Who is Noah Smith kidding?
Students’ dissatisfaction is mostly about politics — they perceive mainstream economics as thinly disguised shilling for unrestrained free-market capitalism (also called “neoliberalism”). But that criticism is extremely out of date. Any Econ 101 course not taught by a total ideologue will contain plenty of theories that support the need for government intervention. Mankiw’s book certainly does. These include externalities, asymmetric information, strategic behavior (game theory), welfare economics, monetarist and Keynesian macroeconomics, and more. I could teach you an Econ 101 course straight out of Mankiw that did nothing but give reasons for more government. The fact is, if your Econ 101 course is a front for neoliberal propaganda, it’s only because your professor wanted it to be.
Should I first point out that “government intervention” is not the difference between right wing and left/liberal views? Hayek supported the army and secret police mass murdering union organizers in Chile - that’s a serious government intervention. At least to me. And Mankiw’s right wing politics permeate his book, whether or not Smith is willing or able to notice. On page 10 students are told that taxes “adversely affect the allocation of resources for they distort prices and thus the decisions of households and firms.” Nothing political or ideological in that, just fact, proven by empirical research. Uh huh. On page 13, students are told “the growth rate of a nations productivity determines the growth rate of its average income.” Even mainstream economists like Larry Summers have known that to be false for DECADES. On the same page, “when a government creates large quantities of a countries money„ the value of the money falls.” This is what every right wing hack in the world says - announced here as a fact. On page 30, students get a lesson in the difference between positive (fact based, scientific) assertions and “normative” (emotional, magical thinking ) assertions. The example, is Polly scientifically explaining that minimum wage laws cause unemployment and that hippie Norm demanding that government raise the minimum wage. Subtle! And on page 36, students are invited to wag their heads wisely, but sadly, as Greg wonders why cities have rent control laws despite economists factual explanation that these things make matters worse. And at that point, I give up.
Right wing politics disguised as “science”. This stuff is junk and only those whose paychecks depend on it argue otherwise.