Do good economists need to be right wing?

[TheDeadFlagBlues]

Part of this is because to my understanding, intro economics classes tend toward right-wing conclusions (like minimum wage & rent control are bad) whereas higher-level economics courses take a lot more variables into consideration.

Rent controls ARE, usually, bad, even if you are a left-winger

I know that, but those tend not to be the focus of higher-level economics, right?  I was referring more to the focus of lower-level vs. higher-level in addition to the conclusions drawn.  I know there's a lot more debate about the minimum wage in more advanced economics classes, while it's clearly cast in a negative light in a basic economics class.

Of course rent controls are bad, and I believe the minimum wage is too for the most part.  I was just trying to give my hypothesis for why phD economists seem to be more liberal than BA/BS/"self-educated" economists.

AggregateDemand, it can go both ways......in some ways it's better to have complex models taking many factors into account, but there is a lot of value to focusing on the fundamentals.  A lot of the simpler climate models did a better job predicting temperature than the more complex ones.  I think the "god complex" is a bit extreme of a thing to say.

A majority of econ grad students are self-identified liberals. If I recall correctly, the study I saw showed an approximately 50-10 liberal/conservative split. At Yale and Harvard, it was closer to 60/6-7.

Does this mean that they're left-wing? Not really but it's proof that most younger economists tend to tilt towards the left. For what it's worth, every economics professor I've had has been progressive.

[TheDeadFlagBlues]

Part of this is because to my understanding, intro economics classes tend toward right-wing conclusions (like minimum wage & rent control are bad) whereas higher-level economics courses take a lot more variables into consideration.

Rent controls ARE, usually, bad, even if you are a left-winger

I know that, but those tend not to be the focus of higher-level economics, right?  I was referring more to the focus of lower-level vs. higher-level in addition to the conclusions drawn.  I know there's a lot more debate about the minimum wage in more advanced economics classes, while it's clearly cast in a negative light in a basic economics class.

Of course rent controls are bad, and I believe the minimum wage is too for the most part.  I was just trying to give my hypothesis for why phD economists seem to be more liberal than BA/BS/"self-educated" economists.

AggregateDemand, it can go both ways......in some ways it's better to have complex models taking many factors into account, but there is a lot of value to focusing on the fundamentals.  A lot of the simpler climate models did a better job predicting temperature than the more complex ones.  I think the "god complex" is a bit extreme of a thing to say.

A majority of econ grad students are self-identified liberals. If I recall correctly, the study I saw showed an approximately 50-10 liberal/conservative split. At Yale and Harvard, it was closer to 60/6-7.

Does this mean that they're left-wing? Not really but it's proof that most younger economists tend to tilt towards the left. For what it's worth, every economics professor I've had has been progressive.

It's interesting, because the trend for people with an Econ BA/BS is the opposite. 

http://www.huffingtonpost.com/2010/06/07/studying-economics-in-col_n_603180.html?

There definitely seems to be a dichotomy between undergrad vs grad school in econ; granted, even for grad school, I bet the average Econ phD student would be further right than the median phD student.

     I think it might have quite a bit to do with the communities involved. Like many folks in college, I imagine Econ students fancy themselves progressive. In many ways maybe they are, but they probably tend further right than they realize due to the number of right-wing positions that are not seriously disputed within the economic community (as mentioned in this thread, things like free trade and opposition to rent control).

Free trade is more disputed within the economic community than is realized by the public. Obviously, economists are averse to protectionism but "progressive" economists have a pretty nuanced view of most free trade agreements which ranges from indifference (Krugman) to staunch opposition (Stiglitz). I'd say the same thing about rent control.

On principle, economists support free trade and oppose rent control. However, the devil is in the details.

[TheDeadFlagBlues]

The infant industry argument always seemed odd to me. If the investment makes sense why wouldn't it happen anyway?

High-value added industries require enormous sums of investment which need to be sustained over long periods of time. Without infant industry protection, it's hard for me to understand how this kind of investment could be perceived as viable or worthwhile. By "high-value added industries", I don't mean plants that assemble parts or plants that produce individual parts but rather an entire supply chain contained within a domestic economy.

[TheDeadFlagBlues]

The infant industry argument always seemed odd to me. If the investment makes sense why wouldn't it happen anyway?

High-value added industries require enormous sums of investment which need to be sustained over long periods of time. Without infant industry protection, it's hard for me to understand how this kind of investment could be perceived as viable or worthwhile. By "high-value added industries", I don't mean plants that assemble parts or plants that produce individual parts but rather an entire supply chain contained within a domestic economy.

If it's not viable or worthwhile, then why do it?

Because it will become viable long term. South Korea did it very successfully.

^^^

Nearly developed nation that produces and exports "high-value added" goods protected infant industries from foreign competition in the past. Although I haven't looked at the economic literature on this subject, I think that economic theory could support "infant industry protection" as a viable economic strategy.

[TheDeadFlagBlues]

The infant industry argument always seemed odd to me. If the investment makes sense why wouldn't it happen anyway?

High-value added industries require enormous sums of investment which need to be sustained over long periods of time. Without infant industry protection, it's hard for me to understand how this kind of investment could be perceived as viable or worthwhile. By "high-value added industries", I don't mean plants that assemble parts or plants that produce individual parts but rather an entire supply chain contained within a domestic economy.

If it's not viable or worthwhile, then why do it?

Because it will become viable long term. South Korea did it very successfully.

^^^

Nearly developed nation that produces and exports "high-value added" goods protected infant industries from foreign competition in the past. Although I haven't looked at the economic literature on this subject, I think that economic theory could support "infant industry protection" as a viable economic strategy.

Why doesn't anyone want to get this long term profit then?

For one, the long term profit couldn't be realized without infant industry protection: assuming that there would be no tariffs or subsidies, there'd be no ability for a relatively new firm to compete against a relatively old firm for a variety of reasons. Also, investors are not willing to make this kind of commitment due to the long time horizon for the maturation of the investment. Investors would rather seek quicker short-term profits elsewhere for simple behavioral reasons: investors have a limited lifespan.

I apologize for my "on a napkin" argument but I think this makes intuitive sense, even within the confines of neo-classical models.

[TheDeadFlagBlues]

Gustaf, I don't think it's exactly a strange claim to say that governments have more flexibility than investors. Not that I disagree with your response to my post; I need to do more research to provide an adequate response. Historically, it seems that infant industry protection was used to great effect and is a useful policy.