As I may have mentioned, I’m in the Netherlands this week, giving a paper at an Ethics and Economics conference in Utrecht. My paper (here) starts out by belabouring some of the issues that were raised by N. Gregory Mankiw’s much-derided attempt to defend the incomes of the top 1% (here). There was a huge amount of criticism piled onto Mankiw in the wake of this, but one of the things I noticed was that few economists challenged the most problematic feature of his argument – namely, that it is based on the zombie idea that paying workers according to their “marginal productivity” is equivalent to paying them the actual product of their labour, and therefore corresponds to some pre-theoretic concept of what they “deserve.” (According to this view, the marginal productivity theory of wages provides the foundations for a moral justification for the distribution of income under capitalism.) This is an argument that was bandied about a lot in the early 20^th century (and given its most spirited defence by John Bates Clark in his 1899 book, on The Distribution of Wealth), and is almost universally regarded as having been defeated.… Continue reading

This is just plain funny:

(this is the front page of the Huffington Post Canada today)

 … Continue reading

This is a long-standing pet peeve of mine. Many people, and most noticeably many journalists, do not seem to have a clear understanding of what hypocrisy is. To keep things simple, let’s go with the everyday definition of hypocrisy as “saying one thing, while doing another.” This is fine, except that it’s important, when accusing people of hypocrisy, to pay careful attention to what they are saying. In particular, it is important to pay careful attention to the distinction between what people would like the general rule to be, and what their preferences over their own actions are, given the existing rules. (Viktor Vanberg and James Buchanan introduced the term “constitutional preferences” and “action preferences” to distinguish the two, which is maybe not the best terminology, but their discussion of the distinction is invaluable.)

Let me give a concrete example. I was reading a little article the other day about Bill Gates’s five favorite books of 2014.… Continue reading

One of the things that I look forward to in The Economist is that they have a little “Canada beat” with usually one article per issue on something that’s been going on here. It’s never something that I don’t already know the details of. What is interesting is just hearing an outsider’s perspective. Sometimes what’s interesting is seeing what people outside the country consider the biggest news story going on here. Often, however, what’s interesting is that they describe events in ways that Canadians never would, because we’re too wrapped up in things, or because our own national discourse is somewhat distorted. (For example, The Economist will typically describe the Liberal Party of Canada as a centre-left party, or even just a left-wing party, because any party that is, on most issues, to the left of the U.K. Labour Party strikes them as appropriately designated “left-wing.” Canadians, by contrast, tend to situate the national political parties by comparing them to one another.)

Anyhow, I got a chuckle this week, when they chose to describe the federal government’s income-splitting proposal in the following terms:

The prime minister, Stephen Harper, defends traditional family values and recently announced tax incentives for women to look after their kids at home.

A while back, Barack Obama made a speech in which he said the following:

There are a lot of wealthy, successful Americans who agree with me—because they want to give something back. They know they didn’t—look, if you’ve been successful, you didn’t get there on your own… If you were successful, somebody along the line gave you some help. There was a great teacher somewhere in your life. Somebody helped to create this unbelievable American system that we have that allowed you to thrive. Somebody invested in roads and bridges. If you’ve got a business—you didn’t build that. Somebody else made that happen.

Here a link to the video for anyone who wants to watch it again (Fox News ran it hundreds of times, and spent literally hours discussing its import). The quote became kind of famous, because the word “that” in the penultimate sentence is ambiguous. If you want to make sense of what Obama said, then the natural reading is that “that” refers to the “roads and bridges” of the previous sentence, making it a truism.… Continue reading