Monday, May 22, 2017

A Word About Noah Smith

Yesterday, Bloomberg columnist Noah Smith fired off a tweetstorm in reaction to a brief Washington Post column about a new book that traces the effect that American race policy had on Nazi Germany. The thrust of the book, Hitler’s American Model by James Whitman, is that when they were looking for instructive lessons in how to legislate a racist society, Nazi officials made ready use of the longest-established and, in terms of carrying out its policy aims, most efficient racist political structure then in existence: the Jim Crow South. Jeff Guo, the author of the column, also tweeted about the book, and Smith’s Twitter outburst took flight from Jeff’s tweets. Smith’s reaction is below. (Apologies for the lengthy screenshot-ing, but it deserves to be read in full, and any abridgement would render what follows suspect.)

On one level, Smith is absolutely right: history is an exercise in choosing an interpretation of facts and events. That inescapable aspect of its epistemology cannot and should not be maneuvered around or swept under the rug. It is why basically every currently-active practitioner would disavow the 19th century German historian Leopold von Ranke’s imprecation to write history “as it actually happened”—because that exercise is, fundamentally, impossible, even if they aspire to his thoroughness and open-mindedness in amassing copious evidence. The contemporary historian of the practice of history, Peter Novick, famously called this central problem in historiography “That Noble Dream”—to write objective history independent of the historian’s own coloration, and to have his handicraft recognized as having achieved that by his professional colleagues and the world at large. “That White Whale” might have been more apt.

But Smith’s take is a long, long way from Ranke’s. He’s not saying that we should “do history” independent of bias—he’s saying that we should welcome that bias, provided it goes in one particular direction: to glorify, rather than denigrate, the history of the United States, by which he means that accounts of less-than-honorable episodes and social structures should be subordinated to a narrative of progress, a moral umbrella that is continuously and unstoppably in the act of opening. To do otherwise is to invite an ultimate victory by retrograde elements.

Look at tweet number 5 above: “Did James Whitman get any of his facts wrong? Did Ed Baptist? I doubt it. But that’s not my point.” Here, Smith is referring to the controversy over Ed Baptist’s book The Half Has Never Been Told, which has occasioned violent protest from economic historians for treating slavery, and specifically the expansion of the unimaginably cruel plantation cash-crop-based slavery of the period just prior to the Civil War, as a necessary condition for the Industrial Revolution and the rise of modern market capitalism. The controversy between Baptist and his critics is well-covered by this article in the Chronicle Review.

Smith says Baptist probably got his facts right. (Baptist’s critics do not agree, but that is immaterial to the point at issue here.) Where Baptist, and Whitman, went wrong, qua Smith, is in their implication that these significant, potentially over-arching moral taints are the “real story” of America, as opposed to the mostly benign description offered by Smith.

This is a tendency common among economists, and that is the purpose of this blog post. Baptist’s (and Whitman’s) sin isn’t so much that they’re wrong, but rather that if they’re right, that means that America, and American capitalism in particular, are Bad. And if there’s any common theme in modern mainstream economics, it is that first and foremost, capitalism is Good.

This reminds me of a letter that frames a piece I wrote with Bernard Weisberger, also as it happens in Chronicle Review. It was sent on May 1st, 1886 by Arthur Hadley, then a junior professor of political economy at Yale, to his colleague Henry Carter Adams at the University of Michigan. By way of background, the previous year Adams had helped to found the American Economic Association, in part on the basis of a provocatively left-wing platform that took issue with the prevailing ideology of economics as it was then practiced in the oldest and fanciest academic departments and in non-academic organizations that assembled experts from across the late 19th century elite to opine on policy. Furthermore, since the AEA’s founding the previous September, social tensions had only heightened, and Hadley’s letter was sent the very same day that a general strike was called in Chicago, leading directly to the Haymarket Riot on May 4th.

