Does Cochrane Really Understand the Latest on Minimum Wages?

John Cochrane thinks we liberals who think higher minimum wages can do some good by offsetting monopsony power fail to grasp labor economics. He is citing some work by Jeffrey Clemens, Lisa B. Kahn, and Jonathan Meer. Alas his blog post screwed up the link to this interesting paper:

Compensation consists of a combination of cash and non-cash attributes, and depends on worker productivity. We also allow for the possibility of a bargaining wedge whereby the firm pays less in total compensation (cash and non-cash benefits) than a worker’s marginal product. When the minimum wage rises above the prevailing wage (cash payment) but below a worker’s marginal product, the firm will shift the mix of compensation towards cash and away from non-cash benefits, but will still find it worthwhile to employ the worker. This distortion can create losses to worker welfare which, if large enough, will push workers to prefer their outside option of nonwork. We also show that, in the presence of a bargaining wedge, the welfare effects of minimum wage increases are non-monotonic. In general, wage gains associated with increases in worker bargaining power will tend to improve welfare, while wage gains that are accommodated through reductions in non-cash benefits can reduce welfare.

In many ways, this dates to a 1980 paper by Walter Wessels (“The effect of minimum wages in the presence of fringe benefits: An expanded model,” Economic Inquiry), which the authors cite. Wessels assumed a perfectly competitive model where government interference lowered worker total compensation. Wessels published later papers, which alas the authors did not cite. In 1994, the Journal of Labor Research presented an extension of Wessels thinking that incorporated monopsony power entitled “Minimum wages and the wessels effect in a monopsony model” by J. Harold McClure:

The Wessels model suggests that firms respond to increases in the minimum wage rate by decreasing the level of fringe benefits — an action which produces an inefficiency effect that lowers workers’ utility and the supply of labor. Standard models of monopsony, however, argue that wage floors prevent the exercise of market power and increase employment. I show that wage floors, even with fringe benefit curtailment, may increase employment by lowering the marginal expense of labor. Employee utility and employment will rise somewhat but not as much had the firm acted competitively in setting both wages and fringes.

The “worker bargaining power” bit may be alluding to this monopsony power argument even if the authors did not cite this 1994 paper. The authors did note:

When we compare wage changes to changes in employer coverage, we find that coverage declines offset a modest fraction of wage gains for very low wage workers and a larger fraction for moderately higher wage workers. In very low paying occupations, the coverage decline offsets an average of roughly 10% of the rise in the wage bill. We cannot reliably measure changes in employer contributions on the intensive margin, which may also decrease in response to increases in the minimum wage. Therefore, the 10% average offset is composed of some workers who lose coverage entirely and some workers who maintain coverage and receive wage gains. We find offsets of 25% and 60% for workers in the next lowest paying occupation groups, respectively.

If I’m reading this correctly, total compensation rises even if fringe benefits decline – which is more consistent with the monopsony version of the Wessel model than the perfectly competitive version. Of course this is not the message that Cochrane has conveyed to the readers of his blog.

Trump Has Birth Nations Skipping Generations

Starting around 2011 or so, Donald Trump began to get a lot of attention on the looney racist right in the US by becoming one of the leading advocates of birtherism, the claim that Barack Obama was born in Kenya rather than Hawaii.  Of course, Obamam's father was born in Kenya.

Now, curiously, Trump is at it again, although now involving his own family.  He has taken to claiming that his father was born in Germany.  His father's father was born there apparently, with the name "Drumpf."  But by all accounts I know of, Trump's own father was born in The Bronx in New York City.  It seems he is playing a reverse form of birtherism here, although it may be an effort to assert a stronger connection to the erstwhile "Master Race" of the Nazi movement.

Of course, it may also be that this is simply part of a more general mental breakdown, given the rather large number of either blazingly false or just blazingly stupid things he has been coming out with in the last several weeks.

Barkley Rosser

Unreading Marcuse's "Repressive Tolerance"

William S. Lind's cultural Marxism conspiracy theory boils down to the claim that in his essay, "Repressive Tolerance," Herbert Marcuse "called for tolerance for all ideas and viewpoints coming from the left and intolerance of all ideas and viewpoints coming from the right" and that college administrators and professors have put Marcuse's proposal into practice in the form of "Political Correctness."

Marcuse did indeed make a statement that seemed to propose exactly that: "Liberating tolerance, then, would mean intolerance against movements from the Right, and toleration of movements from the Left." The problem with taking the proposition literally, however, is that on the very first page of his essay, Marcuse had already dismissed it with the awareness that,"no power, no authority, no government exists which would translate liberating tolerance into practice." The proposition, he added, was intended "to open the mental space in which this society can be recognized as what it is and does."

Approximately 6,000 words of dense verbiage intervene between Marcuse's discounting of the proposition and his restating it in stark, attention-getting terms. The casual reader could be forgiven for having forgotten the initial disclaimer along the way. What is implausible, though, is that college administrators and professors would have collectively adopted the formula as gospel while expressly ignoring the caveats. In fact, in a 1968 postscript to his 1965 essay, Marcuse indicated that his proposition had encountered "virulent denunciations" which he attempted to counter with a restatement of its rationale and acknowledgement that the practice he called liberating tolerance "already presupposes the radical goal which it seeks to achieve."

Marcuse's postscript apologia is hardly more convincing than his original essay. The problem, in my view, is that Marcuse attempted to illustrate a terminological paradox with a "counter-paradox." His diagnosis -- that "tolerance" in an administrated state rife with propaganda is not all it is cracked up to be -- was apt. But he clumsily succumbed to the temptation to offer a prescription. And since he realized that there is no pat solution, he offered a pseudo-cure instead, in the form of a facile "thought experiment."

It may well be that the crude, simplistic slogan of "intolerance against movements from the Right, and toleration of movements from the Left" would have appealed to student radicals in the 1960s, in which case, Marcuse's popularity would have been due more to incomprehension than to affirmation. But among his peers, even in the Frankfurt School, there was no such luck. Correspondence between Marcuse and Theodor Adorno from 1969 show Marcuse's defensiveness in response to Adorno's tense disapproval of his "undialectical" activist sympathies:

You know me well enough to know that I reject the unmediated translation of theory into praxis just as emphatically as you do. But...

Like you, I believe it is irresponsible to sit at one’s writing desk advocating activities to people who are fully prepared to let their heads be bashed in for the cause. But...

Meanwhile, Max Horkheimer "too has joined the chorus of my attackers" while Habermas was publicly warning against "left fascism." By the early 1970s, Marcuse's brief moment of notoriety was rapidly fading.

Marcuse's paradoxical fable of "liberating tolerance" (and intolerance) was not even the most pernicious part of his "Repressive Tolerance" essay. The same social conditions that make "tolerance" abstract and spurious, Marcuse argued, also "render the critique of such tolerance abstract and academic, and the proposition that the balance between tolerance toward the Right and toward the Left would have to be radically redressed in order to restore the liberating function of tolerance becomes only an unrealistic speculation." So, there you have it, folks! Herbie has been giving you the jive and now he's telling you it's all jive. What, oh what... is to be done?

