The Devil Went Down to Wall Street

A little over a year ago I wrote a review of Michael Lind’s Hell to Pay: How the Suppression of Wages is Destroying America. The review, “The Devil Went Down to Wall Street”, was published at Liberty Fund’s excellent Law & Liberty. It is available online at the Law & Liberty website.

There is no shortage of half-baked critiques of mainstream economics, but Lind’s is rhetorically seductive, particularly to the populist elements of the American right. We’ll be seeing more arguments like the ones presented by Lind in the years ahead along with attempts to devalue and dismiss the insights of economists:

The bombastic tone, rhetorical fuzziness, cherry-picking, and uncharitable readings of Lind’s opponents’ political, ideological, and scientific ideas are consistent throughout. He dismisses mainstream economic explanations of how wages are determined as “The Big Lie” while casually acknowledging that “obviously there is some relationship between skills and pay.” In place of the consensus of labor economists, he posits a “worker power theory of wage determination” which he grounds in the thought of Adam Smith, John Stuart Mill, and Alfred Marshall. Here Lind’s sleight of hand involves juxtaposing contemporary perfect competition models against the observations of the real-world economy made by classical and neoclassical economists. What is omitted is the fact that no contemporary labor economist would dream of believing that the real-world American labor market is identical to models of perfect competition, nor would they contest Smith’s observation that wages are “fixed by the higgling of the market.” To leave readers with the impression that the observations of the classical and neoclassical economists are at odds with the models used today by labor economists is to prey on their ignorance in the hopes of gaining a hollow rhetorical victory against scientific opponents.

Full review available here. Enjoy!