In response to the AEA platform’s statement that “We regard the state as an educational and ethical agency whose positive aid is an indispensable condition of human progress,” Hadley wrote

The fact that the principles are true, only makes the danger of misinterpretation more serious. … My sympathies are in many respects strongly with the movement. My inclinations would have led me to join it from the first. But I was afraid, and still am afraid, of getting into a position which would do practical harm both to me and to others, where I should seem to be made an advocate of measures and maxims which I cannot but regard as dangerous in the extreme.

Like Smith in his infamous Tweet #5, Hadley is saying that the facts may well point to an interpretation with radical implications, but that makes it all the more dangerous, and therefore imperative that we reinterpret the facts to be more amenable to the powers that be. So what’s the harm in that?

Here’s where things get personal. Several years ago, Smith referred to me in the following way:

What Smith is accusing me of here is interpreting the facts about rising inequality—the subject under discussion—in such a way that it would validate what Smith considers to be my prior belief—in this case that the neoliberal revolution in economic policy-making caused substantial harm and should be reversed. Preferences about policy might color interpretations of fact, in other words.

But look what Smith did, like Hadley before him: colored his interpretations of fact to fit his ideological imperatives. The final tweet states it outright: if we follow the lead of Whitman and Baptist, then the fascists and the white supremacists win. And yet, Smith’s slander against me as “no such rationalist” is contrasted against… who else but himself?

Well—not exactly.

Speaking more generally, this is a big problem for economists. Certain truths cannot be brought into question, that capitalism is a force for moral good foremost among them—to say otherwise is to reveal oneself to be, ipso facto, “no such rationalist.” Yet here is the conclusion to my essay with Weisberger (first published in Democracy):

It’s hard to escape the conclusion that in exiling radicalism from the AEA and from mainstream economics, its practitioners attained enormous intellectual prestige and elite approval precisely by sacrificing the disinterested search for answers to the most controversial questions in economics to the professional imperative of gaining the approval of the elite.

That they abandoned "advocacy" under the banner of "objectivity" only raises the question of what that distinction really means in practice. Perhaps actual objectivity does not require that the scholar noisily disclaim advocacy. It may, in fact, require the opposite.

Smith is, in some ways, more honest than most, notwithstanding his slander against me: he’s openly telling us what he’s doing. Hadley’s letter was private, and few others commit their motives to paper (or pixels) at all. So in this spirit of honesty, let me implore him and the rest of our profession to recognize in themselves what they have been quick to denounce in others: an ideological motivation that colors the public, performative interpretation of facts.

UPDATE (5/23/2017)

I would like to make two further, related points arising from the debate this post created on social media:

1. Phil Cohen brought up the excellent point that Smith's motivated history of the United States just manifestly fails to accomplish what Smith says it would accomplish, namely that telling the sad tale of American white supremacy plays right into the hands of right-wing nihilists who want to burn it all down and are just searching for a moral justification by which to do that. Cohen's point is rather than the triumphalist history Smith wants us to be telling in fact has the deadening effect of blinding us to horrific recurrences, mostly prominently in recent memory, Donald Trump's victory in the 2016 election. Many of us who like to think of ourselves as the empirically-grounded Caucus of the Reasonable simply assumed that could not possibly happen, because for it to happen implies that the lie we'd been telling ourselves about American history must have been a comforting bedtime story that left us unprepared to fight against true fascism when it was finally arrayed before us.

2. This realization that we'd been rendered powerless by our too-rosy view of American history has occasioned a backlash, and that backlash has definitively gone too far. The backlash says that far from being impossible, Trump was actually inevitable, and any honest reckoning with the ever-present, power-exerting object that is white supremacy must lead us to this dystopic conclusion. That is the subtext behind this column by Zack Beauchamp: Trump's rise was just the final, predictable outgrowth of centuries of deep-seated racism. (I criticized the column here.) Furthermore, Beauchamp later argued, no class-based economic platform could possibly defeat him. Again, see my response.

Among a certain class of elite opinion-haver, with just enough knowledge of history to be dangerous, the view that the New Deal, for example, was affirmative action for white people (as opposed to what it really was: social democracy for white people) serves a useful purpose: since all of American history is white supremacist, nothing could have stopped Trump, which in turn means that they specifically could not have stopped Trump had they had a more reality-based view of history than the excessively rosy one they wore to their political Red Wedding.