Indeed, such a redressing seems to be tantamount to the establishment of a "right of resistance" to the point of subversion. There is not, there cannot be any such right for any group or individual against a constitutional government sustained by a majority of the population. But I believe that there is a "natural right" of resistance for oppressed and overpowered minorities to use extralegal means if the legal ones have proved to be inadequate.

Andreas Baader invoked this "natural right of resistance" at his 1968 trial for arson, with the outcome that he was sentenced to three years imprisonment for political vandalism that caused no injuries and relatively modest property damage. So much for Marcuse's objection to sitting "at one’s writing desk advocating activities to people who are fully prepared to let their heads be bashed in for the cause."

Closely reading Marcuse's "Repressive Tolerance" essay gives me a new insight into what Lind is doing with his cultural Marxism hoax. Lind has appropriated Marcuse's theme of there being a regime of repressive tolerance but has inverted its origin and attributed it to Marcuse's "liberating tolerance." Marcuse's "mental space," "unrealistic speculation" or petitio principii that "already presupposes the radical goal which it seeks to achieve" is recycled by Lind as the actual persecution endured by conservative students under the imagined regime of "cultural Marxism."

Copycat Crime and the Conscience of a "Cultural Conservative" part two

...it would be absurd to subscribe to the author the unintended consequences of an author's statements without considering the circumstances which surround them. It is, however, equally absurd to pretend that the ideological history of a work's consequences are entirely extrinsic. -- Jürgen Habermas

With all its limitations and distortions, democratic tolerance is under all circumstances more humane than an institutionalized intolerance which sacrifices the rights and liberties of the living generations for the sake of future generations. -- Herbert Marcuse

As we saw from his March 17 webcast, William Lind was not inclined to consider taking any responsibility whatsoever for the (presumably) unintended consequences of his rhetoric. This is not to say, however, that he isn't eager to take credit for political influence his ideas may on powerful state actors.

In his March 24 webcast, Lind revealed the "scoop" that his initiative may have inspired President Trump's executive order to protect conservative speech on university campuses. "We have," Lind boasted, "what I think is the inside story on one of last week's news events -- mainly the President Trump's announcement that 35 billion dollars worth of federal funding for higher education is going to be tied to freedom of thought and expression on college and university campuses." According to Lind, what happened is that, as a board member of a conservative group of Dartmouth University alumni, he wrote a memo -- subsequently forwarded to the White House by a well connected board member -- that recommended substantially the steps taken by Trump in his executive order.

This, by the way, is a basic rule of politics. If you're going bottom-up you come in as a supplicant. You're either ignored or kicked in the teeth. The way you get something to happen politically is to come in top-down. You come on… you come down on the center you're targeting from a higher political level. Well there's no higher level obviously than the White House.

Lind made it plain throughout his eleven minute discourse that the "freedom of thought" he is seeking to protect is specifically conservative thought ("we all know very well what happens to conservatives on campus -- how often they are persecuted.") As Lind read from his memo:

The problem of discrimination against conservative faculty, students and outside speakers by colleges and universities is not restricted to Dartmouth. It has become general throughout academia. The same college administrators and faculty members who demand diversity in all things also require uniformity in the one area most important to any academic institution – thought. And the ideas that contradict political correctness -- including arguments for free markets, traditional morals and Western Judaeo-Christian culture -- are subject to censorship. Faculty, students and speakers who express conservative views find their careers threatened, face college discipline or are simply shouted down with no penalties imposed on those who threaten violence.

The origin of these practices is Herbert Marcuse's essay on liberating tolerance, which called for tolerance for all ideas and viewpoints coming from the left and intolerance of all ideas and viewpoints coming from the right. This is what college administrators and professors now mean when they call for tolerance. 

Lind took the timing of Trump's announcement -- just a couple of weeks after Lind sent his memo -- and the specific inclusion of targeting research funding to indicate strong circumstantial evidence that his memo was pivotal. "So I think there's a pretty good chance circumstantially that it was our initiative that brought this about and if so again we have watched the mother of all Zeppelin strikes on the cultural Marxists." Here he repeated the image he had introduced earlier in his account: "So what President Trump did this week there is a large Zeppelin raid directly on the enemy's base and that's significant."

Lind continued on for three minutes on implementation of the policies announced by Trump before returning yet again to the trope of aerial bombardment:

The deep state obviously is going to hate all this because it's populated by cultural Marxists, including in the trump administration, and they're going to do their best to sabotage this with the old bureaucratic rule: delay is the the surest form of denial. They will be hoping to make sure nothing happens and nothing changes at least 'til the end of President Trump's first term. So we're gonna have to watch this carefully. If it… if it is implemented and implemented forcefully as it needs to be. 

Lind and his co-hosts concluded their discussion of this conservative free thought initiative with a "jocular" exchange on bombing universities:

Brent: Well there you have it. if you want the cutting edge in conservative activism -- right-wing activism -- look no further than TR. 

William Lind: Absolutely. And if this doesn't work, we're gonna tell Jeff to get back in his Cobra and launch an airstrike.  

Jeff Groom: That would actually work because the Cobra uses a Hellfire, which, as you know, Bill, attacks from the top down on things. It doesn't fly in armour, but flies in top down where armour's thinnest.  

William Lind: And I can't think of anything that colleges and universities more deserve than Hellfire.  

Jeff Groom: Yeah we're gonna get the November variant so just it's a thermobaric one not the tank killer we need the thermobaric one -- burn everything out… 

Thermobaric weapons are one of the class of fuel-air explosives (FAEs). According to Human Rights Watch: 

FAEs are more powerful than conventional high-explosive munitions of comparable size, are more likely to kill and injure people in bunkers, shelters, and caves, and kill and injure in a particularly brutal manner over a wide area. In urban settings it is very difficult to limit the effect of this weapon to combatants, and the nature of FAE explosions makes it virtually impossible for civilians to take shelter from their destructive effect.

Remember though, folks, the real victims here are the conservatives being persecuted for compulsively joking about incinerating their political, ethnic and religious enemies.

In part four of this series, I read Herbert Marcuse's "Repressive Tolerance" so you don't have to.

Copycat Crime and the Conscience of a "Cultural Conservative" part one

On March 15 a gunman opened fire on worshipers in two Christchurch mosques, killing 50 and wounding around the same number. Survivors of gunshot wounds often have traumatic injuries that require multiple surgeries and leave them severely disabled for life. Before embarking on his rampage, the alleged gunman broadcast over the internet a "manifesto" outlining the motive for his deed.

In his manifesto, the alleged perpetrator claimed to have had "brief contact" with "Knight Justiciar" Anders Breivik, the convicted Norwegian mass murderer, and to have taken "true inspiration" from Breivik's "2083" manifesto. Indeed, the Christchurch massacre would fit the definition of a copycat crime in terms of motive, manifesto and mass murder.

