Everyone Believes Economists Are On Their Side.

Here’s how they really feel. This is from a survey in 2003. Issues are ranked by % agreement. Economists were given a list of statements and asked whether they agreed or disagreed.

  1. Flexible and floating exchange rates offer an effective international monetary arrangements. 95%

  • Tariffs and import quotas usually reduce the general welfare of society. 94%

  • Pollution taxes or marketable pollution permits are a more economically efficient approach to pollution control than emission standards. 94%

  • A ceiling on rents reduces the quantity and quality of housing available. 93%

  • The U.S. trade deficit is not primarily due to nontariff trade barriers erected by other countries. 91%

  • If the federal budget is to be balanced, it should be done over the course of the business cycle rather than yearly. 90%

  • Fiscal policy has a significant stimulative impact on a less-than-fully employed economy. 86%

  • An appropriately designed fiscal policy can increase the long-run rate of capital formation. 85%

  • Cash payments increase the welfare of recipients to a greater degree than do transfers in kind of equal cash value. 84%

  • Surpluses in the federal budget should be used to retire the national debt. 83%

  • The redistribution of income in the United States is a legitimate role for government. 83%

  • Inflation is caused primarily by too much growth in the money supply. 83%

  • The Earned Income Tax Credit should be expanded. 80%

  • A large federal deficit has an adverse effect on the economy. 80%

  • Tax policy does not have a significant impact on the likelihood that a family unit will remain in tact. 76%

  • Welfare reforms that place time limits on public assistance have increased the general well-being of society. 76%

  • The increasing inequality in the distribution of income in the United States is not due primarily to the benefits and pressures of the global economy. 75%

  • Wages and price controls are not a useful policy option in the control of inflation. 74%

  • In the movement from a nonmarket to a market economy, it is important that the ownership of productive resources be privatized at the onset. 74%

  • Minimum wages increase unemployment among young and unskilled workers. 73%

  • Antitrust laws should be enforced vigorously to reduce monopoly power from its current level. 73%

  • Economic evidence suggests there are too many resources devoted to American agriculture. 72%

  • The Federal Reserve should focus on a low rate of inflation, rather than other possible goals, such as employment or economics growth. 72%

  • Management of the business cycle should be left to the Federal Reserve; activist fiscal policy should be avoided. 72%

  • The distribution of income in the United States should be more equal. 68%

  • Lower marginal tax rates reduce leisure and increase work effort. 68%

The only one I disagree with is #9. This statement is undoubtedly based on a theoretical shift in economics in the 1930s, when economists began to equate utility (an individual’s well-being) with the satisfaction of his or her preferences (undertaken to simplify economic models). This theory was further simplified by Paul Samuelson’s revealed preference theory, which equated choices with preferences and preferences with utility. Under this theory, unconstrained choices make everyone better off. But, there are good reasons to question the foundational assumptions of this reasoning.

The other statements are, in my view, true, though many of them need to be qualified.

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