Smith's objection to Whitman's book is in some sense a worthwhile corrective to these overblown and self-serving over-corrections, but he doesn't quite land his blow. As I read Smith, he's saying we can't let the history of southern racism's connections to Nazi Germany cloud our judgment of American history as *not* irredeemably infused with racism, because that would mean we, enlightened actors of the present, have no power to possibly change anything, and that would be bad. Kudos to Smith for fighting this fight, but he would be more effective on the battlefield if he'd sharpened his weapons of historical interpretation more assiduously prior to the battle.

Thursday, February 25, 2016

I am interviewed by the Great and Talented Rachel Cohen

Rachel Cohen, education reporter extraordinaire, interviewed me following the release of the latest Mapping Student Debt map and analysis, which show that the student debt crisis disproportionately impacts minorities, and among minorities, the middle class. Our conversation ranged well beyond that, though, encroaching on both the failure of the "skills gap" and Skills-Biased Technical Change and what I consider the root cause of rising inequality: taxes on the rich are too low, which makes running and/or owning an ultra-profitable corporation very much worth doing. When top marginal tax rates were 90%, no point in squeezing workers and customers to pad the paychecks of CEOs and the dividend streams of rentiers.

Anyway, debt-financed higher education is not the solution to individual or group inequality, and that mistaken diagnosis has caused all manner of harmful treatment effects.

Sunday, January 24, 2016

New Mystery Added to the Eleusinian Mysteries of the Education Myth

Two pieces of higher-education-policy-related analysis came out this past week and caught my attention. One, from Beth Akers at the Brookings Institution, calculates the return to completing a four-year college education, by institution and by major, using data from the administration's college scorecard supplemented with the ACS. The other, from Preston Cooper of "Economics21," castigates those politicians and academics promoting "Free College" as a higher education policy.

As I've learned since creating the first map of our Mapping Student Debt series, and also since writing a column on the Education Myth, releasing results that show increasing filtering-down in the labor market, and criticizing the Hershbein-Kearney-Summers paper on higher education attainment, there's a lot of intellectual capital wrapped up in the idea that the problem with the economy, with the labor market, and with rising inequality is that not enough people have high enough educational attainment, or to get more rhetorical, "lack the skills necessary to compete in today's economy." That intellectual capital is depreciating quickly in light of the gathering evidence that Skills Biased Technical Change isn't a serious contender for explaining rising inequality or anything else.

Since that diagnosis is mistaken, the prescription of increasing educational attainment isn't working, but it is creating its own legacy problem: a rising burden of student debt, which is either completely unsupportable thanks to lack of access to the labor market or an increasing economic burden on even those able to service their loans. That student debt crisis, in turn, has generated its own advocates for free college, debt-free college, "pay-as-you-earn," and other reforms to higher education financing. The intellectual dynamic has therefore become more complex. When I've pointed out the intellectual failure of Skills Biased Technical Change and the consequent mistake of increasing educational attainment as a labor market policy, those who advocate for economic justice for those with student loans or for future students get concerned, reasonably, that I'm blaming the victim. In fact, my view is that we need a real, rather than a fake, labor market policy in this country, and separately, we need to deal with that legacy problem of student debt and reform the higher education sector altogether. On those latter issues, I am not expert and remain uncertain what's best, though I lean toward free college from a public-option-for-everything perspective.

But I digress: back to Akers and Cooper. They both cling problematically to the Education Myth, albeit in subtly different ways (which are not all that different on close inspection). The essential idea behind both pieces is that filtering-down is not thanks to a problem in the labor market, but thanks to poor choices and/or obscured data on the higher education side. If only students made the right choice of major and chose, optimally, to remain enrolled and to graduate from a four-year institution, then they would realize the labor market outcomes of today's currently-existing four-year-college grads (needless to say, an older, better-paid, and less indebted population than current students, recent grads, and dropouts).