As mentioned in the previous post, Breivik plagiarized approximately 15,000 words of his manifesto from a pamphlet on "Political Correctness" by William S. Lind. The alleged Christchurch killer plagiarized his deed from Breivik. On his March 17 traditionalRIGHT webcast, Lind spent a little over 16 minutes talking about the Christchurch rampage. Not surprisingly, neither he nor his interlocutors mentioned the Oslo precedent. John Lind referred explicitly to content of the alleged Christchurch shooter's manifesto. Is it conceivable that Lind is unaware of the widely-disseminated, extensive plagiarism of his work seven and a half years ago by a mass murderer? That's a bit of a stretch.

So what did William Lind talk about when he talked about the Christchurch terror attack? To what extent, if at all, does Lind take moral responsibility for the consequences -- even those unintended -- of his words?

Lind's first observation was to caution that there was much that remained unknown about the attack. He then criticized "the establishment media rushing to judgment" by reporting that it was a right-wing hate crime. Then he launched into speculation -- "I only say possible no idea at this point" -- that the alleged attacker had been converted to Sunni Islam during his travels in Pakistan and that the attack on the mosques was "actually part of the Sunni-Shiite war" and that "it would make sense in many ways for him to try to blame this on the right because of course who's leading the opposition to Islam in the Western countries?"

It also could be somebody sitting on their bed that weighs 400 pounds, OK?

The "second thing that immediately jumped out" at Lind was "why in the Hell are there mosques in New Zealand to begin with?" This remark evoked appreciative laughter from his co-hosts, Brent and John. The real problem was allowing Muslims to come to Western countries, or, if they are allowed to come, allowing them to build mosques. Lind then expounded for three minutes on the unrelenting persecution of Christians in Islamic countries and the disregard of the establishment media toward "church bombings and mass murders -- those get a paragraph or two in the same papers that splash this [Christchurch] across the headlines on the front page with the biggest type." According to Lind, these atrocity are "happening all the time in Africa":

We have had Christians worshiping on a Sunday morning suddenly the doors of their church are barred and it's set on fire by Muslims. These don't even make the New York Times. Remember the Times's real slogan is "all the news that fits we print." So this [Christchurch shootings] fit their narrative of evil Christianity -- evil white males, evil right-wing etc. The mass murder of Christians by Islamics doesn't fit the narrative so, okay, doesn't exist and this by the way is exactly what the President and his supporters means by fake news.

After discounting media coverage of the Christchurch attack, conjecturing about an alternative scenario and objecting to Muslim presence in Western countries and lack of media coverage of atrocities committed against Christians, Lind turned his attention to the strategic disaster of the attack. For this analysis, he assumed the "current narrative" of a right-wing, anti-Islamic attack. From that perspective, Lind expressed sympathy for the killer's alleged motivation, "from what we're being told now were inspired by this guy's reaction to seeing Islamics all over France -- well, that's an understandable reaction [laughter]." Nevertheless, Lind was eager to advise "our colleagues on the right [that] it's important to understand why actions like this actually work against us."

Lind's analysis of the strategic inaptness of this particular kind of "leaderless resistance" action relies on his theory of "fourth generation warfare" and with the "cult of the victim" that he attributes to Antonio Gramsci and Georg Lukacs, "what we know as cultural Marxism or political correctness."

All Marxism is loser worship. It's if you're successful, if you're a builder, if you're a producer, if you're out there doing great things, you're evil, you're a capitalist, you're a member of the bourgeoisie, you're an exploiter, you're a landlord etc., you deserve a firing squad or the gulag. If you're a complete loser who produces nothing you know you're only a taker, you're, you're always defeated, then you're a moral hero and in the climate that we now live in where cultural Marxism sets the tone throughout much of the world the highest status you can achieve is victim.

Why "loser worship" makes this kind of "leaderless resistance" violence strategically disastrous for the right is left unspoken by Lind. My interpretation of what Lind is getting at here but not clearly stating is that the attacks will evoke sympathy for the victims and thus elevate their status. But the real victims here, according to Lind and his colleagues, are the young, white heterosexual Christian men driven to violence by the pervasive cultural Marxist oppression:

...so many lost young men that feel like they have no future we're not allowed to have our own spaces anymore as like white Christian European people without having to have without foreigners coming in here...  \ 

...we can't speak out against any of this without censorship or losing your job or something and it's driving people mad...  

...this feeling of oppression where you can't say what you think about anything because because certain viewpoints have effectively been outlawed...

...more and more men young men particularly -- and this by the way, Brent, is happening in many parts of the world -- are finding themselves with no prospects if in this country they're white Christian men, heterosexual. They are considered somehow evil. Again they're the old equivalent of the capitalists and landlords under the old economic Marxism. They're inherently evil and they can't do anything without women but they can't do anything with women because if they displeased a woman she could immediately claim sexual harassment and he's guilty until proven innocent and the rage is just building and building and building and because of the way the internet fosters leaderless resistance I'm afraid you're right, Brent, we are going to see more of this but on our side we need to understand it is strategically disastrous.

Does your head hurt trying to follow Lind's logic? That is the point. It is not logic but a propaganda technique that relies on the listener/reader's conditioning to assume that what they are hearing/reading and trying to follow is a logical argument. Jacques Ellul gave a concise description of the technique Lind employs:

Propaganda by its very nature is an enterprise for perverting the significance of events and of insinuating false intentions. There are two salient aspects of this fact. First of all, the propagandist must insist on the purity of his own intentions and at the same time, hurl accusations at his enemy. But the accusation is never made haphazardly or groundlessly.* The propagandist will not accuse the enemy of just any misdeed, he will accuse him of the very intention that he himself has and of trying to commit the very crime that he himself is about to commit. He who wants to provoke a war not only proclaims his own peaceful intentions but also accuses the other party of provocation. He who uses concentration camps accuses his neighbor of doing so. He who intends to establish a dictatorship always insists that his adversaries are bent on dictatorship. The accusation aimed at the other's intention clearly reveals the intention of the accuser.

*Because political problems are difficult and often confusing, and their import not obvious. the propagandist can easily present them in moral language -- and here we leave the realm of fact, to enter that of passion. Facts, then, come to be discussed in the language of indignation, a tone which is always the mark of propaganda. 

Lind's cult of the victim enlists young, white, heterosexual Christian men driven mad by having their future -- their rightful prospects as successful builders, producers, capitalists, landlords and doers of great things -- stolen from them by losers. They just can't catch a break! Even when they go out a shoot a bunch of those losers, it is the losers who get elevated as high-status victims in today's cultural Marxist climate instead of the real victims, those meritorious young, white, heterosexual Christian, deservedly-successful but dispossessed males. Ressentiment is a bitch.

To be continued...

