“Why do so many intellectuals lean politically to the left?” CEI President Fred Smith has written extensively on that question. In today’s Wall Street Journal, Harvard economics professor Robert Barro makes a contribution to this conversation. Focusing on the ongoing austerity vs. stimulus debate, he remarks upon the persistence of Keynesian policy prescriptions, despite their sorry history.
Despite the lack of evidence, it is remarkable how much allegiance the Keynesian approach receives from policy makers and economists. I think it’s because the Keynesian model addresses important macroeconomic policy issues and is pedagogically beautiful, no doubt reflecting the genius of Keynes. The basic model — government steps in to spend when others won’t — can be presented readily to one’s mother, who is then likely to buy the conclusions.
Also likely to buy the conclusions are politicians seeking scientific-sounding schemes to engineer the economy. That helps to perpetuate the fatal conceit — among intellectuals that they could plan society and among politicians that they could effectively implement those plans. Thus, as Fred noted in 2010, “Intellectuals benefit psychologically and economically from the growth of the state — statism becomes the class interest of intellectuals!”
F. A. Hayek famously said that, “the curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” It’s no wonder that task is so difficult both political and academic elites find expansion of the state in their class interest.
Madison, Wisconsin’s Killdozer came closer to the truth than they probably realized when they chose the title of the first album.
For more on Hayek and the fatal conceit, see Fred’s recent article in Economic Affairs.