December 14, 2017 Economic Illiteracy

I have written this a zillion times before … but I have been in and around economics since 1993, and never in my entire career have I had a teacher or article or book teach me about “trickle down” economics. This is a perjorative term conjured from the ether by anti-market proponents, and the strawiest of straw men with which to criticize markets.

I will give a dollar (or produce a short blog post in your honor) to anyone who can name who said the following:

Unlike Friedman the “evangelical,” added _____, ______ was more of an “anthropologist” with little interest in influencing policymakers or becoming one himself. At a press briefing following a meeting with President Reagan shortly after he won the Nobel, _____famously remarked that the economy was in a “depression” and that if he had been Reagan’s economics professor, he would have given the president an “incomplete.” When asked what he thought of trickle-down/supply-side economics—the bedrock of Reaganomics—_____ called it “a gimmick.” Shortly thereafter, he was booted offstage.

No peeking. And no, it was not Paul Krugman.

As you might imagine, I sort of put this fellow in the economics version of Richard Feynman, and I believe his work is still understudied at least at the intro level. Here is another excerpt:

He could also be fiercely independent in his views. ____ recalled a debate between ____ and Friedrich Hayek over welfare capitalism. Hayek believed even a little bit of welfare capitalism would eventually lead to a totalitarian, Soviet-like regime. _____ disagreed. “To paraphrase, ____ said we already have a great deal of welfare capitalism and nothing seems to have been destroyed. We still have a great economy and a great political system which gives consumers the opportunity to express themselves, both through their purchasing and also through their electoral behavior, and they seem to be satisfied. Maybe there isn’t a slippery slope.” The debate between the two continued up until _______’s death in December 1991. Hayek followed suit a few months later.

"3" Comments
  1. Gregory van Kipnis

    George Stigler exhibiting his most argumentative nature.

  2. And history shows us that Reagan was right and Stigler’s understanding was extremely “incomplete”.

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