An excellent former student of mine writes of the following Noah Smith piece:
Noah Smith making a strong bid as the leading champion of the intelligent center-left,
I have a very hard time with this. Sure, the point of the article is that the term “neoliberalism” gets unfairly tossed around too much and that “markets and trade” broadly defined, have done an absurdly good job of leading people out of poverty. So, what’s the problem? It’s that Smith has written a stream of posts that I find to be disingenuous in their criticisms of basic economics, and Eco 101, and of the value of markets in general. Here is an example from this piece:
“many economists instinctively revert back to the toy models they learned in their introductory economics courses — models where free-market competition solves almost any problem”
Now, Smith portrays in his writing an appreciation for the literature and sound empiricism, yet I have never seen systematic evidence that this point is actually true. I took my first economics class in 1993, I have attended or taught at four different universities, I have read dozens and dozens of economics books, attended hundreds upon hundreds of talks and classes and seminars, and have taught well over a thousand (I should count) lectures in my career(s). And you know what? I have NEVER seen anyone argue that free market competition solves almost any problem. I mean it. Even among the most ardent market enthusiasts, you’ll often hear like, “it looks like this problem here is suffering from a lack of competition.” But since over half of the economics profession already leans left of center, and among those on the right I have never seen the “let ‘errrr rrrrrriiiippp” view of markets espoused, who is this “many?” Indeed, many economists openly mock the “toy models” in the intro courses. Indeed, I am lecturing tomorrow that “perfect competition is useless fantasy, no one believes it, it is not important, and may have only been useful to make it easier for lazy professors to write exam questions.” But maybe I am n=1.
We will continue this discussion.