In the April 24 Wall Street Journal (April 23 electronic version), regular writer Joseph Epstein, in an article titled “Is That an Augur, or a Mere Economist?” does a disservice to economics in two ways.
I’ll deal mainly with one of them.
Epstein writes:
Economics is supposed to be a science. The “dismal science” Thomas Carlyle called it, having in mind the dark views on population of the 19th-century English economist Thomas Malthus.
Epstein is right that Carlyle coined the term. But it had nothing to do with Thomas Robert Malthus.
The real story, as many long term readers of this site may remember, is far more interesting. It was uncovered years ago by David M. Levy and Sandra J. Peart. Their January 22, 2001 article is titled, “The Secret History of the Dismal Science.”
They write:
While this story [the story that Epstein and many others before him tell] is well-known, it is also wrong, so wrong that it is hard to imagine a story that is farther from the truth. At the most trivial level, Carlyle’s target was not Malthus, but economists such as John Stuart Mill, who argued that it was institutions, not race, that explained why some nations were rich and others poor. Carlyle attacked Mill, not for supporting Malthus’s predictions about the dire consequences of population growth, but for supporting the emancipation of slaves. It was this fact—that economics assumed that people were basically all the same, and thus all entitled to liberty—that led Carlyle to label economics “the dismal science.”
Later in their article, Levy and Peart write:
The Exeter Hall that Carlyle mentioned was a real building. Located on the Strand in London, it served as the political center of British evangelicalism. By invoking the marriage of economics and Exeter Hall, Carlyle is reminding us of a vastly important fact about 19th century British politics: Exeter Hall was not the only moral center of the British anti-slave movement. In the fight against slavery, Christian evangelicals such as William Wilberforce and Thomas Macaulay were joined by political economists, such as James Mill, Harriet Martineau, J. S. Mill, Archbishop Richard Whately and John Bright. The two sides agreed that slavery was wrong because Africans are humans, and all humans have the same rights. They however disagreed over exactly what it is that ties us together. The economists drew on their assumption that deep down, we all share the same basic human nature. The evangelicals drew on their assumption that we are literally all brothers and sisters since we share the same first parents, Adam and Eve.
Carlyle disagreed with the conclusion that slavery was wrong because he disagreed with the assumption that under the skin, people are all the same. He argued that blacks were subhumans (“two-legged cattle”), who needed the tutelage of whites wielding the “beneficent whip” if they were to contribute to the good of society.
In short, black lives matter.
As I’ve said when I’ve given talks in which I briefly discuss the origin of the term “the dismal science,” given that Carlyle rejected economics as the dismal science because it did not assume that blacks are subhumans, one wonders what this party animal would regard as hopeful?
The above is Epstein’s main disservice to economics. The other is to give the reader the impression that economics is all about opinion and, relatedly, that economists never agree on anything.
That comes across most clearly in the following:
How little in the way of unanimity they show. Whether one prefers the views of Larry Summers over those of Art Laffer or vice versa, nothing near a consensus among economists about the likely effect of these tariffs has arisen. What has emerged instead is the obvious influence of politics on economics. On Fox News economists strongly approve of the tariffs, on MSNBC economists just as strongly disapprove.
It’s kind of stunning that Epstein would single out the issue on which there actually is a consensus. As I wrote in the preface to the first edition of The Concise Encyclopedia of Economics, then called The Fortune Encyclopedia of Economics:
That economists agree on most micro issues became clear in the late seventies when the American Economic Review, the world’s largest-circulation economics journal, published an opinion poll of 211 economists. The poll found that 98 percent agreed with the statement “A ceiling on rents reduces the quantity and quality of housing available.” Similarly, 90 percent of economists agreed that “a minimum wage increases unemployment among young and unskilled workers.” And 97 percent agreed with the statement “Tariffs and import quotas reduce general economic welfare.” The entries on those topics in this encyclopedia explain why economists are in such startling agreement on these and many other issues. (italics added)
What about Larry Summers and Art Laffer? Larry Summers thinks that Trump’s tariffs will have bad effects. Unless, he has changed his mind since I read him last, so does Art Laffer. Also, although I’ve seen economic commentators on Fox News approve of Trump’s tariffs, I haven’t seen economists do so. As for MSNBC, I watch it too little to know.
Postscript: When I researched to find Art Laffer’s views on Trump’s tariffs, I found this interview with Larry Kudlow on Fox Business. The title is misleading. It’s true that Laffer is saying that Trump’s economic policies are spectacular. But when he actually discusses the trade issue, he notes that there’s nothing wrong with trade deficits; that Trump’s and his advisors’ way of calculating reciprocal tariffs is nonsense; and that the ultimate goal should be free trade for all countries. Laffer, like Larry Kudlow, sees Trump’s moves as a negotiating move to get other countries’ governments to lower their tariffs. I think Art Laffer is way too optimistic about Trump’s goals and his negotiating skills. But that’s separate from the issue of the harmful effects of tariffs. On that, Larry Summers and Art Laffer agree. (Indeed, near the end of the 10-minute interview, Laffer talks about how damaging Nixon’s 10% tariff was.)
