Thursday, 13 December 2007

How do the right and left differ?

On his blog Greg Mankiw tells us that he asks this question in his first year economics class. A summary of his reasons for the fact that right-leaning and left-leaning economists differ in their policy views, even though they share an intellectual framework for analysis, is given below:
1) The right sees large deadweight losses associated with taxation and, therefore, is worried about the growth of government as a share in the economy. The left sees smaller elasticities of supply and demand and, therefore, is less worried about the distortionary effect of taxes.

2) The right sees externalities as an occasional market failure that calls for government intervention, but sees this as relatively rare exception to the general rule that markets lead to efficient allocations. The left sees externalities as more pervasive.

3) The right sees competition as a pervasive feature of the economy and market power as typically limited both in magnitude and duration. The left sees large corporations with substantial degrees of monopoly power that need to be checked by active antitrust policy.

4) The right sees people as largely rational, doing the best the can given the constraints they face. The left sees people making systematic errors and believe that it is the government role’s to protect people from their own mistakes.

5) The right sees government as a terribly inefficient mechanism for allocating resources, subject to special-interest politics at best and rampant corruption at worst. The left sees government as the main institution that can counterbalance the effects of the all-too-powerful marketplace.

6) There is one last issue that divides the right and the left—perhaps the most important one. That concerns the issue of income distribution. Is the market-based distribution of income fair or unfair, and if unfair, what should the government do about it?

1 comment:

Anonymous said...

Me and a co-author have recently completed a paper on the analysis of

economists’ disagreement and of its determinants.

As a case study we took the Italian profession and we measured Italian economists' disagreement about : 1) the cause of the difficulties of the Italian economy; 2) which are the most effective policy proposals to solve the

economy's problems.

Then we relate the respondent's opinion on each specific policy proposal to her individual characteristics, academic profile, methodological approach and political opinions.

We find that the political view of the respondent matters a lot in explaining difference in the judgement of a policy proposal but which aspect of her political view matters most depends on how much controversial the policy proposal is.

We have also prepared a website for additional documentation on the survey - the questionnaire, other descriptive statistics, etc.. The link is:

No need to say, whatever comments or suggestion is more than welcome.