Thinking About Generations

Three weeks ago my wife and our daughter and I were in Moscow to celebrate her mother's 90th birthday (which was on March 10).  Somehow when I woke up today it occurred to me that a man born on the same day could have joined the Soviet army and participated in the final push into Berlin for the defeat of Hitler.  Likewise in the US a man born on the day could probably have gotten into the US military and participated in the final actions in Europe or the Pacific of the war. But probably few born much after then could have had that experience. So, whatever the sociologists or demographers say, this was the tail end of the "Greatest Generation," with Americans born then having some experience as young people of the tail end of the Great Depression as well as of WW II, the signature events of that generation.

Next came the Silent Generation, whose front end includes the veterans of the Korean War, now in their mid-80s, more or less.  In contrast with the Greatest and their unabashed victory, the Korean War was ulitmately a stalemate, and its veterans have long complained with some reason of not getting much attention, even as as many died during it roughly as the later and longer Vietnam War. But then maybe that is because the Silents just did not make enough noise.

Which brings us to the Boomers, who got Vietnam, at least the front end of the generation.  And this one was a loss after it became very unpopular and tore the nation apart.  For the record, I got out of it through having a high draft number, 346, not through  having my father pay a doctor to make up phony bone spurs for me as someone else did, someone who had the nerve to say he did not respect John McCain for getting captured during the war.

The later stage Boomers would get to see the US win the Cold war, even as the president was a Greatest Generation guy when that went down.

Gen-X got the unfortunate Iraq War, with it being instigated by a Boomer president.  And now the Millennials have all sort of fun and games happening with another Boomer president in place, Mr. Bone Spurs.  ISIS may have just been defeated on the ground, but the situation in Afghanistan looks set to get bad, not a victory.

I am not sure there is a bottom line to this post.  It was triggered by thinking about my mother-in-law and how much people in the USSR suffered during the Great Patriotic War as they call it and how the Greatest Generation is now all in their 90s or above, what is left of them.  Somehow that was the last unadulterated victory the US had in a war, with the rest since either stalemates or outright defeats.

Regarding that generation in Russia, I note that in the past one would see the men of that generation, the veterans of that war, walking proudly in the streets with their medals on, with people treating them with great respect, both in the Soviet period and afterwards as well.  The women would become the babushkas who would order younger people on the streets around for whatever they thought the younger people should be doing or not doing.  But now what is left of that generation is not on the  streets any more.  I did not see a single one of those vets with his medals this  visit, although I know many are still alive, and no babushkas were ordering young people around on the streets, for better or worse.

Barkley Rosser

Nazi executioner judge: "Political correctness is worse than Nazi tyranny."

The terrorist mass murder in Christchurch, New Zealand two weeks ago has sent me back to my archives to retrieve my documentation of Anders Breivik's extensive plagiarism of the writings of William S. Lind, et al.

Did I say "extensive" plagiarism? Breivik copied and pasted the whole 19,000 word pamphlet, making minor revisions here and there and deleting around 4,000 words that dealt with more arcane academic topics, such as Derridean deconstruction. Below is an example of the markup comparison of documents from Lind's to Breivik's, with insertions in blue and deletions in red:

At the end of Lind's tract, he included a bibliographical essay "...as a guide for interested citizsens who want to learn more about the ideology that is taking over Western Europe and America." One of the entries in that bibliography was The Frankfurt School: Its History, Theories and Political Significance by Rolf Wiggershaus. Lind quoted a passage from the book's "Afterword"

Since the publication in 1970 of his book The Poverty of Critical Theory, Rohrmoser has promulgated, in constantly varying forms, the view that Marcuse, Adorno and Horkheimer were the terrorists’ intellectual foster-parents, who were using cultural revolution to destroy the traditions of the Christian West. Academics such as Ernst Topitsch and Kurt Sontheimer, who saw themselves as educators and liberal democrats, followed in Rohrmoser’s footsteps. In 1972 Topitsch, a critical rationalist who was Professor of Philosophy in Graz, had stated that behind the slogans of ‘rational discussion' and ‘dialogue free of domination’ there was being established at the universities ‘a distinct terrorism of political convictions such as has never existed before, even under Nazi tyranny’ 

What struck me as odd about the above passage was that "Rohrmoser" had no first name. At first, I suspected the passage was simply cut and pasted in without acknowledging that it was a quoted text. But the absence of quotation marks may have been simply an artifact of indent formatting lost during conversion to a web document. I was curious to find out Rohrmoser's first name, which appeared in the sentence before the passage quoted by Lind:

Günther Rohrmoser was a social philosopher employed by [Hans] Filbinger, who, as a judge at a naval court martial during the last days of the Second World War, had pronounced a scandalous death sentence which he defended during the 1970s by saying that what was the law then could not be injustice today.

Hans Karl Filbinger was Minister President of Baden-Württemberg from 1966 to 1978. In October of 1977, in response to the kidnapping and murder of Hanns Martin Schleyer by the Red Army Faction, Filbinger gave a speech in which he blamed the teachings of the Frankfurt School for the terrorism. Such accusations, elaborated by academics such as Rohrmoser, Topitsch, Sontheimer and others became the basis for efforts to suppress student activism and the teaching of Critical Theory.

In 1978, Filbinger was accused of having presided -- either as prosecutor or judge -- over the executions of several sailors at the conclusion of the Second World War. The Wikipedia article outlines extenuating circumstances in his favor: several of the death sentences were in absentia and never carried out, others were commuted to prison sentences and in the one case that resulted in an execution he appears, according to the Wikipedia article,  to have been "filling in" for a prosecutor who had already asked for the death sentence. In In Pursuit of German Memory: History, Television, and Politics After Auschwitz, Wulf Kansteiner offered the following account of the outcome of the scandal:

With proper symbolic guilt management, none of these facts would have ended Filbinger’s career, but he committed two major public relations mistakes that made his resignation inevitable. First, Filbinger failed to reveal the full record of his service as a military jurist; the press found a total of four death sentences that listed Filbinger as an officer of the court and that he professed to have forgotten. Second, although Filbinger explained and defended his actions at length, he never apologized to his colleagues, his voters, or the relatives of the soldiers he had condemned to death. He failed to realize that legal innocence no longer amounted to historical innocence. Just because he had not committed any crimes in the eyes of the law did not mean that he could survive in the court of public opinion.

So it wasn't the crimes Hans Filbinger committed -- or didn't commit -- but the cover-up that disgraced him. Lind's omission of the context for Wiggershaus's discussion of Rohrmoser's attacks on Critical Theory as the "foster parents of terrorism" deprives his readers of two crucial perspectives. The more sensational but ultimately trivial insight was the status of one of the accusers of the Frankfurt School as an actual Nazi who presided over at least one execution and subsequently tried to conceal his past.