Starting from there, Akers and Cooper each have different theories of what's wrong. Akers argues that because there's little data following students through education and into the labor market, their successors in subsequent cohorts don't know what to do and make the wrong choices. Thus, she doesn't straightforwardly blame the victim, and more importantly (and in contrast to Cooper), she doesn't blame the higher education institutions either, or at least not all of them. In Akers' world, more or less, there remain good options for today's students, both in terms of institution and major, and she wants to help you find them. That is an admirable self-conception for a public intellectual, but unfortunately it is not based in reality--in part because she makes no attempt to correct her estimates for selection, as she admits, a problem that inherently plagues any normative inference about individual behavior from the College Scorecard data. The subtext of Akers' piece, at least as I read it, is that the Education Department could improve the situation not only by releasing more and more detailed data, but also by regulating institutions more heavily, presumably to either improve the bad institutions that are luring students into their clutches or by pushing them out of business altogether.

In Cooper, the subtext becomes text, but the proposed regulation has a more ideological, and therefore even more problematic cast. First of all, Cooper is notable among conservatives for at least recognizing that filtering-down poses a challenge to the received wisdom of Skills Biased Technical Change. Cooper favors cutting student loan funding to institutions with large numbers of dropouts, an idea he shares with Elizabeth Warren, but he also gestures towards Marco Rubio's awful Income Share Agreements, which its proponents baldly assert would induce people to choose the "right" majors and would incent institutions to lower costs. There's ample empirical evidence the latter contention is incorrect. As for the former, it's at odds with everything conservatives claim to believe about the effect of marginal taxation, since it imagines that skimming some percentage of income off the top would cause people to earn more money, not less. (For more, let me direct your attention to one of my favorite theory papers of all time, the Stiglitz sharecropping model.) Third, it's a disgusting, discriminatory idea that would either do absolutely nothing or violate the 13th Amendment.

The higher education policy more likely than ISAs to see the light of day under a Republican administration would similarly involve heavier regulation of institutions along the Akers line, but with a twist: student loan availability would become contingent on choosing the "right" major, and institutions might be penalized for even offering degrees not on the DoE's approved list. That, in turn, would effectuate at the federal level the ideological purges of higher education that are already underway in many states and departments. And it wouldn't actually solve the student loan crisis or the labor market's problems.

The issues raised by Akers and Cooper get to a larger point: that for decades, in this country, we've looked at the behaviors that distinguish rich people from poor people (get a job, get married, buy a house, save for retirement, go to college) and inferred that if poor people do more rich people things, they too would be rich. Therefore, a good policy would be for the government to create incentives to do more rich people things. First of all, that is wildly regressive in every instance because if you pay people to do things rich people do, you're overwhelmingly paying rich people. Second, estimates of how much those incentives actually change behavior usually turn out low-to-zilch. And when they are not low, that creates its own problems. We have essentially said that if you want money in today's economy, you have to do x, y, and z. When people do x, y, or z, they end up in a precarious position, as was the case with the housing crisis and underwater mortgages, and is the case with the EITC's high pass-through rate of benefits' replacing wages.

But third and most importantly, doing things that rich people do doesn't make you rich. This enormous confusion of correlation with causation and categorical refusal to do anything other than level regressions is maddening, and truly, that is what the voters should be up in arms about this election season.

Sunday, November 8, 2015

Free Market Dogmatism Still Going Strong at the University of Chicago

On Friday I attended Thomas Piketty’s two appearances at the University of Chicago, my old stomping grounds, along with my good friend (and now, my coauthor!) Bernard Weisberger. I was eager to see the commotion in person because I was curious whether there would be any discernible acknowledgement on the part of his interlocutors of the huge challenges that Capital in the 21st Century poses to their worldview and their research agendas. And there was, if only in the vehemence with which they denounced Piketty’s arguments and insisted on shifting the terms of the conversation. In my experience, you can always tell when an academic feels his expertise has been exposed to public questioning and found wanting by the frequency of absurd pronouncements stated with ever-increasing confidence as they veer further and further from reality.

