Robert Litan on Microeconomists' Contributions
By David Henderson
Robert Litan gives a nice 15-minute speech in which he highlights some of the main contributions that microeconomists have made that have generated, over 30+ years, hundreds of billions (and possibly trillions) of dollars in consumer and producer surplus. (These are my estimates, by the way: he doesn’t give estimates in his talk.)
It’s misleadingly titled “An Economist Walks Into a Bar.”
Of all the stories he tells, the one that I have some connection with professionally is the deregulation of airlines story.
I would have missed this talk had Alex Tabarrok over at marginalrevolution.com not highlighted it. If you want to see some pretty upset people, though, most of whom missed the point, go and look at the comments. The one legitimate complaint in the comments is that Litan attributes Billy Beane’s strategy in the success of the Oakland A’s to economists even though Bill James is not an economist. James probably could have been a good economist, but he’s not.
I was disappointed by this comment from Kent Guida:
Is every marketing innovation to be attributed to some economist? Is that what economics has come to — the desperate attempt to take credit for marketing?
Of course, Litan did not credit economists for “every marketing innovation.” Instead he credited economists for specific innovations: he gave specific examples, named the particular people involved, and told the specific story. Guida doesn’t gainsay any of this.
By the way, speaking of airline deregulation, Tyler Cowen at marginalrevolution.com links to a great explanation, by Amy Cohn, of the cost to airlines of canceling flights. It’s well worth reading.
Note: Bob Litan wrote the article “Regulation” for The Concise Encyclopedia of Economics.