But the more important aspect was the precedent in West Germany of the 1970s of a political campaign against Critical Theory orchestrated by high government officials. In addition to Filbinger, Franz Josef Strauss, leader of the Bavarian Christian Social Union, and Alfred Dregger chairman of the Christian Democratic Union in the state of Hesse "promptly labeled the Frankfurt School a cause of terrorism."

Jürgen Habermas gave a contemporaneous account of this assault on the Frankfurt School in an article that first appeared in Der Spiegel in October 1977 and was subsequently translated and published in the New German Critique. It is worthwhile to quote at some length from that article because illuminates an historical parallel that few Americans would be at all aware of:

As an undergraduate I was struck by the fact that such influential figures of the post-war generation, eminent men like Martin Heidegger and Carl Schmitt, had made politically astonishing statements and had advocated unfortunate doctrines. The first, as chancellor of the University of Freiburg, had welcomed the Nazis' seizure of power and exalted its significance metaphysically, while second had theoretically vindicated that state which Hitler created. After the war, neither of them considered an unequivocal political explanation or a public revision of their actions to be necessary. 

These shocking examples - and they are, after all, just examples - sharpened my, sharpened our awareness of the consequences of the theoretical matters which we teach and write. They are not simply arguments which are absorbed by the scholarly process and then survive or dissolve within it. On the contrary, as published and spoken words, they have an effect on readers and listeners at the moment of their reception which the author cannot revoke or withdraw as if he or she were dealing with logical propositions. Now of course it would be absurd to subscribe to the author the unintended consequences of an author's statements without considering the circumstances which surround them. It is, however, equally absurd to pretend that the ideological history of a work's consequences are entirely extrinsic. There is only one pragmatic escape from this dilemma, and unfortunately it is not easily put into practice. An author's awareness of this dilemma must sufficiently limit his teaching and writing: an individual should not succumb to the atmosphere of objective irresponsibility, nor should an individual expand moral accountability to such an extent that he or she is paralyzed by the fear of uncertain and unexplored areas. Then only silence would remain. 

It is obvious that Strauss and Dregger want to intimidate us so that we shall seek refuge in this last alternative. Both obscure the fact that in the 1960s it was the left-wing professors who were especially and distinctly conscious of intellectual causalities. Instead Strauss and Dregger construct a scenario of objective responsibility in a manner which until now has only met with approval in the dominions of Stalinist bureaucrats.

Does William Lind take responsibility for the (presumably) unintended consequences of what he has written, given the dilemma framed above by Habermas? Lind does a weekly YouTube broadcast called traditionalRIGHT in which he gives his opinions on items in the news. On March 17, he discussed the mass murders in Christchurch. On March 24, he addressed an executive order signed by Donald Trump that would cut off federal funding from universities that inhibited the "free speech" of conservatives. I have listened to these segments several times and downloaded transcripts that I have read closely. I will present my summary and interpretation of them in a subsequent post. 

Looking for Mister Good Barr

I confess. I posted The Barr Letter and Useful Idiots of the Jaded Left to troll for tin-foil hats. I am agnostic on the Mueller investigation. I have never viewed Mueller, Comey or Rachel Maddow as the savior of truth, justice and the American Way. My objection to Taibbi, Greenwald et al.'s gloating is primarily against their premature ejaculation -- although their glee is also reprehensible under the circumstances.

But here is the thing about tin-foil hat thinking: if you are going to engage in it, do it right. Let's say there is this vast establishment, deep state conspiracy to overthrow the popular will electoral college result of the 2016 election. Hey, I can get down with that! What makes the Glenns and the Matts and the Halaszes and likbezes so confident that William Barr isn't part of that conspiracy? Absolutely nothing. They simply haven't thought through their heist.

Here's how I would NAIL Donald Trump if I was William Barr: I would write a four-page letter that appears to exonerate him from conspiracy or coordination and in which I explicitly decline to indict on obstruction of justice charges. See what I did there? No?

I sidestepped the "can't indict a sitting President" rule. That sets a precedent. Now we let that settle in for a while. Nobody objects -- least of all the President of the United States who thinks he has just been cleared. Next comes the indictment from SDNY. But wait a minute! You can't indict a sitting President! Oh yeah? The Attorney General just waived that rule.

Is my little scenario true? I doubt it. But it is no less plausible than the half-baked conspiracy scenarios heralded by the half-cocked tin-foil hat crew. Of course the paranoid style is not noted for  consistency or for thinking things through.

Maybe No Conspiracy Or Coordination, But Lots And Lots Of Collusion

Trump and his supporters have been loudly claiming that the Barr letter about the Mueller report has shown "no collusion!" which has been shouted loudly from the rooftops, with many supposedly respectable sources such as the New York Times agreeing with this assessment, thus supporting the long running Trump/Hannity repeated claim.

But I note that the big headline on this morning's Washington Post was "Mueller Finds No Conspiracy," not "No Collusion."  Indeed, a careful reading of the clearly carefully written Barr letter finds it not using the word "collusion" at all.  Its crucial getting Trump off a major hook says that the available evidence suggests that there was "no conspiracy and no coordination."  Nothing about collusion.

Clearly few have even notieced this, very few besides myself so far, but I did occasionally see commentators noting that while Trump/Hannity were constantly denying "collusion" with the Russians, Mueller was not investigsting that, ssomething that is not iillegal in any case, but instead "conspiracy" was what was being investigated, something that is a crime.  While I am about to accuse Trump of stupidity, I think he or somebody figured it out that pushing this "no collusion" line would end up as it has as indeed Mueller was not investigating the not-illegal "collusion."  So far, they are getting away with this scam.

So how do these things differ?  Conspiracy and cooedination both imply some amount of planning and direction, with for conspiracy some sort of communication and agreement on the plan with the other conspiring party, namely the Russians.  What apparently the Mueller report finds is none of that: no central plan or direction or the making of such a plan with the Russians.  This indeed looks like it is true, although some of what went on around the Trump Tower meeting gets pretty borderline, even as that seems to have been sort of a mutually botched meeting.

But on the matter of collusion we have piles of evidence that this has occurred, and the evidence is the large pile of indictments that Mueller has brought forward against a lot of people, with many of those charged with having unreported meetings and dealings with Russians, including passing of information back and forth, with many of these then lying about all this, and with some of these people pleading guilty of what they were charrged with.  These actions have involved very clearly in many cases collusion with the Russians rhese people were dealing with.  The crucial diffeeence is that it appears that all this collusion was unplanned and undirected.  It was disorganized and spontaneous collusion, although serious enough to bring about efforts to cover up what was going on by many, including apparently Trump himself, even if AG Barr has decided he did not commit obstruction of justice.

The only person I have seen so far to have sort of caught on to this, although not quite as clearly as I am stating here, Juan Cole today.  He notes that Trump himself is simply so disorganized and frankly stupid that he is barely capable of cooking up such an organized conspiracy. No conspiracy was organized.  But given his situation of being deeply in hock to the Russians and wanting major business with them, showed up in the many efforts to work together, especially given that Mueller's group found the Russians actively intervening in the election itself to the point that Mueller indicted a bunch of them, although it seems they were largely working without any plan or coordination with Trump or his campaign. 