What follows is my account of the first event, a discussion between Piketty and two notable economists, moderated by a third. The second event, where Piketty more or less had the floor to himself to present Capital in the 21st Century, was by far the more substantive. Interestingly, the crowd at the first was tilted toward graduate students and faculty, in which context all parties articulated long-held positions and the audience was there to express solidarity with one or the other. The crowd was more undergraduate-heavy at the second event, where Piketty’s presentation presumed a deeper engagement with the issues at hand, and where the atmosphere was much closer to the ideal of free, high-level academic inquiry on an important public matter.

Piketty’s interlocutors at the first event were Professors Kevin Murphy and Steven Durlauf, with Jim Heckman acting as moderator. (He opened proceedings by announcing, in classic Heckman self-contradictory style: “It’s a debate! It’s not a debate—it’s a discussion. It might turn into a debate.”) I admire Professor Durlauf’s original research as well as most of his informal commentary, though not his review of Capital in the 21st Century in the Journal of Political Economy. I do not admire Professor Murphy. As was evident from his comments in Friday’s session, he worships free market economics as a religion, without any sense that its truth is contingent on reality. He further thinks that his 1992 paper with Lawrence Katz, which tried to explain the dynamics of the college wage premium in the 1970s and 1980s with reference to the supply and demand for skilled labor in the form of workers with a college degree, constitutes the final word on inequality in its methodological approach, its empirical conclusions, and its policy implications. Even if you consider that paper to have been correct in all of its particulars regarding the identification and interpretation of the fact pattern it aimed at (college wage premiums declined in the 1970s and increased in the 1980s), it simply doesn’t rise to the inequality-conversation-ending status Murphy believes it to have. Its model fails at explaining the labor market outcomes that have transpired since, especially since 2000—a period in which inequality increased vastly more than it did during the time Katz and Murphy covered, while the college wage premium only changed slightly—and that only because life got worse for non-college-educated workers, hardly evidence that the dynamic new economy provides ample benefits to those with the educational credentials to take advantage of them. The paper also begs the question at a fundamental level, a point Murphy reiterated at the UChicago session, when he declared that “technology causes growth, and in response to technology, we invested in physical and human capital.” Skills-biased technical change: the Ghost in the Free Market Economics Machine.

Beyond the empirical and methodological vacuity of that paper, Murphy’s way of presenting it is offensive in the extreme—and he tacitly aimed his arrows at Piketty. Murphy began with “let’s just do a little economics,” which he distinguished from accounting by saying that economists distinguish prices from quantities in calculating expenditure shares, a subtle dig at Piketty’s World Top Incomes Database (a far more important contribution to economics than anything Murphy’s done). To Murphy, “doing economics” means moving supply and demand curves around to tell a nice little story about how The Market solves every problem as long as it’s left alone.

Getting back to the “discussion,” there was no one theme. Piketty started things off by claiming that the received wisdom (at least among economists) for why inequality has increased, globalization and skill-biased technical change, simply don’t explain the phenomena very well. Neither can explain the rise of the top 1%, nor can they explain the international variation in the extent of tail inequality. Piketty did credit the role of educational exclusion in closing off access to the most elite precincts of the economy, as shown by the new Chetty, Saez, et al findings on the extent to which top universities draw their undergraduate students from rich households. But he continued on to a discussion of how the Piketty, Saez, and Stantcheva (2014) findings on wage bargaining and top income shares can’t be squared with a marginal-productivity story of wage-setting. He mentioned norms of corporate governance shifting in favor of managers and owners (the subject of the new excellent report from J.W. Mason and the worthy fellows and fellowesses of the Roosevelt Institute) by way of explaining tail inequality, as well as erosion of unions and the minimum wage as explanations for stagnant or falling wages at the bottom and middle of the distribution. He closed with what I consider a profound restatement of why Capital in the 21st Century is such an important book:
The gap between [the] official discourse and what’s actually going on is enormous. The tendency is for the winner to justify inequality with meritocracy. It’s important to put these claims up for public discussion.

