Robert's Stochastic thoughts: A Comment on Henry Farrel commenting on Brad DeLong commenting on Henry Farrel commenting on Doug Henwood

Monday, April 25, 2016

A Comment on Henry Farrel commenting on Brad DeLong commenting on Henry Farrel commenting on Doug Henwood

Your post is admirably courteous in tone. I admire but am not able to emulate.

First I think I could make the polite debate between you and Brad even more polite. I didn't get the impression Brad claimed you are a Marxist. I think he suggested that Doug Henwood is a Marxist. Your quoted post explained an objection to left neo-liberals and said it had some merit. I think that perhaps you and Brad can agree that you see some merit in Marx's arguments (in any case he sure does).

However, I have some rude things to say about your writing as quoted by Brad. I don't like the word "theories". I don't think that anyone including left neo-liberals needs a theory of change in order to achieve change. Trees have no theory of photosynthesis, but they grow all the same. You can't really be surprised if an appeal to theory in the context of politics made Brad think of Marx. In any case, your interpretation of Henwood's argument appears to be that there is no convincing explanation of how the policies developed by Yglesias at all will actually improve the world, since they won't be implemented.

" This means that vaguely-leftish versions of neo-liberalism often have weak theories of politics, and in particular of the politics of collective action. I see Doug and others as arguing that successful political change requires large scale organized collective action"

OK now I create straw Doug Henwood who argues that Yglesias (and Brad, C and D Romer, Ezra Klein, Larry Summers, David Cutler, and Jon Gruber) are off in their ivory towers designing policies which will never be implemented because they haven't thought enough about class struggle. The problem with Straw Henwood is too obvious even for a comment on a blog. The neo-liberals I listed have achieved political change (even though I resisted the temptation to include the neoliberal wonks named Barack Obama and Bill Clinton on my list).

It seems to me that your current post is an excellent critique of your earlier post. You explain Summers's theory of change -- he says the key is to get ahead by getting along and influence powerful people. I hazard the guess that this wasn't his first approach (OK I hazard dozens of vivid memories). Technocrats have power (by the definition of the suffice 'crat). They exist. Politicians seek their advice. This is the way political change has occurred (lest I seem to celebratory I think the most influential interaction of an intellectual of sorts and a politician who achieved change occurred when Arthur Laffer sketched a curve on a napkin).

Yglesias clearly has a plan. He argues that good policies are good politics -- that voters re-elect incumbents if things are going well even if the voters opposed incumbents policies when they were implemented. So, he argues, listen to technocrats -- we will tell you how to win re-election -- oh and also serve the people which, of course, is the reason you got into politics in the first place. Look what happened to B Clinton when he listened to Robert Rubin and raised taxes on Robert Rubin et al.

Now I don't know if there is any theory of history such that this plan is anything other than a pipe dream. But I do know that it works. Klein at least, hob nobs with the President of the United States. That president has achieved a lot (even if much less than one might hope). I'd say actual change trumps theories of change.

4 comments:

Blissex said...: «I think the most influential interaction of an intellectual of sorts and a politician who achieved change occurred when Arthur Laffer sketched a curve on a napkin)»

That is I think way, way, way overestimating the influence of that curve on "change". The alert politicians as a rule usually already know which policies their sponsors want, and then just wish to find the eggheads that provide the fancy words to "package" them. The case of that curve seems to me pretty obvious: the policy had already been decided well before A Laffer picked up the napkin, the curve just provided the fancy words to "package" it.

The rare cases when politicians need the eggheads as advisers and are can be influenced by them are for the implementation of policies already decided, or the even rarer case where the sponsors are not sure which policy benefits them most, or the even rarer cases where the sponsors don't care which policy is adopted, or disagree among themselves.

«theory of change -- he says the key is to get ahead by getting along and influence powerful people.»

That usually does not result in eggheads changing the decisions already made by sponsors as to which policies benefit them most (the «influence powerful people» side), but usually results in the eggheads endorsing the policies that have already been decided (the «getting along ... powerful people» side), no matter the initial intentions of those eggheads. The change that theory describes is usually not a change in policy because of the egghead, but a change in the egghead (from wannabe adviser to actual salesman) because of the policy.

The «powerful people» as a rule don't look up to eggheads as inspirational "philosopher kings", but look coolly at them as useful tools.

It is easy to gauge when eggheads sell public relations "packaging" services: look at their pay, now or later when they collect on the gratitude of the sponsors they endorsed.

