debate...

I regularly read the commentary from both Mankiw and Krugman in their blogs and in the newspapers. Notice that Krugman's pieces include adjectives like "disingenuous", "evil", and "ignorant" in describing his opponents.

On the other hand, try to find an ad hominem point in any of the following Mankiw responses to Krugman statements (post 1, post 2, post 3). In fact, Mankiw goes out of his way to compliment Krugman on the points on which they agree (post 4, post 5, post 6). I couldn't find any citations in which Krugman compliments or cedes anything to Mankiw.

Evans' full post is worth reading, as is his joke page.

Although not strictly a debate, I have linked to a video of Friedman answering what was intended to be a tough question posed by Phil Donahue. It is a great example of a courteous and humorous response that devastated his opponent's position.

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No Citizen Gets Ahead

Under the banner, "No Child Left Behind," President Bush attempted to improve educational standards, particularly for underachievers.  President Obama has unfurled a new banner, "No Citizen Gets Ahead," in his attempt to improve the welfare of the poor.  He plans to raise the top income tax rate to 40%, cut deductions--even charitable deductions, remove the cap on social security taxes, and now foist the cost of health care for the poor onto the rich.  Laura Litvan and Ryan Donmoyer of Bloomberg write ("Democrats Weigh Health Mandate as Obama Urges Taxing Wealthy," June 7, 2009),

President Barack Obama wants Congress to consider taxing the wealthy instead of workers to pay for a health-care overhaul, as House Democrats discuss a plan to require health insurance for most Americans...

The president is trying to avoid broad-based levies such as a Senate proposal to tax some employer-provided health benefits Axelrod said. Instead he is urging lawmakers to reconsider limiting all tax deductions for Americans in the highest tax brackets.

“He made a very strong case for the proposal that he put on the table, which was to cap deductions for high-income Americans, and he urged them to go back and look at that,” Axelrod said on the CNN’s “State of the Union.” Goolsbee, appearing on “Fox News Sunday,” said Obama is “mindful” about how “ordinary Americans are able to foot the bills” and never proposed taxing employee benefits.

Apparently, some of his top campaign donors (the wealthy) misread candidate Obama's populist rhetoric for demagoguery, which is OK (Leonard Doyle, "Barack Obama's rich supporters fear his tax plans show he's a class warrior," Telegraph.co.uk, May 9, 2009).

Wealthy Wall Street financiers and other business figures provided crucial support for Mr Obama during the election, backing him over the Republican candidate John McCain as the right leader to rescue the collapsing US economy.

But it is now dawning on many among them that Mr Obama was serious about his campaign trail promises to bring root and branch reform to corporate America - and that they were more than just election rhetoric.

A top Obama fundraiser and hedge fund manager said: "I'm appalled at the anti-Wall Street rhetoric. It was OK on the campaign but now it's the real world. I'm surprised that Obama is turning out to be so left-wing. He's a real class warrior."

Chris Edwards of the Cato Institute, a free enterprise think tank, said Democrats in Congress were unnerved by the president's latest plan to raise $210 billion over 10 years from multinational corporations.

Although I disagree with many of the administration's policies, taken individually, they are well within America's historical bounds of policy debates.  I understand the reasoning behind raising the top income tax rate to 40%.  It was that high under Clinton.  I understand the distorting effects of tax deductions.  I understand the need to increasing revenues for Social Security, and the desire to help the poor gain better access to medical care.  I don't understand the economic reasoning behind the administration's attempt to raise taxes on U.S. based multinationals.  But taken as a whole, they are a radical departure from past policy debates that constitute an assault on the freedom of all Americans who are economically successful.  President Kennedy said, "Ask not what your country can do for you--ask what you can do for your country."  The Obama administration has bent those words to, "Ask asks not what we can do for our country, but what the wealthy can do for us."  Milton Friedman's opening words in "Capitalism and Freedom" are as prescient now as they were in 1962 when they were penned. 

In a much quoted passage in his inaugural address, President Kennedy said, “Ask not what your country can do for you—ask what you can do for your country.” It is a striking sign of the temper of our times that the controversy about this passage centered on its origin and not on its content. Neither half of the statement expresses a relation between the citizen and his government that is worthy of the ideals of free men in a free society. The paternalistic “what your country can do for you” implies that government is the patron, the citizen the ward, a view that is at odds with the free man’s belief in his own responsibility for his own destiny. The organismic, “what you can do for your country” implies that government is the master or the deity, the citizen, the servant or the votary. To the free man, the country is the collection of individuals who compose it, not something over and above them. He is proud of a common heritage and loyal to common traditions. But he regards government as a means, and instrumentality, neither a grantor of favors and gifts, nor a master or god to be blindly worshipped and served. He recognizes no national goal except as it is the consensus of the purposes for which the citizens severally strive.

