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Egg-Faced
Economists
Jon Perdue 11-18-98
Ronald Reagan once quipped in a press
conference that he planned to smear some egg on his face and celebrate Halloween as a
liberal economist. During Reagan's first term, liberal economist John Kenneth Galbraith
wrote: "The Soviet system has made great material progress ...partly the Russian
system succeeds because in contrast with Western economies it makes full use of its
manpower." The same attitude of red-envy for the Soviet sys tem persisted through
Reagan's terms, right up to the final months of communism's collapse. In 1989 liberal
economist Lester Thurow wrote of the Soviet Union: "Today it is a country whose
economic achievements bear comparison with those of the U.S." Both Galbraith and
Thurow both remain solidly atop the economic elite's A-list.
The American Economics Association
recently devalued a prestigious award by giving it to an economist who claimed to have
discovered that the law of demand did not apply to the labor market. The economist
purported to have found that a hike in the minimum wage would result in employers
demanding more unskilled labor. If the economist had claimed to have found that a higher
price for any other commodity resulted in a demand for more of it, he would have been
laughed out of the economics profession.
From the rise of Keynesian
panaceanomics to the grandiose social and economic planning of the New Deal/Great Society
to the so-called "Asian Miracle," ample data has been accumulated on all
economic systems to debunk those that lack merit. But a cottage industry, if they can be
understood by those who populate them, has been created to discredit market theories that
would seem obvious to any freshman economics student.
Economists who understand and base
their work on simple, free-choice models of economic exchange have often been drowned out
by the voices of economist-mountebanks whose novel new approaches to social and economic
experimentation have eventually succeeded only in transferring wealth to themselves, while
leaving the larger populations that have to live under these systems to pick up the pieces
later.
As quantum mechanics has done for the
study of physics, economic study based on observing the elementary tran sactions of
consumers based on fundamental laws of individual choice has given us the proper picture
of how the economy works and how not to impede it. Yet, like the singularity in quantum
physics, all known laws seem to break down inside the event horizon of leftist academia.
Unlike the high-tech industries of
commerce and academia, where technology and scientific discovery is driven by those most
skilled in theory and experimentation, economic policy is still driven by those most
skilled in rhetoric . In economic academia, where tenure and publishing contracts still
abound, the most common characteristic of economic professors is that they have all been
previously duped by wrong-headed utopian economic schemes from communist central planning
to the Fabian socialism of today.
But Ivy League economics departments
are not peopled by those whose predictive records bear the greatest historical accuracy.
Ivory Tower intellectual capital is acquired by demonstrating polemical proficiency in
thwarting the public acceptance of laissez faire economic theories. And that is aided by
the establishment of an intellectual oligarchy, with which academes shield themselves from
the embarrassment of repeated refutation. When the entirety of the peers with which
professors collaborate share identical views, regardless of their historical validity,
academic inquiry becomes institutional advocacy instead.
Such is the current situation when the
White House Council of Economic Advisors are those plucked from academia who had most
loudly shouted the praises of the president's most favored vote-buying redistribution
schemes. When the president utilized those supposed economic studies saying that raising
the minimum wage would not reduce jobs for those at the bottom of the economic ladder he
should have been laughed off the stage. Instead, all that was heard was an acquiescent
"Hmmmmmmm?,"as if the Grand Unified Theory of economics might now be within
reach.
Academics in any other course of study
who touted a notion as contrary to the basic laws of their field would have lost all
credibility and just as soon all public voice. Yet the pair who conducted this study were
paraded as economic heroes to help lobby for passage of the higher minimum wage.
Earlier, when two physicists claimed,
prior to peer review, to have produced cold fusion in the laboratory, and were discovered
to have unrepeatable results, they were both banished to shameful careers as corporate
shills in foreign countries. If a similar standard were observed among the economic elite,
the want ads would soon overflow with pleas for newly opened professorships and we would
reap a good lesson in the economics of overvalued goods.
Reprinted by permission of GeorgiaPolitics.com, a site whose purpose is to facilitate
the Fair Use, dissemination and discussion of politics, philosophy and current events,
both locally and nationally.
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