Sponsors pay fabulously only "profit centre" people, people who are "rainmakers": people who boost "sales" of policies or products. They do pay well, but never fabulously, mere advisers.

People who become board directors or managing directors or get $1,200/hour "compensation" are rarely if ever mere advice eggheads, never mind influencers: they are paid massively only as recognized advocates for the "sell side".; 8:35 PM
Blissex said...: On the Laffer curve:
«the policy had already been decided well before A Laffer picked up the napkin,»

The policy of cutting taxes and disregarding the resulting deficits had been decided before, but if one wants an example of a rare case of a change in *politics* (not *policy*) advocated by an egghead, that is one of the few available, and it was done by J Wanniski, not A Laffer, in spring 1976, as well remembered here by B Bartlett:

http://economix.blogs.nytimes.com/2012/03/20/the-origin-of-modern-republican-fiscal-policy/
«Republicans didn’t immediately embrace the two-Santa theory, but began to after Ronald Reagan’s victory in 1980, when he ran mainly in favor of a big tax cut, with far less emphasis on deficit reduction.»

About which W Kristol commented:

http://books.google.com/books?id=S2nUuTagIw8C
«I was not certain of its economic merits but quickly saw its political possibilities. To refocus Republican conservative thought on the economics of growth rather than simply on the economics of stability seemed to me very promising.»

BTW the referenced article on the "Mundell-Laffer hypothesis" from early 1975 is really, really amazing read today.

BTW the curve was "invented" by J Wannitski in a 1978 article where he mentioned a 1974 dinner with A Laffer, D Rumsfeld, R Cheney.

Interesting timeline:

mid 1962: J Kennedy says "eventually more revenue" when talking about a tax cut policy.
mid 1963: J Kennedy continues to argue that "A tax cut means higher family income and higher business profits and a balanced federal budget. [ ... ] as the national income grows, the federal government will ultimately end up with more revenues.".
1969: H Stein publishes "Fiscal revolution in America" reporting increases in revenue after tax cuts in the 1920s.
mid 1974: Dinner with J Wanniski, A Laffer, D Rumsfeld, R Cheney.
late 1974: J Wanniski article on cutting taxes in 1974.
early 1975: J Wanniski article on Mundell-Laffer hypothesis in Public Interest.
early 1976: J Wanniski article on Two-Santas in the National Observer.
1978: J Wanniski article on the curve in Public Interest.; 9:26 PM
Robert said...: The massive tax cuts approach was fairly new in 1980. It had not been the policy advocated by most Republicans until then. I followed politics back then and I remember.

You might know that the rich always were working for massive tax cuts. But they weren't.

cutting to 70% and to 40% are quite different. Notably, Bernie Sanders doesn't propose reversing the Kennedy cuts.

In my argument, the powerful people are elected officials. I believe they are not instruments of class interest. I think they aim to win re-election (and also care about improving the world -- one can over do even cynicism about politicians). I think that pleasing the donor class is not a good strategy for a President seeking re-election. I think that all incumbent presidents can raise enough money for their campaign that doubling it matters little. I think they key to winning re-election is obtaining peace (if possible and for the USA it has been since 1945) low undemployment, moderate inflation and positive real wage growth. I think that if David Koch and Paul Krugman call, the smart President who knows how to win elections should find out what advice Krugman has first (not that it's hard).

Notice that, while I said one can be too cynical, I am being 100% cynical here. I am discussing how a President can get what he or she wants most (re-election being priority 1 2 and 3).

Now rich people and lobbyists have more ways to influence congress. Senators and especially representatives don't find it easy to raise enough campaign funds that more funds matter little. Congressional aids often become lobbyists -- to a certain extent aids are to lobbyists as medical resdidents are to practicing physicians. Even congress people cash in .

But the story about how the system is totally 100% bought and paid for is exaggerated. The claim that even cynical politicians want voters to be pleased is sensible and corresponds to the data.

In any case, the proof of the pudding is in the eating. Marxists and Weberians with their theories of change, haven't achieved much change in the USA. Wonks have actual influence. The evidence is that their proposals have become policy. You can prove that this can't possibly happen, but it has happened.; 12:44 PM
Anonymous said...: "Marxists and Weberians with their theories of change, haven't achieved much change in the USA. Wonks have actual influence. The evidence is that their proposals have become policy."

are we characterizing policy set between 2001-2008 as determined by "wonks"?; 11:15 PM