But when equity and efficiency trade-offs do arise, economists like Sanderson are systematically biased in favor of efficiency because that's what they are experts on. Efficiency they can measure and analyze. Fairness? That's the turf of philosophers and politicians. This tendency is most pronounced in discussions of economic growth, and how the benefits of that growth should be distributed. Sanderson paraphrases his Nobel Laureate colleague Bob Lucas, who says that "once you start to think about the benefits of high growth, it's hard to think about anything else." In other words, first worry about how best to grow the pie, then how to slice it up. Let efficiency trump equity, create wealth, and then you can use the extra wealth you've created to alleviate inequality. This makes a certain amount of sense. But when this rhetoric comes to dominate our politics, the problem of inequality is never addressed. Now is always the time for growing, later is always the time to address concerns about equity. The result is predictable: In countries that have adopted the neoclassical policy prescriptions (including the United States), there has been an ever-widening gap between rich and poor.
This makes a certain amount of sense. But when this rhetoric comes to dominate our politics, the problem of inequality is never addressed. Now is always the time for growing, later is always the time to address concerns about equity. The result is predictable: In countries that have adopted the neoclassical policy prescriptions (including the United States), there has been an ever-widening gap between rich and poor.
Ah yes, but it could be redistributed, they say... In the long run, we're all dead. John Maynard Keynes
As Caplan sort of sees a economic illiteracy in the populace, the negative consequences of which might be remedied by giving people an economic literacy test before they're allowed to vote, I'd like to reciprocate by proposing that economists have to read 'A Modest Proposal' after finishing their freshman year and answer these two open questions:
Did Swift, within his historical setting, have a point?
If not, what is wrong with his logic?
Depending upon the quality of their response, we might judge whether they are allowed to study on and are permitted to give any policy advice, ever.
(As a guideline: Caplan, it seems, would not have passed this test)
