On his Substack, Bet On It, Bryan Caplan today posted a segment from his newest book, Unbeatable.
The segment is short and so I recommend reading the whole thing.
One key paragraph:
Mainstream economics and free-market economics: Since I’ve long lived in both of these intellectual worlds, I know their inhabitants well. I don’t just know what these two breeds of economists are like now. I know their life stories – or at least their intellectual biographies. Their “neoliberal” reputation notwithstanding, calling mainstream economists “free-market” – or outright “free-market fundamentalists” – is a joke. Few such economists have ever had free-market sympathies. And even though they’ve won a few Nobel prizes, calling free-market economists “mainstream” or even “dominant” in their profession is likewise absurd. Just because your peers cite you doesn’t mean they like you.
This reminded me of something that happened in one of my classes at the Naval Postgraduate School about 20 years ago.
After only my first few years at the Naval Postgraduate School, I took a tack that I hadn’t tried earlier in my teaching. I told the students up front that if we became friends and they invited me to a poker game when the course was over, I would decline because I have the opposite of a poker face. The relevance, I said, was that when I taught, say, the minimum wage, my face would show my upset at politicians who do these things and, more important, my upset at the horrid results. So I owned up the first day to calling my self a small l libertarian. (By the way, the first time I did this, I was shocked when I read my end-of-quarter teacher evaluations. No one commented negatively on my revealing my political bias. To the extent they commented, they said it was refreshing to see someone admit his bias and not put on an act.)
Now to the incident 20 years ago. We were well along in the quarter and I had showed the students why free trade is good for both sides: how rent controls causes shortages and reduces the quantity and quality of housing; why the gasoline lineups their parents experienced were due to price controls on gasoline; how minimum wages priced the least skilled workers out of the job market; and a number of other things.
Remember that my students were military officers who were typically age 28 to 40 and had been around the world. So they had seen a lot of things and were fairly aware politically.
One student said, “Wow, in light of what we’re learning, I bet there aren’t many Democratic economists.”
I answered that I could see why he said that but that the reality was that the ratio of Democratic to Republican and Libertarian economics professors was about 4 to 1.
He was stunned. As I looked around the class, I could see that many of the students were equally stunned. How could this be?
I didn’t have a good explanation. I said that many of them came into economics from math and saw economics as a technical field. They hadn’t gone through Ph.D. programs like mine at UCLA and were involved in typically tiny parts of economics. That’s the best I had. And maybe I’m giving myself too much credit. I know I blamed math but I’m not sure I blamed narrow specialization.
Well, Bryan Caplan nails it. Here’s what he goes on to write:
The biography of a typical mainstream economist starts with a conventional left-wing teenage intellectual from an upper-middle-class home. His parents and school are center-left, but their complacency disturbs him. They pay lip service, while he believes. In college, he discovers economics – and realizes that the world is more complex than he thought. Eventually, the budding economist concludes that a few conventional left-wing views are overstated or mistaken. Support for rent control is a classic example. If you know no economics, rent control sounds like a fine idea: Want the poor to have affordable housing?[i] Then pass a law requiring wealthy landlords to rent at affordable rates. Intro econ highlights rent control’s big negative side effects: shortages, low quality, and dwindling quantity. Politically, though, “a few conventional left-wing views are overstated or mistaken” is normally the end of the line. If you start out as a conventional teenage leftist intellectual, undergraduate economics turns you into a slightly-contrarian twenty-something leftist intellectual.
For most students who fit this profile, admittedly, intellectual curiosity is only a phase. They end up in non-intellectual jobs and turn into their center-left parents. They may even forget that a few conventional left-wing views are overstated or mistaken. The future mainstream economists, however, stay the course. Soon after earning their undergraduate degrees, they continue on to graduate school, where they acquire two new sets of skills.
First, they spend two years grappling with mathematical economic theory. This is demanding material, but too otherworldly to shift grad students’ economic policy views. High theory presents dozens of esoteric ways for markets to fail, but Ph.D. students normally learned all the standard market failures as undergrads. If you’re already deeply worried about imperfect competition, asymmetric information, and externalities, discovering more exotic market failures rarely makes you like markets less. [DRH note: did Bryan mean more?]
Second, unless they become pure theorists, grad students immerse themselves in one or two bodies of ultra-specific empirical research. This immersion occasionally shifts economists’ policy views in their areas of specialization. Yet the maximum effect is small because the volume of research is so massive that most economists end up with no more than a few narrow topics of expertise. In all other areas, mainstream Ph.D. students graduate with virtually the same policy views they held when they started grad school. Minor tweaks aside, that’s where they stay for the rest of their careers. They transition from conventional teenage leftist intellectuals to slightly contrarian twenty-something leftist intellectuals to slightly-contrarian mature leftist intellectuals. Possibly with truly contrarian economic policy views in a few ultra-specific areas they know best. Otherwise, mainstream economists barely connect their life’s work to economic policy. When policy comes up, most take off their researcher hat, and put on their slightly-contrarian left-wing intellectual hat.
At UCLA, by the way, we graduate students had so many ah-hah moments as we learned the material that we started talking among ourselves about this same puzzle. A graduate student who was senior to me, Ted Frech (actually, Harry Edward Frech III) put it well. He said that it almost doesn’t occur to smart economists that there’s a tight connection between economics and the real world. I still remember Ted’s quip: “Paul Samuelson goes home from work and his wife tells him that the price of steak rose by 50 cents a pound; he responds, ‘Shoot the butcher.'”
Postscript: I pointed out where I thought Bryan meant “less,” not “more.” No, he assured me, he meant less. Here’s how he explained it in an email:
My point is that grad school doesn’t make leftist economists more leftist.
