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Mankiw too idealistic? How do the right and left differ?

I think Mankiw gets it wrong here. I think Mankiw’s definition of the “right” economists is too idealistic (at least by inside-the-beltway standards.) His description of the “right” is really center, or even center-left. My characterization of the right is below.

Greg Mankiw’s Blog: How do the right and left differ?

How do the right and left differ?
The conclusion of today’s ec 10 lecture:
In today’s lecture, I have discussed a number of reasons that right-leaning and left-leaning economists differ in their policy views, even though they share an intellectual framework for analysis. Here is a summary.

  • * The right sees large deadweight losses associated with taxation and, therefore, is worried about the growth of government as a share in the economy. The left sees smaller elasticities of supply and demand and, therefore, is less worried about the distortionary effect of taxes.
  • * The right sees externalities as an occasional market failure that calls for government intervention, but sees this as relatively rare exception to the general rule that markets lead to efficient allocations. The left sees externalities as more pervasive.
  • * The right sees competition as a pervasive feature of the economy and market power as typically limited both in magnitude and duration. The left sees large corporations with substantial degrees of monopoly power that need to be checked by active antitrust policy.
  • * The right sees people as largely rational, doing the best the can given the constraints they face. The left sees people making systematic errors and believe that it is the government role’s to protect people from their own mistakes.
  • * The right sees government as a terribly inefficient mechanism for allocating resources, subject to special-interest politics at best and rampant corruption at worst. The left sees government as the main institution that can counterbalance the effects of the all-too-powerful marketplace.
  • * There is one last issue that divides the right and the left–perhaps the most important one. That concerns the issue of income distribution. Is the market-based distribution of income fair or unfair, and if unfair, what should the government do about it? That is such a big topic that I will devote the entire next lecture to it.

Here, I think, is a better description of “the right” in Mankiw’s approach.

  • * The right sees taxation as an attack on freedom, and therefore taxes are un-American
  • * The right sees “government failure” as a larger problem than market failure. So even when a market failure exists, government intervention will still make things worse.
  • * The right sees market power as a sign of superior management ability, so attempts to curb monopoly power is punishing success.
  • * The right sees people as fundamentally irrational, and the purpose of the market is to reward those that are more rational.
  • * The right sees the market allocation of resources as optimal in all cases, so, by definition, government intervention makes things worse off.
  • * The right is agnostic about income distribution. Whatever an unfettered market determines is, by definition, “fair”, thus any intervention that impacts the income distribution is unfair.

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