Watching economists claim to be amoral is amusing when they so transparently have moral beliefs they refuse to acknowledge.
Valuing unregulated markets over other priorities is a moral philosophy, one that is meaningless since there is no such thing as a completely free market. Claiming you know what the result of a huge national policy like raising the minimum wage based on the extremely limited data of the field is disingenuous, at best.
Krugman is interesting because he appears to have given up on the amorality angle. This does not make him a traitor to the field, this simply acknowledges that the field is not impartial.
The questions that economists should answer in a political context is not "why is regulation bad/good?" but instead "What is the best policy given that my values are x,y,z?"
Adam Smith saw himself as a moral philosophy specialist. He spent way more time and effort on it that economics. He saw economics as an important tangent to moral philosophy.
His most important book in his eyes was "A Theory of Moral Sentiments" not "Wealth of nations."
It's not really amoral views. Take minimum wage. If they genuinely believe that minimum wage increases unemployment. Then they have taken the moral view that less unemployment, is better than better pay for the workers that stay in work. Most people would agree.
The problem is that there is no data that has shown this to be true for the types of minimum wage increases that are commonly considered. I think the actual moral view is that the government should not restrict the freedom of employers and employees to enter into whatever voluntary agreements they want, regardless of the outcome. Most people would disagree.
If you want to toss some bucks my way on a whim, and/or I want to toss some labor your way out of the goodness of my heart, no one objects.
It's when you draw up an employment contract and expect the government to enforce it that, well, the government begins to consider what kinds of contracts it will lend its enforcement to.
But what is the rationale behind suggesting in minimum wage? It's not 'more pay'... it's something like reducing poverty, 'fairness', a moral belief that people should not suffer, etc.
The answer "Laws requiring employers to pay [higher wages, better pensions, healthcare coverage] increases unemployment because regulation has negative unintended consequences" a) is useless to policy makers and b) is a dismissal of the original moral position. It is thus a moral stance in itself. It says "I value freedom of the market more than I value your goals." I don't know if most economists have been manipulated into this role or are willing contributors, but the result is that they are being taken less seriously by society.
Economists are currently in the role of saying that the rising tide of a free market will eventually lift all boats, don't be distracted by the losers... but we seem to be reaching the limits of the effectiveness of this strategy and society seems to be uncomfortable with the casualties.
The question that generally needs answering is: "How can I reduce the negative consequences of free markets and what is the most effective way to compensate the losers?"
Not that I necessarily agree with that position, but saying that minimum wage raises unemployment isn't (necessarily) being dismissive of the moral issues behind minimum wage. It's just saying "it won't work out the way you want".
Stronger: It can be saying "I share your morals, that unemployment is harmful, therefore I oppose your solution, because your solution will do more harm than good (as defined by the morals that we both share)."
It's important to note the difference between short term and long term effects.
Yes, unemployment might increase in the short term, but if cheap workers can't fill a need then people will look for alternatives like increased automation.
For a concrete example, machines can automatically dispense correct change, yet due to low wages this is fairly uncommon.
PS: To make this work we long term we need a minimum income, but that's a side issue.
In the long run, an increase in minimum wage doesn't really raise the standard of living. In the late 1960's, the minimum wage was at it's highest inflation adjusted rate in history. Just a few years after that, as the effect of those wages propagated throughout the economy, we hit our highest non wartime rate of inflation of the 20th century.
> late-1960's, "a few years after that", "non-wartime"
WHOA! Non-wartime! That's some amazing historical revisionism there.
Spiraling energy costs, an expensive war abroad, skyrocketing interest rates, the final decoupling from the gold standard had a lot more to do with inflation than the minimum wage.
Valuing unregulated markets over other priorities is a moral philosophy, one that is meaningless since there is no such thing as a completely free market. Claiming you know what the result of a huge national policy like raising the minimum wage based on the extremely limited data of the field is disingenuous, at best.
Krugman is interesting because he appears to have given up on the amorality angle. This does not make him a traitor to the field, this simply acknowledges that the field is not impartial.
The questions that economists should answer in a political context is not "why is regulation bad/good?" but instead "What is the best policy given that my values are x,y,z?"