Sunday, March 20, 2011

Disagreement

Paul Krugman (see this for example) seems to think that (i) we can clearly identify "saltwater" and "freshwater" macroeconomists; (ii) the saltwaters are "liberal," i.e. they vote for Democrats; (iii) the freshwaters are conservative, i.e. they vote for Republicans.

First, the saltwater/freshwater distinction, while it could be applied (roughly) in the 1970s, makes no sense today. People and ideas are highly mobile in the economics profession, and ideas grow and mutate. Take Krugman's own department (the economics department at Princeton) for example. We have Alan Blinder, a solid Old Keynesian; Pat Kehoe, who went to Harvard, worked with Tom Sargent, and spent a considerable part of his career at the Minneapolis Fed and the University of Minnesota; Nobu Kiyotaki, who wrote a seminal paper with Blanchard on menu costs, also worked with Randy Wright (a Neil Wallace student), and worked for a time at the University of Minnesota; Chris Sims, also a former Minnesota professor, but a guy who clearly has Keynesian ideas; and Richard Rogerson, who is a Prescott student and Minnesota graduate. Is that a freshwater or saltwater department? Why would you even ask the question? And all those people could easily be Democrats, for all I know.

There might be people out there who are looking for a political party that represents tolerance, a sense of community and shared responsibility, and the judicious use of economic science. That political party does not exist in the United States, so we have to choose the lesser of two evils.

Paul Krugman sees injustice and would like the poor to be better off. He wants to promote the fortunes of the Democratic Party. But dissing "freshwater" economists won't aid in that goal, in part because those animals do not exist. Whatever Krugman says, the 1970s freshwater ideas have been found to be useful, and put to work in any number of ways, even in Krugman's own work. No one can kill a useful idea.

People are generally pretty polite and leave politics out of their casual conversations. But judging from my conversations with people at places Krugman would call "freshwater," there were a lot of Democrats around, maybe even a majority. A prominent 1970s freshwater economist once told me: "There are two people I can't stand. One is the President of the United States, and the other is my brother-in-law." That was during the George W. era. I think that guy would also object to most of what Krugman writes. I think it is good to seek support wherever you can get it. Maybe Krugman is shooting himself in the foot.

12 comments:

  1. His constant shilling for the largely nonexistent freshwater/saltwater divide is probably the best evidence that he isn't a serious macroeconomist anymore.

    The childish view that boils economic science down to a few competing sports teams is popular amongst laymen, and since Krugman's job is now to write columns for laymen I'm guessing that's why he says things like that.

    Prescott is a rather extreme conservative Republican. Timothy Kehoe is a lifelong Democrat and the son of a union organizer. Yet they've worked extensively with each other at Minnesota and the Minneapolis Fed.

    I wouldn't be surprised if half (maybe more) of the faculty at Minnesota, Chicago etc. are Democrats.

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  2. Yes, well put. I wasn't going to name names, but I don't think Tim would mind.

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  3. There is another supposed "freshwater" who was a Communist before he/she went to graduate school.

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  4. Dan Klein has published the data on the party affiliation of economists at many of the top econ departments, if the facts are of interest to anyone.

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  5. Some of Daniel Klein's research:

    www.ratio.se/pdf/wp/dk_ls_diverse.pdf


    The ratio of economists voting Democrats to economists voting Republicans is 3.0 to 1.

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  6. Though economists are Democrats, apparently, they are certainly not seen by other academics as being very progressive. We are continually having fights in universities about things such as how to price parking spaces.

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  7. Well, Democrat economists like Sumner say things like: the most important thing a student can learn is how diverse knowledge can produce overall wealth and order when private parties are organized via freely changing relative prices.

    The makes makes Democrat economists a whole different species from English professors and sociology department members.

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  8. At the risk of arousing Steve's ire, let me use freshwater as a synonym for "economists who place relatively less emphasis on government intervention to fix nominal rigidities."

    Is that fair, Steve? I realize that it lacks nuance.

    I suspect that freshwaters are a bit more likely to vote Republican, though there is plenty of crossover, mostly from freshwaters voting Dem.

    In my experience, many/most economists place heavy emphasis on non-economic (social/foreign) policies in their political affiliations. Most economists are also more forgiving of the economic "mistakes" of the party that they support for non-economic reasons. In contrast, most economists hold the other party's "mistakes" to be evidence of their stupidity or greed. This is natural human behavior.

    Klein's results o political affiliation are consistent with my own experience and the results of polls taken before the 2008 elections.

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  9. last anonymous,

    Good, but don't tell that to the sociologists and English professors.

    Chris,

    There are some people who seem to have freshwater roots but are nevertheless interested in the nominal rigidities. Maybe they are just curious.

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  10. Robert Lucas identified himself as a socialist before he attended graduate school (I think he said he changed after taking Friedman's "Price Theory"). Buchannan was apparently one before attending graduate school, as well.

    If the climate change debate was over what action to take as opposed to whether to take action or not, I am sure the same individuals would seek to divide economists based upon whether they follow the findings of Stern or Nordhaus.

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    ReplyDelete