Lest my decoder ring be revoked for the previous post, let me reply to my friend Micah’s post, which trots out what I’d called a “paint-by-numbers” argument I expect my fellow travelers are as bored of hearing as I am: That a defense of (relatively unregulated) markets in this or that case is (profound sigh) so Economics 101. Because, you see, you learn about things like “supply and demand” in intro courses, so they must be terribly crude and misguided notions. Interestingly, people lacking even an Economics 101 background seem to feel few compunctions about deploying this trope.
Now, the perfectly accurate core idea here is that with greater theoretical sophistication, you find plenty of conditions under which the generalizations of the first-pass, stripped-down model don’t hold. (In the pedagogical context, this is probably close to being a definitional truth: There would be little point to developing and teaching a more complex model unless whatever new wrinkles you added yielded some difference from the simpler one.) So every budding young econ student learns first that raising a minimum wage above the market wage will create a disemployment effect, and only later that this doesn’t hold under monopsony conditions, and so on. Demonstrating even genuine market failure, of course, is a far cry from showing that the political process can do better, but it’s surely worth trying to find out when it can be expected to occur, how serious it is, and so on.
What’s annoying about the “Economics 101″ line isn’t (just) that it’s a noxiously condescending way of making such an argument. It’s that quite a lot of the time, it’s a substitute for such an argument. Instead of being a prelude to an elaboration of why the instant case constitutes such an exception, it’s treated as a sufficient dismissal in itself—as though if a more sophisticated model incorporates more exceptions to general economic laws, the ne plus ultra of sophistication must be to assume everything is an exception. But the general rules remain general rules because they’re still generally true, and indeed, are often predictive in circumstances far removed from the idealizations of blackboard models. Even when you really do have an econ 201 exemption to an econ 101 rule, it’s still poor form to be too supercilious about advancing it. After all, your interlocutor might have an econ 301 riposte.
Addendum: I should clarify that most of this is a response to the “econ 101″ trope in all its multifarious incarnations, not an attack on Micah, who is a fine human being.