READER COMMENTS
Mactoul
May 9 2025 at 9:47pm
Economists, as a profession, are an adjunct to the administrative state. The profession grew with the administrative state.
After all, how many free market economists are needed? But plenty are needed to calculate GDP, inflation index, labor market, trade deficit, optimal tariff, carbon price, and so on to infinity.
The minute control that administrative state imposes does require a legion of economists and naturally these economists are not over-inclined to go against their own interests.
In short, the economists are active agents of the administrative state that merely reflects in their training. It is the fact of being agents that makes their education and training what it is.
Eric Larson
May 10 2025 at 8:44am
They’re a standing army of court intellectuals.
Dylan
May 10 2025 at 5:12am
I read that piece by Caplan with interest, but was surprised at how little it mirrored my own experience in the early 2000s at a midsize state university known for being the most liberal in the state. Yet, you wouldn’t have known that from the econ department, which felt very much in line with the Economist magazine at the time, i.e. socially liberal and fiscally conservative. Free trade was orthodoxy, against rent control obviously, lots of complaints about how government interference in health care was having all sorts of bad consequences. Even in areas where there was a consensus on externalities, the focus was on what was the minimal amount of government intervention that could maintain the power of markets. Cap and trade as opposed to command and control as one example. This was still outside the mainstream in the political realm, but seemed very mainstream in econ.
I only recall one professor that I thought was probably more firmly on the left. He was a bit older than the average age of the department, and was a wonderful teacher of the history of economic thought. But I do remember him approvingly giving the infant industry defense of tariffs and using an example of Japan and fountain pens (I think) as a success story. My other classes were dismissive of tariffs even for infant industries and had gone through the textbook reasons why.
I also had one professor who joined the school towards the end of my degree and had previously taught at one of the military colleges (I can’t recall which one). He seemed to be more conservative than the rest of the department, but was a little in the closet about it. I do recall him referring to Paul Krugman dismissively after he had joined the NYT as a “former economist.”
David Henderson
May 10 2025 at 9:51am
Thanks.
Are you willing to name the college? I would appreciate it.
Dylan
May 10 2025 at 11:40am
Sure. It was Western Washington University.
David Henderson
May 11 2025 at 10:39am
Thanks, Dylan.
Did you have an economics professor named Steve Globerman? I think he was there at the time.
TMC
May 10 2025 at 11:23am
“I do recall him referring to Paul Krugman dismissively after he had joined the NYT as a “former economist.””
Lol. He crept into my mind before you mentioned him when you referred to the Economist as fiscally conservative in the early 2000s. I though for sure either you meant earlier or that you university really needed to update its subscription. Something happened at the turn of the century. Krugman turned into an anti-economist to a point people would quote pre-2000 Krugman to refute post-2000 Krugman, and the Economist went soft socialist.
My favorite Econ Prof story is my professor told us in 1989, after the fall of the USSR, ‘now the last bastion of communism in the world is in the American university’.
Alan Goldhammer
May 10 2025 at 9:57am
It might be nice to know when this change from an equal ratio of conservative/liberal economists took place. David went to grad school in the 1970s (I think this is correct) and there were certainly a lot of followers of Milton Friedman back then. I was an undergrad at UC Santa Barbara in the late 1960s, and this was certainly a very liberal campus from the student’s perspective. There were a lot of conservative faculty at that time. Even the poli sci department where I took my minor was not a hotbed of liberalism. I had some good friends who were econ majors and that was there take on things.
Roger McKinney
May 10 2025 at 10:18am
Great points! Other research I have seen shows that college changes the politics of few students. Most people choose their politics at a young age, too young to know very much, then never change. A few lefties get mugged by reality.
Hayek thought that happens because they want the world to be like a family or their clique where everyone takes care of each other’s. Helmut Schoeck thought it was envy, the power behind socialism.
Because economists thoroughly trashed socialism in the late 19th and early 20th centuries, many socialists took up economics to prove the feasibility of socialism, such as Abba Lerner and Keynes. That’s why mainstream economics is mostly about perfect competition, market failures and macro.
Monte
May 10 2025 at 3:53pm
Beware of economists who wear bowties. It’s a stealth symbol for supply and demand.
Warren Platts
May 10 2025 at 5:56pm
The way I look at it, tariffs are the litmus test, the shibboleth, if you will, to see if you are a mainstream economist or not. Mainstream economists will quibble over stuff like minimum wages and such, but all mainstream economists (at least of the Anglo-American subspecies), whether left or right or libertarian, are allergic to tariffs, even little ones that have a negligible effect on the grand scheme of things. For example, Peter Navarro, the Harvard PhD, used to be a mainstream economist because he used to be against tariffs; now that he’s decided that tariffs can be useful, he’s been banished from the ranks of the mainstream….
steve
May 11 2025 at 6:30pm
Over the years I have corresponded with fair number of economists. (It’s sort of amazing how many will answer if are nice about it.) Of those whom I would characterize as definitely on the left all seemed to believe pretty firmly in markets but more likely to believe that market failures are possible. Of the libertarians I have found that most agree that market failures are possible but few were willing to concede any particular event as a market failure. I would add that this is largely health care economics and there were many fewer health care people on the right or libertarians.
Steve
nobody.really
May 12 2025 at 2:33am
This nails it?
WHY do most economists come from this background? Why don’t teenage intellectuals embrace conservatism? Or if they do, why do they reject the pursuit of economics?
What does this tell us about all the other economists? That they’re similarly limited, but simply carry on with the conservative or libertarian intellectual biases that they entered grad school with? Or that they started with other biases, but then make grand intellectual leaps and pronouncements on topics about which they lack deep intellectual grounding?