To close this out, of course I am watchng Hannity, who is ranting and raving about "no collusion," but he is lying as usual.  He demands the rest of the media to apologize, but he is the liar.  There was lots and lots of collusion, and we know it.  It was simply collusion without any organized conspiracy or  coordination.

Barkley Rosser

The Barr Letter and Useful Idiots of the Jaded Left

As everyone knows by now, President Trump has been totally "exonerated" for everything, ever, by a four-page letter from William Barr, the Attorney General whom he appointed expressly to "exonerate" him. With regard to potential obstruction-of-justice, on page three of his letter, Barr cited Special Counsel Mueller's statement that "while this report does not conclude that the President committed a crime, it also does not exonerate him."

Understandably, Trump's allies and surrogates are ecstatic that Trump has been so unequivocally and unconditionally exonerated by a letter about a report that "does not exonerate him." But the gloating does not stop there. A contingent of "left" journalists and self-styled pundits are jumping in the self-congratulatory bandwagon.

The "leftist" critique of the Russia collusion story follows a certain "dialectical" logic: first, the lesser of two evils is the greater danger and therefore my foe and second, the enemy of my enemy is my friend. Alleged journalist Glenn Greenwald presents an inarticulate version of this critique when he sputters hyperbole on Democracy Now. Greenwald magically transforms not establishing an actionable criminal case into not a shred of evidence.

Matt Taibbi gives a more nuanced performance in comparing Russiagate to the Bush administration's lies about Saddam's weapons of mass destruction. Taibbi qualifies his hyperbole by noting the hundreds of thousands of deaths and trillions of dollars wasted as a result of the latter. "Unless Russiagate leads to a nuclear conflict, we’re unlikely to ever see that level of consequence." But in terms of journalism?

As a purely journalistic failure, however, WMD was a pimple compared to Russiagate. The sheer scale of the errors and exaggerations this time around dwarfs the last mess. Worse, it’s led to most journalists accepting a radical change in mission. We’ve become sides-choosers, obliterating the concept of the press as an independent institution whose primary role is sorting fact and fiction.

What a load of bollocks. Are we now supposed to believe that up until the time of the Steele dossier, the corporate news media was "an independent institution whose primary role is sorting fact and fiction"? Fox? Breitbart? Daily Caller? Not to mention non-stop CNN and NYT coverage of Trump rallies, diners in rural Pennsylvania, personable neo-Nazis, Clinton emails and climate change...

In his comprehensive critique of journalistic failure, Taibbi mentioned Fox once and the Daily Caller twice -- to note their coverage of Michael Cohen's denial of having ever been in Prague. Throughout the whole affair, the vast right-wing propaganda Wurlitzer was presumably acting as "an independent institution whose primary role is sorting fact and fiction." Thank you, Matt Taibbi for your bold refusal to choose sides!

Not that it matters, but the mainstream media framing of the Russia collusion story was orchestrated by the "victim" of the "witch hunt." The Mueller investigation was initiated by the Trump-appointed Deputy Attorney General who wrote the memo to give Trump cover for firing James Comey. The soi-disant "left" critics of Russiagate have bought that framing and are now gloating that "their side" has won.

Alan Krueger And Happiness

It took awhile for me to remember after his apparent suicide that the late Alan Krueger was the coauthor of what I consider to be the best paper published on happiness economics, "Develpments in the Measurement of Subjective Well-Being," Journal of Economic Perspectives, 2006, 20(1), 2-24, https://www.aeaweb.org/articles?id=10.1257/08953300677 .  (I apologize if that link is no good.)

This paper was coauthored with is Princeton colleague, Nobel-Prize winning psychologist Daniel Kahneman.  What stood out was that this was as well done an empirical study of this difficult topic as I have ever seen, and above all in terms of his professional accomplishments, Krueger's abillity to carry out very well done empirical studies stands above all else, and this paper with Kahneman certainly fits into that category.

Happiness research, or more properly research on "subjective well-being" as their paper titel put it, has been a controversial mess for some time.  The journals I have edited have been major outlets for this research, so I have seen lots of papers on it.  Not only that, but I have seen the referee reports on those papers, and this area of research has somehow attracted a lot of unhappy people taking out their unhappiness on papers that they referee.  This is not true  of all people in this field, and  I shall especially single out Richard  Easterlin, the fathr  of the field, who retired from USC last year at age 92 and deserves a Nobel Prize.  But many others in the field are not as happy as he has always been.

There are three main sources of data for these studies: cross-sectional cross-national, time-series within a naton, and panel studies of individuals over time (hence, also time-series).  I have listed them in increasing order of scientific credibility. Even so, these least credible cross-section studies get lots of media attention. I mean, wow! the UN just released its latest World Happiness Report, and, wow! Finland is Number One, despite having a way-above average suicide rate. But, hey, the suicides are not showing up in the survey.  And wow! the US has continued to decline, now at #19 or thereabouts, which is probably meaningful given that the US is the only high income nation in the world with a declining life  expectancy.

The middle of these, time-seires inside a nation , does not have the cross-cultural problems that the previous method has, but it has the problem that people die over time so the sample is different people at different time periods. In any case, it  was these data sets on Japan and the US that led Dick Easterlin to enunciate his "Easterlin Paradox," (no, he did not name it that), that while a nation with rising real income per capita always showed that at any point in time higher income people were happier than poorer people, over time overall happiness levels did not rise.  Indeed, for the US they have gradually declined, with 1956 being the year of maximum recorded happiness in the US, even though real incomes per capita have risen quite substantially since then.

Which brings us to the final method, the one I take the most serously, panel studies of individuals.  Yes, this is what Kahneman and Krueger did with a set of 500 women in Columbus, Ohio over aa period of time, monitoring almost minute by minute, very closely, the most detailed and credible study of this sort I have seen.  They found that these women preferred being with their friends more than with their husbands or lovers, and those more than their children.  The only people they were less happy being around than being alone with were their bosses, oh, big surprise.  In terms of more specific situations, they most liked "intimate relations," so those spouses and lovers got their due, with their least favorite social situation being stuck in traffic jams, which suggests to me that having people commute with friends is a good idea.

So, there we have it. Alan Krueger was a serious researcher in happiness economics.  It has also come out that in reent years he has also studies effects of the opiod crisis and also mental health issues more broadly. I have not read these more recent papers, but I am confident that he applied the high standards of professional empirical research to these topics that he did to his exceptionally outstanding paper with Daniel Kahneman on happiness.  Pretty obviously now in hindsight that he was concerned with these topics suggets that indeed this interest may have been driven by a deeper personal concern.  Pretty clearly, while he may have coauthored the best paper ever written on happiness, in the end he was not himself all that happy.

RIP, Alan.

Barkley Rosser

No More Fed Rate Hikes in 2019...

