Sunday, November 11, 2007
Cowan Takes Down Stiglitz
Tyler Cowan critiques a recent essay by Joesph Stiglitz for apparent political bias. When I used to follow this stuff, I thought Stiglitz was a very politically biased economist, who I supposed deserved the Nobel Prize, but who, in my experience, let his politics run his economic reasoning.
While Stiglitz has made some important contributions, I believe he has ignored the limitations on their use. While I was in law school, I heard Stiglitz give a paper on how some tax, applied in exactly the right way, could correct some market imperfection. Afterward, I asked him whether he had confidence that the government would apply that tax correctly. Didn't public choice theory suggest the tax was unlikely to be applied right? Stiglitz was unmoved. He couldn't see why the government wouldn't do its job correctly.
When I was at a Law & Econ conference years ago (Prof. Rappaport may have been there too) Stiglitz was the keynote speaker. He spoke about some tort liability topic, I forget exactly what. But the audience was a who's who of firepower on the law and economics of tort law. He received three quite penetrating and rather critical (but polite) questions in a row, and that was enough for him. He abruptly terminated the Q&A and walked off the stage. It was one of the more arrogant displays I have ever seen. The idea seemed to be that if you dared to be critical of him, he would not speak to you.
Posted by: Tom Smith | Nov 11, 2007 9:11:52 AM
When you are discussing Leading American Economists, gentlemen, could you perhaps give me a reminder of which is which? For instance, after each name you might append (used to work for Enron), or (stole from Russia) or (big spoiled baby), as the case may be.
Posted by: dearieme | Nov 11, 2007 10:11:48 AM
That says it all.
It is not so much that the public's choices are correct, but that we build success through the attrition of failure. There is no such device in government. In fact, the programs failing worst will attract the most money.
Posted by: James wilson | Nov 11, 2007 8:55:07 AM