Bob Cropf

Greetings

In statistics on January 23, 2009 at 6:27 PM

Welcome students. The readings for next week are Friedman and O’Connor in the Peretz book. Think about how each author approaches the question of the government’s role in the economy. In some ways, both authors view the government as a threat but for different reasons…why?

How would you classify each author based on the categories discussed in class 2 weeks ago (interventionist, nonintervensionist, Marxian)? Why? How would each one view the type of fiscal stimulus package being considered by the Obama administration?

Useful Links
Milton Friedman’s Wikipedia entry
James O’Connor’s Wikipedia entry
Amazon.com’s review of O’Connor’s Fiscal Crisis of the State.
Milton Friedman on Charlie Rose

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  1. Thanks for providing discussion questions to focus on!

  2. Thank you for the discussion questions and for providing a reading reference for each individual class.

  3. I’ve been here.

  4. I was struck by the discussion in class this evening that while economics supposedly models itself on the physical science, much of it seems to be very normative. For example, Friedman doesn’t think the government *should* intervene in the economy. Why? because it creates inefficiencies. Why are inefficiencies bad? Sure, they have a less than positive name, but if they were called something else? To go to Stone, one person’s inefficiency is another person’s job. Isn’t it up to the political/market process to determine if an inefficiency is bad?

    If economics were really to be like the physical sciences, it would concern itself with what are the impacts of this kind of government intervention has this kind of impact on economic activities. Only the technical half of the question the various authors seemed to address. No?

  5. You raise a good point here, Kathleen. This is similar to the one made by Robert Heilbronner in his essay, “The Relevance of Economics to Public Policy.” Economics might be faulted in that while it strives to be like the physical sciences, there doesn’t seem to be the same set of basic assumptions in economics that everyone can agree on, like the Law of Gravity in physics. More specifically, there are things that mainstream economists concur on (e.g., law of supply and demand) but they come to a different set of conclusions regarding the practical effects of these things, at least in the policy arena. That is why you can have economists at the opposite end of the policy spectrum even thought they are analyzing the same data. To some authors, like Friedman, efficiency of the economy is the highest value. For others, like Okun, it is income equity.

  6. I was thinking along the same lines as Kathleen this morning, wondering about the extent to which economic evidence was used to develop and support these theories. I suspect very little, except perhaps from Friedman or O’Connor. It seems more likely that these are observation based, value driven philosophies, not a product of the scientific method. Is there any good evidence for these positions?

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