Russ Roberts on Motivations for Belief
Pardon me for coming late to this discussion. I’ve been sitting on airplanes this week but am now back.
Russ Roberts recently wrote:
The evidence for the Keynesian worldview is very mixed. Most economists come down in favor or against it because of their prior ideological beliefs. Krugman is a Keynesian because he wants bigger government. I’m an anti-Keynesian because I want smaller government. Both of us can find evidence for our worldviews. Whose evidence is better? I’m not sure it’s a meaningful question. My empirical points about Keynesianism won’t convince Krugman. His points don’t convince me. I am not saying that we will never get any kind of decisive evidence on the question. I’m saying it sure isn’t here now. [bold added]
I must admit I was shocked by the statement in bold. One person both Russ and I admired strongly is Milton Friedman. Milton was a Keynesian throughout the last half of the 1930s and through most, if not all, of the 1940s. After I had expressed disappointment, in my review of Two Lucky People, that Milton had not identified how he had shifted, I spoke to him at a Hoover event. He told me that there had been nothing close to a “Saul on the road to Damascus” moment. He said it was so gradual that he couldn’t identify the change. Milton was someone who came to his views on Keynesianism from the evidence, not from ideology. The reason I’m an anti-Keynesian is not that I want smaller government. The reasons I’m anti-Keynesian, to the extent I am [I not totally anti-Keynesian], are that (1) I find most of the arguments unpersuasive and (2) the strongest evidence tends to go against the Keynesians. On (2), see my study of the post-World War II U.S. economy.
Moreover, not that it’s common, but one can be a libertarian or conservative Keynesian. Alan Reynolds, who is not a Keynesian, once tersely expressed to me how that could be: “When you want to increase aggregate demand, cut taxes; when you want to decrease aggregate demand, cut government spending.”
I think that when we choose a particular theory based on our ideology, we are in trouble. Of course, our ideology will influence us to be relatively closed or relatively open to various theories. We economists are human, after all, with all the weaknesses humans have. But we should, like humans generally, try to overcome our weaknesses.