The free man will ask neither what his country can do for him nor what he can do for his country. He will ask rather “What can I and my compatriots do through government” to help us discharge our individual responsibilities, to achieve our several goals and purposes, and above all, to protect our freedom? And he will accompany this question with another: How can we keep the government we create from becoming a Frankenstein that will destroy the very freedom we establish it to protect? Freedom is a rare and delicate plant. Our minds tell us, and history confirms that the great threat to freedom is the concentration of power. Government is necessary to preserve our freedom, it is an instrument through which we can exercise our freedom; yet by concentrating power in political hands, it is also a threat to freedom. Even though the men who wield this power initially be of good will and even though they be not corrupted by the power they exercise, the power will both attract and form men of a different stamp.

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Being Good Vs Being Popular

Over the course of time, Russ Roberts, the host of EconTalk, has interviewed three Nobel Laureates in Economics whose work was not immediately accepted. The economists are Milton Friedman, Gary Becker, and Vernon Smith. You can listen to the interviews by following the links inserted on their names. All sciences have an established body of work, and these economists challenged the prior beliefs of their professions embody by that work. It is proper and fitting that great effort should be necessary to move the center of economic belief. It is also proper and fitting that their ideas, given empirical support eventually won out, and their contributions are now widely recognized.

In short, Friedman opposed what was then the dominant economic belief that markets were unstable, and that government intervention was needed in the form of fiscal policy to stabilize markets. He argued that markets were inherently stable, and that through sound monetary policy involving a rule, a constant rate of growth in the money supply, government could best maintain economic growth. He was a Monetarist in a Keynesian world. Much of his work is now incorporated into the two dominant schools of Macroeconomics that followed his academic career, New Classical and New Keynesian economics.

Gary Becker extended economic research into nontraditional areas began in 1955 with the economics of discrimination, and followed by human capital, the allocation of time, crime, and the family. Other economists, particularly older ones, tended not to notice Becker’s contributions because they were nontraditional. He missed job opportunities, and the recognition that lesser economists received. By the middle of the 1970s Becker noticed that young economists greatly admired his work, and furthered his research.

Vernon Smith introduced experimental economics to the profession. In 1955, with a new Ph.D. from Harvard he began to teach at Perdue University. He soon realized that he did not understand the connection between how people operated in markets and the theory of supply and demand. The conventional stories did not explain how market reached equilibrium.

He began experimenting on students, and gained great insight into how markets reached equilibrium. His work demonstrated that markets were more efficient than traditional models demonstrated--economic agents did not need perfect information, and the number of agents did not need to be large. He attempted to publish his work in the Journal of Political Economy, a journal that was generally pro-market. His paper work was not accepted for publication.

In his interview on EconTalk, Smith quips,

Why did I send it to the JPE? Why that's a University of Chicago journal, and I thought, what have I shown? I've shown that markets really work quite well, better than I anticipated, and better than the...conventional wisdom as we taught it in economics. So I said, I'll send it to the JPE because those guys in Chicago have a reputation for believing in markets so they'll like this. Well that was wrong. I think it became evident why it was wrong. If you believe in markets you don't necessarily need evidence.

Smith describes in some detail his travails in publishing his work. He submitted his paper twice, and both times the referees rejected the paper. Eventually, Harry Johnson took over as new editor and asked Smith to submit yet another revised version. Ultimately the paper was published and Smith quotes Johnson as saying,

I haven't been at this job very long and I've learned a lot. I've discovered that you have to keep evaluating everybody, including yourself. I have to confess that I was one of the original referees (that was negative on the paper), but you've convinced me.

Good work, hard work paid off, and acclaim followed.

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Friedman on Businesses and Markets

Many have noted an apparent paradox of businesses that demand freedom from government taxation, regulation, social engineering are begging for government bailouts. Today, we read that Bank of America will bet an additional $20 billion in taxpayer money on their bold investments (HT Drudge). Does anyone smell a moral hazard? In an episode of porn gone wild, Larry Flynt and Joe Francis are asking for a $5 billion bailout of the porn industry. It seems like the demand for porn is more elastic (responsive to changes in price) than porn executives believed and anti-porn leaders had feared. And who will forget the specter of auto executives driving to DC and eventually winning a $17.4 billion bailout.

In an EconTalk podcast of Milton Friedman hosted by Russ Roberts, Friedman explains that there is no paradox in business behavior. They are doing what's best for them.

[I]t's always been true that business is not a friend of a free market...It's in the self-interest of the business community to get government on its side. It's in the self-interest of a particular business...But the real puzzle—puzzle isn't quite the right word—the real problem here is where do you find the support for free markets? If free markets weren't so damn efficient, they could never have survived because they have so many enemies and so few friends. People think of capitalism or free markets as something that obviously is supported by business. People think that if a business party is a party in politics, it will promote free market. But that's wrong. It will be in the self-interest of individual businesses to promote a tariff here and a tariff there…

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