Ideas or interests?

It’s an old debate with a nice Keynes quote routinely trotted out:

The ideas of economists and political philosophers, both when they are right and when they are wrong are more powerful than is commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually slaves of some defunct economist.

Are ideas or interests more important in shaping human destiny?  Nature or nurture?  And to quote Woody Allen, is the Atlantic Ocean a better ocean than the Pacific Ocean?.  In any event, they’re both important – ideas and interests. And they’re most important when they operate together. Still it’s always fun when people proffer some piece of evidence which they think shows one thing, and it in fact doesn’t or shows the opposite. Often people will claim that the commonality between parents and children’s IQs (for instance) shows the importance of heritability, when last time I checked, most kids got not just their genes from their parents but also their environment and their upbringing.

I often cavil at economists attributing too crude an interpretation of self interest to people. But here’s a nice illustration of what I mean. In their very interesting article “The Case Against Patents“, Michele Boldrin and David K. Levine offer this:

Patent lawyers play a large role in the political economy of patents. According to Quinn (2011), who is a patent attorney, legal fees for fifi ling a patent run upwards of $7,000 and roughly half are rejected. In 2010, according to the US Patent Office, 244,341 patents were issued, which would imply roughly $3 billion in legal fees per year. Obviously, patent attorneys as a group have a tremendous incentive to see that more patents are issued. This insight helps us understand better the role of the courts and their relatively recent reform. In 1982—lobbied by patent lawyers—Congress passed the Federal Courts Improvement Act, which moved federal patent appeals out of the regular court system to a special court system for dealing with patents. Naturally, many of the judges for this new court were chosen from the ranks of patent attorneys. For example, when a court voted, in a 1994 decision, to expand the scope of patents to software (In re Kuriappan P. Alappat, Edward E. Averill and James G. Larsen 33 F.3d 1526 [ July 29, 1994]), of the six judges who voted in favor, half had previously been patent attorneys, while of the two that voted against, neither had been. The referee of the patent game is biased both materially and ideologically.

But once the patent attorneys become judges they’re no longer patent attorneys, and do not have any direct pecuniary interests in patent lawyering (I’m assuming, perhaps wrongly, both that they retain no further interest in their practices – and that they’re unlikely to go back to their practices). In any event, I generally find that world views offer stronger explanations than interests. As I commented somewhere here, the passion with which economists discuss tariffs for cars doesn’t relate to the 0.1 or so that could be had by cutting (or not cutting) tariffs – depending on what model of reality you subscribe to. It’s a clash of world views. However it’s certainly the case that interests have shaped the world view, though even here, the causation is often quite rich and operating through culture.  Just as economists take in with their training an antagonism to rent seeking (which is normally quite separate from any pecuniary interest of theirs) so patent attorneys become part of a profession and a culture which valorises what they do. And it’s that culture that drives their views – much more than their naked calculation of self-interest – as illustrated by the fact that you remove those incentives – or a large part of them – and the acculturated attitudes remain.

12 thoughts on “Ideas or interests?

  1. It seems to me that the patent attorney example shows that people with strong interests will align their ideas to those interests so it is the interests that drive their bus. I think that is pretty common. The economists might be a special case because they are in the business of ideas. Still, I wonder how often you find that the ideas of economists start to align with the interests of their employers?

    I also recall a survey showing that a large proportion of academic economists were left wing. Ideas and interests I wonder?

    • Pedro is just a troll from Catallaxy, and should be given no more credence as most of the commentators in the threads over there – ie, very little.

      I’ve personally just spent the last couple of days trying to explain to them some fairly basic economics – such as the difference between a cost and a transfer (in the context of a debate about the carbon tax) – and it is evident that few if any of the usual suspects on the Cat have gotten as far as Econ 101, and that those who do actually understand some economics are alas so ideologically driven that they cannot bring themselves to use it properly when it yields points that differ from their simplistic Libertarian nostrums, or contradict “arguments” they have used in support of those nostrums.

  2. So, define mainstream economics as ‘left-wing’, define racial libertarianism as ‘right-wing’ and show most academic economists are ‘left-wing’. How enlightening.

  3. I generally find that world views offer stronger explanations than interests.

    I agree, to a certain extent. People are creatures of habit, and those habits go all the way down to basic cognition. The more someone practices a habits, the more ingrained and intuitive it will become and the harder it will be to break. The more time someone spends thinking (discussing, working, etc) within a world view the more that world view will become ingrained, and will eventually be experienced as a sort of self-evident truth. Any further decisions taken for (or subconsciously biased towards) self-interest would end up being framed within that world view.

  4. D, I agree with your last comment.

    On your first comment, I’m pretty sure that we if we don’t all think that most academics are leftwing, we aren’t talking the same language. Let’s assume that ‘unlikely to vote liberal in a pink fit’ means leftwing, and further, that ‘thinks that being unlikely to vote liberal in a pink fit is a threshold IQ test’ also means leftwing. On that score in Australia I think a comfortable majority of academics would be ‘leftwing’. I suspect that one can transpose for republican and America rather easily, Tory and Britain, UMP and France, etc. A clever person could deduce the existence of a pattern…

  5. Patrick, you need to look at the way the survey is framed and the policies it asks about:

    tariffs, minimum wage laws, income redistribution, socially provided education, interventionist fiscal and monetary policies, OSHA safety regulations, EPA environmental regulations, laws against discrimination, laws against hard drugs and prostitution, and others.

    Being against all of these policies would land someone clearly in the far right-wing libertarian category. However being for all these policies doesn’t land them in the far left-wing communist category. There would have to be questions about not just having minimum wage but specific wage amounts, not just having interventionist monetary policy but nationalising the banks and financial system, not just having regulation but nationalising the oil, gas and mining sector. Of course I’d guess that few economists wouldn’t support such policies because I don’t see many true left-wing economists around.

    History has provided clear evidence that pure left-wing economic theory doesn’t work out all that well. So left-wing politics has had to become more pragmatic and compromising in how it forms economic policies. It’s the politics that has followed the evidence and academics rather than the other way around.

    We’ve yet to have a grand libertarian utopian experiment; all the successful economies in the world are mixed economies to a certain degree. This permits right-wing politics to be far more idealistic on the basis of lofty presumptions of success of pure right-wing economic theory. This political balance doesn’t change the fact that left-wing politics is generally advocating quite centrist economic policies.

    • desi, only a fringe (of the whole population and of economists) want to see a libertarian utopia of the sort you are thinking about, I don’t think Friedman or Hayek would have been in that fringe, even though they are apparent poster boys for the fringe.

      But about half of the items on your list were leftish. My read of that survey, and generally, is that most economists don’t stray too far either side of the center.

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