Chris House has a new post arguing that, unlike other sciences, the facts in economics have a well-known conservative bias.
I'll grant that the facts in econ are far less biased toward the liberal position than in evolutionary biology, cosmology, or climate science; after all, those are areas where conservatives have decided to make a point of bucking the scientific consensus. But although it has a grain of truth, I'm not so sure that Chris' general thesis is right. Here's the argument:
In economics it seems like the facts and the analysis have much more of a conservative slant than a liberal one. It really is true that taxing labor income reduces labor supply (a little). It really is true that extending unemployment benefits encourages people to delay looking for a job (a little). It really is true that taxation can reduce employment demand; that excessive business regulation seems to be correlated with reduced levels of business formation; that union concentration has a detrimental effect on industries and on and on. Moreover, the theoretical analysis seems to fit with the observations. Now of course, a liberal’s response to this would normally be “OK, perhaps these effects are there in the data, but the magnitude of the effects is usually pretty small.” That’s often true. It’s certainly true with the minimum wage. At its current level, and I suspect at the proposed new $10.10 level, the effects of the minimum wage on employment will probably be modest. Republicans tend to describe the minimum wage as though it is a “job killer” that could cripple the economy – a description which is completely over the top...Nevertheless, many basic empirical patterns and basic economic ideas have a fairly conservative profile.Do these facts really have a conservative profile?
If you think the liberal position is "Taxes have no detrimental effect on labor supply whatsoever," then sure. But that's quite a bit of a goalpost relocation. Maybe a hardcore Marxist would make such a claim (I don't actually know, since I don't know any hardcore Marxists). But a mainstream American liberal would not. A mainstream American liberal would likely claim that the small efficiency loss from taxation was an acceptable price to pay for the welfare gain of redistribution.
The same goes for most of the other facts Chris cites. Interventionist policies lead to small efficiency losses. That contradicts the (possible) Marxist position that interventionist policies lead to no efficiency loss. But it also contradicts the (very real, commonly stated) American conservative position that the efficiency losses from those policies are very large.
In other words, most of the facts Chris cites seem closer to the beliefs of the American center-left than to the American right. It all depends on where you put the goalpoasts.
In fact, my guess is that it's no accident that the American center-left has a more realistic conception of economic tradeoffs than does the American right. In the late 70s and early 80s, we were probably over-taxed and over-regulated; the economic facts really did have a conservative bias. But that led America to adopt conservative policies in the 80s and 90s. And of course conservative politicians and pundits overreached (as politicians and pundits are wont to do), while the American left moderated its positions. In other words, conservatives moved away from the facts because they could, and liberals moved closer to the facts because they had to.
So basically, it's not 1980 anymore.
But while we're on the subject, let's talk about some other facts that Chris doesn't mention. For example, every rich country I know of educates most of its children through a public school system. Every rich country I know of has a mostly or entirely publicly funded road system. Every rich country I know of has extensive public health and safety regulations. Every rich country I know of has extensive consumer protection laws. Every rich country I know of except the United States has a universal health care system.
Of course, correlation doesn't equal causation, and maybe the government simply butted into all those areas, and education, roads, health, safety, consumer protection, and health care would all be done better by an unregulated private sector. You never know til you try! Maybe we can find a country that is willing to try.
Also, note that every rich country spends at least 30% of its GDP through the government, with most somewhere around 40%. And interestingly, the correlation is the same in the U.S. time-series: as America's GDP has gone up, we have spent progressively more of our GDP through the government.
Now, again, correlation does not equal causation, and perhaps government is not an enabler of societal wealth, or even a reflection of changing tastes, but simply a giant parasite that grows larger with time, and eventually it will kill the host, and our complex civilizations will collapse under the weight of our own hubris. I guess this could be the case; I keep hearing this on web forums. But if so, it's still kind of amazing that the parasite has managed to grow to such a monstrous size without showing any sign of killing the host.
So I feel like there are a lot more facts out there that we might consider when deciding whether liberals or conservatives are closer to the True Way.
But in the end, it's not really true that the facts have a liberal bias. Or a conservative one. That line was a joke. It was a joke making fun of the hubris of conservative overreach during the Bush administration. The truth is that facts don't have any bias at all; they just sit there and exist. It's we who have the biases.
Antonio Fatas and Robert Waldmann offer their thoughts. Basically, they both think that it is economic theory, not economic facts, that has a conservative bias. This makes sense to me, since after all, sociologists tend to lean very strongly to the left, and they are working with many of the same facts that economists are.
Matt Yglesias says basic economics actually has a liberal bias, citing many examples from econ 101.
Chris House responds, addressing the issue of economic performance vs. government size. Again, it really depends on where you put the goalposts. There is some optimal nonzero "amount" of regulation and taxation/spending, and if you go over that you'll hurt your country, but if you go under it you'll hurt your country too. Whether that optimal point is "liberal" or "conservative" seems like it depends on the politics of the day (and of the specific country), not on any eternally fixed ideological spectrum.