The fundamentals are "sound"?:

PICTURE = 1000 WORDS

A Small Anecdote about Alan Krueger

It was back at the beginning of the 1990s, and I was putting together a panel on NAFTA for the ASSA meetings.  This would be URPE’s big plenary at the event, and, among others, I was able to enlist Cuauhtémoc Cárdenas, a leader of uncommon integrity and seriousness of purpose whose victory in the 1988 Mexican presidential election was overturned through blatant fraud.  I wanted someone of stature to present the case in favor of NAFTA, however, and I thought of Krueger because of his influential paper with Gene Grossman that argued for an “Environmental Kuznets Curve”.  (I discovered later the paper had been financed by the Mexican government.)  I sent a request to him, and he agreed to do it. 

Needless to say, he faced a hostile audience.  He was denounced from the floor, and there was no one in the room to defend him.  I disagreed with him too, but on a human level I admired his willingness to take on this job—one for which he would receive no reward of any sort from his department, university or profession.  I’ve had the experience of making similar requests to bring mainstream panelists to URPE events (something I believe in strongly), and it isn’t an easy sell.  Alan took it all in stride.

I’ve subsequently leaned on him a few times for his opinion about empirical controversies I needed to address for UN-related work, and he was always prompt and helpful, a real mensch.  I’m sorry to see him leave us long before his time.

Boeing and the FAA: Rethinking Regulation

This analysis of Boeing’s catastrophic design failure on the 737 Max confirms speculation from other sources; interestingly, it was prepared even before last week’s crash in Ethiopia.  Engineers can pick apart the technical aspects, beginning with the underlying tradeoff between energy efficiency and stability (why nose elevation and drop was such a problem to begin with), but I’m interested in the political economy dimension.

Under the Obama administration, the FAA chose to delegate critical design oversight to Boeing itself; it too went for “resource efficiency” and time-to-market over safety.  Boeing in turn pressured its engineers to approve a dangerously flawed product.  The article provides detail on the corners that were cut, and they are devastating.  The only upside of FAA regulation seems to be that it now allows Boeing to claim, “the FAA considered the final configuration and operating parameters of MCAS during MAX certification, and concluded that it met all certification and regulatory requirements.”  Ironic, when “FAA” in this case means “we”.

But how should regulation be configured in a situation like this?  Is it enough to say that the agency in question, whether the FAA or some other body, should avoid being captured by those they regulate?  Why would we expect that to work?  Part of the problem is simple corruption, since political appointees and even Obama himself stood to benefit from quid pro quo’s offered by regulated firms like Boeing.  That’s structural and hard to dismantle.  (Whenever the solution is virtue we are in real trouble.)  But another part is that Boeing engineers, having been involved in the design process, familiar with its evolution and cognizant of where the bodies are buried, truly are the most qualified to assess adherence to safety standards.  I have no doubt that, in the weeks and months ahead, we will hear stories of engineers who tried to warn the company about the issues with MAX but were brushed aside or even silenced.  From this standpoint, the issue is not that there aren’t resources for scrutinizing safety, but that those resources are too much under the control of management.

Looked at this way, one avenue for reform is greater worker control.  If engineers had more power on the job, for instance through representation on works councils or the board of directors, top brass might not be able to silence them.  Maybe.  But consider the case of Volkswagen, whose workforce was unionized and represented through both a works council and co-management (Mitbestimmung), and where regional government also had a voice in policy.  In some ways this was the most “socialist” of car companies, and yet it was the epicenter of a pollution scandal that has caused at least an order of magnitude more deaths than Boeing.  Ultimately, if your paycheck comes from the company and you face market pressure from competitors, you have the same incentives the people at the top do.

So, while I favor a much greater say for workers on other grounds, I don’t think it solves the problem of regulatory capture.  Here’s an alternative:

1. Deputize the appropriate professional organization, meaning an organization that represents professionals across all employers is given authority to determine whether standards are being enforced.  (I suspect the standards themselves may still need to be set politically, at least in part, but maybe not.)  In the case of Boeing this would mean an independent association of safety engineers would be entrusted with regulating the safety of aircraft, as well as other types of hazardous equipment like automobiles.  You could envision similar roles for professional bodies in accounting, law, environmental management, occupational safety and health, etc.

2. Require, based on payroll size, assets, sales or some combined metric, a certain number of these professional positions (e.g. safety engineers) to work in the firm but be selected by their association.  These people would be employed by the professional group, paid and promoted by them, and subject to restrictions on quitting and taking jobs with the firms they are supposed to be regulating.  Their incentives would clearly be on the side of maintaining professional standards, not bending them for the benefit of a particular enterprise.

3. The “outside” professionals would, however, be free to work on any project needed by the company, provided they were not systematically excluded from operations critical to regulatory goals.  In a sense, they would be free resources to the firm, valuable to the extent they are not discriminated against.  If they are subject to discrimination, this would be immediately apparent, and their parent organization could intervene to challenge it.  Thus, if a major safety challenge with the MAX has to do with controlling pitch due to engine placement, it would be noticeable if an entire group of safety engineers was sidelined from it.  In other words, companies would be required to utilize external professionals in a nondiscriminatory manner, and this stipulation could be enforced just as any other nondiscrimination rule would be.

4. The work of outside people would be evaluated according to the professional standards of the organization they represent.  This includes high quality work for the company they’ve been detailed to, as well as careful monitoring of company performance according to professional criteria.

From a theoretical standpoint, this sort of system (which of course would need a lot more detail in order to become a formal proposal) should be seen as a step toward the socialization of the corporation.  It is a means for exercising social control, but it does not turn to an expansion of government power.  Instead it uses civil society groups as much as possible—groups that are of society and not just hypothetical representatives of its interests.  And it tries to alter what corporations are and how they function, turning them into better instruments for the achievement of social goals rather than simply setting external boundaries to their behavior.  (Incidentally, this applies no matter what form corporate ownership takes.)

This strategy can be used in many other ways to bring economic considerations together with environmental, social and cultural ones.  What’s needed is a structural approach to putting people and planet on a par with profit, not just flowery mission statements.

Introductory Econ Textbooks: A Different Take on the Issues

My eyes were drawn to Timothy Taylor’s gloss on Greg Mankiw’s ruminations on the life of an econ textbook author.  As such an animal myself (Microeconomics and Macroeconomics: A Fresh Start), I’ve thought about many of the same questions.  Differently.

Issue #1: How do you teach the introductory economics courses if you have a dissenting perspective?  Mankiw lays out three alternatives, teaching the mainstream and suppressing your own views, teaching minority or fringe views (i.e. your own), or not teaching introductory econ at all.  He says the second option is “pedagogical malpractice”, and Taylor agrees.  I opted for an approach neither of them consider, to present mainstream economics in the third person: this is what that particular group thinks.  Allow for a critical distancing, which is not the same as critique.  I didn’t write “this stuff is garbage”, but “here are the assumptions that conventional economists make that distinguish their approach from others.”  Whenever possible, I point out where other disciplines differ, and while I encourage students to judge for themselves, I don’t pressure them into adopting any one point of view.  This is called critical thinking, and it barely exists in the world of economics textbooks, which proselytize shamelessly.

