anti-mankiw at its finest

Here are two articles discussing movements to displace Social Analysis 10 at Harvard, popularly called "Ec 10", with an alternative curriculum said to encourage critical thinking and attention to the social implications of economic analysis. The first is from the Harvard Crimson and details the committee rejection of the alternative curriculum (April 10, 2003). The second is from the Harvard Disguide, 2006-2007, which is a manifesto of sorts against Ec 10. These are effectively Anti-Mankiw in their view of the mainstream. Calling out the consensus in economic thought as conservative and divorced from the real world, on-campus proponents of the alternative, headed by Steve Marglin (tenured in 1968, before many of the controversies around the Harvard Economics Department began in the early 1970s), wished to replace the syllabus with one that includes alternative frameworks social thought (some of which is actually considered mainstream in other social sciences) which talk about the economy, but which see it as an embedded part of society -- not some abstract world governed by mathematical laws. They are to be commended for their efforts, and the efforts deserved to be recalled at this point, especially as the textbook queue gears up for the fall.

What surprises me most about this movement is its emphasis on the critical analysis that is apparently absent from Ec 10 as it is currently taught. I mean, isn't that what college is supposed to be about? But in Mankiw's book and presumably his classes, all social phenomena is framed in terms of market efficiency, and there is no room for a bird's eye-view critique. Mankiw is certainly "balanced" to an extent, but underlying all of his "back and forth" on the political right and left is an implicitly positive view of the market. What I have a problem with is not the "positive view of the market"part -- it's the implicit part that irritates me, to no end.

Allow me to explain.

One of Mankiw's favorite books (aside from his own textbooks!) is Arthur Okun's Equality and Efficiency: The Big Tradeoff (1975). The book amazes me, not the least for the fact that conservatives love to point to the fact that Okun is a social democrat. So, it provides a nice medium where conservatives and liberals can debate the relative balance over efficiency and equality, where the "right policy" is probably something in the middle. Great!

How and why is Okun so effective, so popular, so widely regarded even today? (Indeed, among the top-selling books on economics.) Well, one way of answering this question is to note that the book frames everything in terms of tradeoffs. This is a key idea in mainstream economics. Economists love tradeoffs. See a previous post where I note the prevalence, in mainstream economic thought, of cost-benefit analysis and how a critique of that view may arise. According to Okun, any gains in equality must lead to lower efficiency because of, among other things, the existence of "leaky buckets" -- government bureaucracy which is nonproductive labor, just filling forms, etc. -- think of the DMV.

However, it's not hard to see that this view of a tradeoff is not the whole story -- just ask any citizen of a Western European welfare state about the "efficiency losses" of universal healthcare. They will probably look at you as if you are crazy (here's a hint: YOU ARE!!!). A critical analysis of Okun may question why the choice between equality and efficiency is seen as a tradeoff, and where equality and efficiency may actually complement each other. See them as complements, and the entire analytical framework of Okun, Mankiw, and others, breaks down.

Indeed, this idea of complementarity of institutions underlies much of the alternative thinking in economics and other social sciences. But it's hard to see when everything is framed in terms of the market, and then debates are framed concerning the relative gains of equality and efficiency as tradeoffs. As soon as we get rid of it as an abstract concept, that is, once we critically analyze the economic system, things become much more clear about the subjectivity of the relationships -- and this subjectivity often arises due to where you stand in the economy.

By the way, if you're interested in more of the history connected to the points made in the first paragraph, over the history of the Harvard Econ Department, you will definitely hear more about them in the coming weeks. They are integral to establishing a motivation behind Anti-Mankiw.