Durlauf spoke next, and at first mostly inoffensively. He shifted the terms of the debate to focus on disadvantage within the US, something he knows a great deal about but which simultaneously takes the focus off Piketty-style tail inequality or the possibility that the two might be linked. He said, quite reasonably, that the key mechanism of inequality is segregation, because it translates individual inequality into entrenched deprivation, and that its policy implications are therefore to foster integration in a variety of contexts. That is all well and good (great, even), but in a Pikettian nightmare of tail inequality and patrimonial capitalism, all that matters is whether you know billionaires and are good at kissing their asses, and one thing we know about billionaires is that the people they like best are those most like themselves. No amount of policy-fostered integration matters in comparison to the social reality of that world. We’ll all be living together—in a slum.

Murphy’s presentation was where the wheels came off, intellectually speaking. He declared “we can do a lot with a little bit of economics,” then proceeded to do nothing at all of substance by regurgitating his 1992 paper. But according to Murphy, “that theory has done an amazing job,” including a cryptic statement about how it explains the rise of tail inequality “if you extrapolate,” whatever that means. Murphy closed by declaring that providing for adequate supply of skilled workers would benefit not only those workers who gain skills, but also those who don’t, since it would scarcify their labor supply—a direct recapitulation of the Hershbein-Kearney-Summers nonsense I addressed with John Schmitt here.

In the discussion that followed, Murphy stepped forward once again to declare that the economy’s “natural supply response of supplying capital” will help workers by reducing the capital share and increasing their productivity. This is a direct restatement of John Bates Clark’s old fairy tale of the rate of return on capital equilibrating in the long run to the benefit of all, so therefore we should never be so injudicious as to get in the way of that mechanism by taxing capital or those whose savings feed into it—i.e. the rich. Murphy’s use of the words “natural” and “technology,” which passed by the panel (and, seemingly, the audience) without comment, is notable here. Also notable is the fact that Durlauf asserted in his JPE review of C21 that no one thinks like Clark anymore, with his quasi-moralistic view of the efficient functioning of capital formation and the adjustment of its rate of return. Unfortunately, Durlauf’s empirical prediction was falsified by Murphy right there on that stage.

Later, Murphy added that in the absence of better education, “The march of technology over time means there’s little for someone with no human capital to do.” Astoundingly, that flagrantly question-begging just-so story garnered a round of applause from the audience, reminding me of the debate I attended in my first year of graduate school about the founding of what was then the Milton Friedman Institute, now the Becker Friedman Institute that hosted Friday’s event. On that occasion, various campus lefties from around the university protested inconsequentially against the institute’s namesake, and the presentation by economics heavyweights Heckman and Lars Hansen garnered competitive applause from the economics partisans present—not exactly a sign of reasoned academic discourse.

Meanwhile, Durlauf raised the oft-heard point that America just has a different ideology when it comes to progressive taxation, which is why expanding education is the route forward. (Durlauf even made the bizarre and obviously factually false assertion that “America never had a Socialist Party.” Eugene V. Debs got one in twelve votes in the 1912 election, as my friend Bernie, noted historian of Progressivism, pointed out afterward.) Fact-based and historically-minded as I am, I considered Piketty’s rebuttal devastating: that progressive taxation was invented in America and that it flourished here as a complement to free and equal quality public education, not a substitute. Together, the two did not destroy capitalism. Quite the contrary: the period of their efflorescence, complete with confiscatory estate taxation, saw the highest aggregate and per-capita growth across the income distribution of any time in American history.

Then things got weird. Durlauf replied by asserting that he didn’t mean to say that Americans had never been moved to oppose inequality, but that what mattered was their perception of its source: whether justified by merit, as in the case of Bill Gates, or extracted through monopolization, as with John D. Rockefeller. At that, Piketty quipped that Bill Gates certainly agrees. But Gates is rich because he has a government-mandated monopoly to sell operating systems and business software used almost universally, while Rockefeller was rich because of his interlocking monopolies on oil, railroads, and banking, and the fortunes amassed by both men endure because of subsequent capital accumulation. One of the best parts of Capital in the 21st Century is where he asserts (and, to my mind, carries) the argument that there’s no moral hierarchy of wealth.