Issue #2: What should be the role of supply and demand theory and, in particular, the welfare interpretation of it?  Mankiw feels welfare economics gets short shrift in the typical intro econ course and text, while Taylor demurs.  I am mostly on Mankiw’s side here, but from a critical perspective.  I agree entirely that welfarism underlies virtually all applied econ work outside macroeconomics, and it’s important for students to understand what it means.  We just saw a “Nobel” prize awarded to an economist, Bill Nordhaus, whose primary claim to fame is an application of the welfare framework to climate change.  Nearly every economist working on climate issues adopts the same approach.  It would not be an exaggeration, however, to say that the vast majority of climate scientists regard their work as nuts.  Clearly there is a pressing need to present the underpinnings of welfare economics to as wide an audience as possible, so they can understand these disputes.

In my micro text I devoted half of one chapter and all of another to these foundations, which I called the Market Welfare Model.  As I defined it, the model has three conditions, that the supply curve represents the marginal cost to society of the good in question, the demand curve the marginal benefit to society, and that there is a single, stable market-clearing equilibrium.  The half chapter spells out precisely what “social cost” and “social benefit” mean in economics (which is not what they mean in other frameworks), and the full chapter is devoted to working out the logic that goes from these framing concepts to the welfarist conclusion.  A further chapter on market failure takes up the first two conditions, and the final chapter on general equilibrium theory considers the third.  In one sense, this is Mankiw on steroids, but I think he would recoil at the critical distancing with which all this is presented.

Issue #3: Do current economics textbooks cover too many detailed topics?  The argument that one hears not only from Mankiw but also many other authors is that the incentives of the textbook biz bias toward over-inclusion.  Each reviewer has a favored topic and lobbies the publisher to have it included.  The argument is made that it is easier for an instructor to skip the stuff they don’t care about than conjure up what’s missing that they consider indispensable.  The result is a massive tome bristling with highly specialized material of limited interest at the expense of deep treatment of the key ideas.  Taylor mostly agrees.

I do too, but again with a somewhat different take.  First, I’ve come to think that a good introduction to a discipline would present a set of exemplars that would be relatively standard for new learners.  For instance, climate change should be given detailed treatment in every introductory text, micro and macro alike, where the concepts and tools being developed could be given a bit of a workout to see what they mean in real life.  This should not take the form of a just-so story where climate change just happens to validate everything we always thought, but a test of the strengths, weaknesses and limits of a given approach.  I can imagine a number of other potentially canonical examples: the pay-productivity relationship, health care, financial stability—topics of longstanding interest that are complex enough to illuminate multiple questions in economics.  I confess to not having understood that very well when I wrote my micro text, but I had it mostly figured out when I came to macro.

Second, what makes a “specialized” topic germane to introductory treatment in my book (literally) is its relationship to the core assumptions economists make.  Information asymmetry and the strategic perspective of game theory, for example, are often treated as specialized, but for me they are foundational.  I made a point of presenting a prisoner’s dilemma payoff matrix before a supply and demand diagram in the micro text, since to me the distinction between individual and collective rationality is prior to any other treatment of what economists regard as rational behavior.  (So is a discussion of the psychological assumptions economists make about the nature of rationality, as well as their reduction of all social behavior to choice and exchange.)  General equilibrium theory for me is not a special topic at all, a throwaway add-on, but a primary investigation of whether or to what extent the supply-and-demand metaphor works.  On the other hand, I’ve reluctantly come to think that much of what is covered in the treatment of risk actually is specialized.  It’s certainly important—absolutely indispensable in some contexts—but a student can get the gist of what economics is about without wading into the arcana of certainty equivalence.  Just about all of the so-called microfoundations of macro falls into this category as well.

Issue #4: Should textbooks be free?  Mankiw says no, and he bases his argument on the presumption of market efficiency: if existing textbook publishers, who are disciplined by competition, can’t put a book on the market for less that $200 a pop, where could the cost savings come from?  Wouldn’t “price controls”, like a zero price, require a corresponding reduction in quality?  Taylor, who has actually worked on a reduced-cost e-text project, thinks textbook quality is fairly standardized, but not so the ancillary materials like tutorial software, prefab presentations and text banks.  Here is where we would find the downside of cheap.

My perspective is rather distant from theirs.  First, I think economics is definitely not a settled field, nor is economic pedagogy a done deal.  There is plenty of experimentation that needs to be done, and this requires a multiplicity of texts instructors can choose from.  (Austrians should understand this point in their bones.)  The issue is not quality per se, but innovation and rivalry, or at least the opportunity to try out alternative approaches and assess the results.  This is why I am concerned about the movement to standardize textbooks in order to achieve zero cost.  The price is right, but the standardization is not.

Second, the arms race in ancillaries is a reflection of poor pedagogy in economics.  Of all the social sciences, economics gives the least disciplinary attention to teaching strategies.  I haven’t done the quantitative work (has anyone?), but based on my experience, there are fewer sessions at the ASSA meetings devoted to pedagogy than you would find in most other fields.  Economists have been notoriously slow to transition to active learning methods, much less a true critical thinking framework.  This is visible in most of the baroque supplementary material purveyed by textbook publishers, a deadly, mind-numbing hammering of procedures (diagram manipulation) to be inscribed in short-term memory.  Not that it’s all bad, of course.  I transitioned this term to a flipped classroom: I recorded my lectures and posted them online (with short self-graded quizzes to encourage and document attention) in order to maximize class time for workshops and other activities.  In general, however, active learning is less given to prefabricated, standardized aids; it is tailored to the students in front of you, the issues of the moment, and the flow logic of how well various ideas are gelling from week to week.  The best ancillary would be a guidebook for instructors explaining the techniques for crafting small research projects and engaging workshops, along with examples of what has worked in the past.

All that said, zero is still the best price.  I think it’s appropriate for foundations or other funding sources to support a multiplicity of free textbook options.  (I’m not looking at you, Bill Gates.)  INET has done this with its CORE project, but no one else.  I don’t think funding is the whole story, however.  Economics needs to regard pedagogy as one of its central missions.  This is not only a matter of having more panels about it at the national meetings; there needs to be more disciplinary reward for putting one’s time and energy into the development of strategies and materials for the classroom.  This means promotion, prizes and esteem, and it would require a substantial cultural shift.  Where to begin?  I suspect we have a vicious circle that could well become virtuous.  Today we have a bleak landscape of minimal innovation in pedagogy and little institutional recognition for those who do this work.  In a world well-populated with innovative experiments in teaching and learning, it would be natural to reward the most successful or even just provocative projects.  So again the next step seems to belong to the funders.