How Rough Do Dissenters From "Free Market Economics" Have It Anyway?

Josh Wright —  12 July 2007

There are some good posts from several fine economists in the blogosphere responding to this NY Times article suggesting that the majority of economists are “free market” ideologues and those who dissent from laissez-faire dogma are sanctioned by their peers. All are excellent posts worth reading in their entirety and take on various problems with the NY Times caricature of the economics profession. Here are a few highlights followed by some of my own thoughts about the “dissenters” in the fields I am most familiar with: antitrust economics and law & economics.

Greg Mankiw at Mankiw’s Blog:

Many economists in the past have questioned “free-market orthodoxy”–for example, Samuelson, Tobin, Modigliani, Solow, Sen, Stiglitz, Akerlof, Phelps,…. Does the economics profession consider these guys “deluded or crazy?” No, we give them Nobel Prizes! Maybe it’s because I have spent my education and career at Princeton, MIT, and Harvard, rather than Chicago, but I have never viewed the economics profession as being dominated by free-market orthodoxy.

Don Boudreaux at Cafe Hayek:

I would say that I have no “faith” in free trade; rather, the evidence and the theory of free trade are powerful enough to convince me that it is practically superior to any form of protectionism if the goal is widespread prosperity. Faith is required when neither evidence nor theory support whatever proposition you choose to (or happen to) believe. Even if Rodrik is correct about the errors and oversights of traditional trade theory and evidence, it is an unjustified smear to say that those who accept these as the basis for supporting a policy of free trade do so as a matter of “faith.”

Boudreaux goes on to ask whether any of the economists who believe that protectionism leads to economic prosperity would also support intra-national protectionism.

Alex Tabarrok at Marginal Revolution points out that survey evidence suggests that “only a small percentage of AEA members ought to be called supporters of free-market principles” and opens his post with the following observations:

It beggars belief when economists at Princeton, Harvard and Berkeley claim that they are lone voices in the wilderness boldly striking heterodox positions against the hegemony of “free market economics.”

David Card, for example, says “You lose your ticket as a certified economist if you don’t say any kind of price regulation is bad and free trade is good.” Really? Card and Krueger’s famous paper on the minimum wage was a 1993 NBER working paper published in the AER in 1994. What happened then in 1995? Was Card decertified, drummed out of the profession, vilified by his peers? Hardly, in 1995 David Card was honored (deservedly imho) by the American Economic Association with the John Bates Clark medal.

I find these observations consistent with my experience in the antitrust branch of industrial organization economics where top journal publications are in large part reserved for theoretical models demonstrating the possibility that some conduct might be inefficient or result in market failure under some set of (usually fairly stylized) conditions. As a colleague of mine once warned: “nobody gets tenure for demonstrating that markets really work.” At the end of the day, I highly doubt that any “interventionist leaning” antitrust economists are looking over their shoulder in fear of the AEA taking back their membership.

While I am not prepared to back the statement with evidence, casual empiricism suggests to me that free market economic principles do not dominate the “law and economics” world either. A look at the ALEA program for the last 5 or so years would probably confirm this suspicion. For example, I don’t believe any law school L&E types would be willing to support the position that those relying on behavioral L&E insights to argue in favor of various intervention proposals have suffered on the job market, in law reviews or peer-reviewed journals, or amongst their peers in recent years. Perhaps I’m wrong about this. If you think I’ve underestimated the plight of the dissenters in the L&E world in particular, I’d love to hear about it in the comments.

4 responses to How Rough Do Dissenters From "Free Market Economics" Have It Anyway?

  1. 

    The Free Market is always superior to top down government and political actions.

    We are very pleased to announce the creation of The Free Market Hall of Fame where members of the Freedom Movement will have the opportunity to initially vote on individuals contributing most to the success and advancement of free markets and free people around the globe during 2007.

    Nominations for the Free-Market Hall of Fame are open to the public and can be made by anyone by e-mailing ron@freedomfest.com Individuals can vote for or nominate individuals who they believe should be in the Free Market Hall of Fame. Write-ins are permitted.

    The categories will include the following:

    1. Academic economists
    2. Journalists and writers
    3. Business leaders
    4. Legislators and government officials
    5. Think tanks

    A select group of economists and other free-market supporters will make the final decision and vote on upcoming Hall of Fame members.

    For more information on the Free Market Hall of Fame go to http://www.freedomfest.com/hofhome.htm

    “It’s time we honored all the great teachers, writers, business leaders, legislators, and think tanks that have advanced the cause of liberty,” Mark Skousen

    Ron Holland, Editor
    FreedomFest News http://www.freedomfest.com/news.htm
    Author of the online book: “The Swiss Preserve Solution”.

  2. 

    When I read this, it struck me that the theories relating economic freedom to enhanced social welfare predate the theory of evolution by over 50 years, have tons more evidence to support them (far more than a relatively thin and ancient fossil record), and yet invite far more critique from academics.

    I wonder why that is? I’m sure it has something to do with a conflation of economics as a descriptive discipline (i.e., finding links of cause and effect) and a prescriptive force (i.e., justification for government policies, necessarily affecting competing interests). Few people are into the incremental truth-seeking of science, especially the uncertain social sciences. Everybody, to quote Tears for Fears, wants to rule the world.

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