Not So Dumb as Economists, Part 1
. . . Echidne's takedown of Gary Becker is so divine it deserves your attention more:This argument was initially made by Gary Becker, an economist, a very long time ago.** It is not an uncommon argument from conservatives (or from certain types of anti-feminist sites.) That does not mean that it shouldn't be discussed. So let's do that by looking at what is unrealistic about the specific conclusions....It is a rare and delightful moment when someone looks seriously at an economic model. Strangely, when you examine the social premises of the mathematics—returning economics to its beleaguered claim to being a social science, as it were—it starts to be clearly why people believe economists are the problem, not the solution. It's progress to see a blogger destroy an economist this thoroughly.
In [Becker's] first model only owner/managers have a dislike towards workers from a particular group. That, my friends, is the model from which the above conclusion comes, though even then it would only work to eradicate discrimination from the whole industry if the industry was essentially a competitive one. If the industry is not sufficiently competitive, the bigoted owner/managers can hang on and practice discrimination....
Becker argues that if the only problem we have consists of some bigoted owner/managers, while everyone else is just so sweet, sufficiently well-lubricated markets can get rid of those nasty bigots, always assuming that everybody knows everything relevant about everyone else.
There are no misconceptions in the model. Even the bigoted owner/managers of a pizza parlor, say, know that Joe and Jane are equally good pizza-bakers. They just hate Jane and are willing to hire her only if they can get her for less money.
This cannot last if we can find at least [one] non-bigoted nice owner/manager.
That's the background of the old chestnut. Becker, having become immersed in the imaginary world of his simple model, concluded that competitive industries would never exhibit any long-run sex or race discrimination. Only oligopolies or monopolies could survive with at least some bigoted owner/managers. [emphases mine; hers varied]
Wednesday, June 22, 2011
Tip o' the hat to Ken Houghton at Angry Bear for this quick and simple dismantling of a prevailing neoliberal shock doctrine "model." Becker is, as related by his profile in Wikipedia, "a professor of economics, sociology at the University of Chicago and a professor at the Booth School of Business. He was awarded the Nobel Memorial Prize in Economic Sciences in 1992, and received the United States' Presidential Medal of Freedom in 2007." Becker blogs with U.S. Federal Judge Richard Posner - one of the most damaging ideologues in the world - and is noted "for his staunch defense of the consequences of neoliberalism in Latin America."
Posted by Tony Wikrent at 9:03 AM