Following a discussion of social mobility as the empirical analog of meritocracy, in which Murphy had his one good argument of the session when he pointed out, contra Chetty and friends, that there’s no reason to believe that a meritocratic society would generate perfect intergenerational rank-rank mobility, discussion shifted to policy. Piketty took the opportunity to return to the ghost of John Bates Clark by saying that we need a Plan B in case the “natural” capital supply response isn’t forthcoming or that it works against rather than in favor of workers—namely progressive taxation of wealth. “Otherwise, it’s a bit magical.” That set Murphy off. He interjected that he never meant to say problems of inequality would solve themselves. But, on the other hand, progressive taxation is the worst thing you could do—shut down that supply response by destroying the incentive to save to form physical capital or to get educated to form human capital. Referring to some version of Mitt Romney’s old friends, the Makers and the Takers, Murphy quipped “we have to keep people engaged”—presumably meaning that without the goad of vast inequality to spur them to action, the left-behind might just drift out of the economy altogether. That roused his followers in the audience once again. Continuing on his lifelong quest to preach the gospel of the First Welfare Theorem to the expectant congregation gathered at the camp revival, Murphy continued [referring to the poor and marginalized] “People aren’t perfect. They don’t all look out for their own interest but most do.”

The intellectual and doctrinal muddle is almost too tangled to tease out here, but the idea seems to be that the poor, benighted though they are, will adopt the morally correct position of looking out for their own interest by acquiring an education, so long as the incentive to do so is preserved by avoiding progressive taxation. Usually the fallacy in the moral philosophy of economics, for those who partake in such things, is to argue that whatever reality exists is for the best, a classic Panglossian is/ought conflation. In this case, though, the “ought” is a priori: people should be selfish. For that reason, they probably will be, so long as the status quo is maintained as an instructive lesson in the disaster befalling anyone not born rich. At least Murphy disagrees with the late Franklin Giddings, the Columbia professor who said in 1893 that following 20 years of populist agitation, American farmers hadn’t managed to improve their economic position and therefore must have only themselves to blame. Murphy, on the other hand, holds out hope of future bootstrap-pulling-up behavior so long as we avoid the pitfall of directly addressing inequality as we find it. Piketty himself said it best: “The idea that we need to keep inequality to preserve incentives is just not consistent with reality.”

Durlauf made a final, inscrutable point in this debate by saying that we should directly address the harms caused by inequality, by which he was referring to capture of the political system by the wealthy—as opposed to dealing with inequality itself, through progressive taxation, presumably. He asserted that the former approach is what motivated Progressive-era reformers, a remark that elicited an audible scoff from Bernie.

That ends my account of the first session of the day—disappointing in the extreme, an opportunity to relive the worst aspects of my experience in graduate school. [Thankfully, a tiny minority of my time was spent listening to Kevin Murphy lecture, but I honestly was scarred by and still resent the nights I spent working very late to gin up the answers he wanted for his flagrantly ideological problem sets.] The saving grace of Friday’s event was of course Bernie’s company—to which I fled more than once in intellectual desperation during my PhD.

In Durlauf’s JPE review, he mentions that Charles Murray (and specifically his book The Bell Curve) has no influence in academia, even though it retains a totally undeserved hold on public debate. Durlauf is implying that Capital in the 21st Century merits the same fate, which is a totally ridiculous and offensive comparison. In any case, Murray came to UChicago on his book tour for Coming Apart, and that event garnered no attention whatsoever from the economics establishment (except for me—I wrote it up at the time on my Facebook wall, an account which can be read here.) Indeed, one of the aspects of Washington economics discourse that has surprised me the most is the relatively high stature accorded to Murray, Brad Wilcox, and their “pro-family” nonsense by elites here (notwithstanding the yeoman’s work of the great, and tireless, Phil Cohen, showing what charlatans they are.) The right wing of academic economics doesn’t give Murray and Wilcox the time of day, but apparently it worships the ground Kevin Murphy walks on, despite the fact that Murphy has no greater claim on our attention than Murray. They are both fact-free ideological axe-grinders whispering comforting, apparently-superficially-plausible nonsense to the powerful.