Robert Solow vs. Greg Mankiw, jousting over inequality. What to a greater extent than could those who relish academic blood sports desire? Their central is inwards t
he "Correspondence" department of the Winter 2014 number of the
Journal of Economic Perspectives. Solow is writing inwards reply to Mankiw's article inwards the Summer 2013 number of JEP, called
"Defending the One Percent." (All articles inwards JEP are freely available too ungated, courtesy of the American Economic Association.) Here's a quick sense of savour of the exchange, to whet your appetite for the rest.
Solow's opening paragraph:
"The cheerful blandness of N. Gregory Mankiw’s “Defending the One Percent” (Summer 2013, pp. 21–34) may divert attending from its occasional unstated premises, dubious assumptions, too omitted facts. I stimulate got room to scream for solely to a few such weaknesses; but the One Percent are pretty skillful at defending themselves, then that whatever assistance they larn from the sidelines deserves scrutiny."
Mankiw's opening paragraph:
"Robert Solow’s scattershot missive of the alphabet offers diverse gripes most my newspaper “Defending the One Percent.” Let me respond, equally blandly too cheerfully equally I can, to his points."
Solow's closing paragraph:
"Sixth, who could hold out against allowing people their “just deserts?” But in that location is that affair of what is “just.” Most serious ethical thinkers distinguish betwixt deservingness too happenstance. Deservingness has to hold out rigorously earned. You create non “deserve” that component of your income that comes from your parents’ wealth or connections or, for that matter, their DNA. You may hold out born just manifestly gorgeous or smart or tall, too those characteristics add together to the marketplace value of your marginal product, but non to your merely deserts. It may hold out impractical to split attempt from happenstance numerically, but that is no argue to confound them, particularly when you lot are thinking about taxation too redistribution. That is why nosotros may wish to temper the air current to the shorn lamb, and allow it blow on the sable coat."
Mankiw's closing paragraph:
"Sixth, too finally, Solow asks, who could hold out against allowing people their “just deserts”? Actually, much of the economic science literature on redistribution takes just that stand, albeit without acknowledging doing so. The criterion model assumes something similar a utilitarian objective component too concludes that the optimal taxation code comes from balancing diminishing marginal utility against the adverse incentive effects of redistribution. In this model, what people deserve plays no exercise inwards the formulation of optimal policy. I conduct maintain alongside Solow that figuring out what people deserve is hard, too I don’t pretend to stimulate got the in conclusion give-and-take on the topic. But if my newspaper gets economists to focus a fleck to a greater extent than on merely deserts when thinking most policy, I volition experience I stimulate got succeeded."
Full disclosure: I've been Managing Editor of the JEP since 1987, then in that location is a distinct possibility that I am prejudiced toward finding the contents of the magazine to hold out highly interesting.
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