Will the Twain Ever Meet? Bridging the Gap Between Economics and Politics

• Published date: 01 January 2024
• DOI: http://doi.org/10.1177/00027162241292180
• Author: Alan S. Blinder
• Date: 01 January 2024
• Subject Matter: Policy Translation

ANNALS, AAPSS, 711, January 2024 245

DOI: 10.1177/00027162241292180

Will the Twain

Ever Meet?

Bridging the

Gap Between

Economics and

Politics

By

ALAN S. BLINDER

1292180ANN THE ANNALS OF THE AMERICAN ACADEMYBRIDGING THE GAP BETWEEN ECONOMICS AND POLITICS

research-article2024

There is a huge and harmful gap between two civiliza-

tions: economists and politicos. This article explores

some of the reasons behind that gap and offers sugges-

tions for how we might shrink it. Doing so will neces-

sarily require more change from economists than from

politicos, because politicians are normally the decision-

makers while economists are just advisers. Hence, I

suggest more places where economists should change

their ways. The ideas set forth here are an expansion of

those I set out in the 2023 Daniel Patrick Moynihan

Lecture on Social Science and Public Policy.

Keywords: economic policy; economic advice; poli-

tics; fairness; efficiency; time horizons

“I’ve looked at life from both sides now. . .”

—Joni Mitchell, “Both Sides, Now”

Rebecca “Becky” Blank was a friend to all of us,

and it is an honor for me to participate in hon-

oring her. My subject for this volume was not

chosen randomly. Rather, it reflects and pays

tribute to Becky’s life and career. She was a suc-

cessful academic economist (at Princeton and

Correspondence: blinder@princeton.edu

Alan S. Blinder is Gordon S. Rentschler Memorial

Professor of Economics and Public Affairs at Princeton

University and a columnist for The Wall Street Journal.

He was vice chairman of the Board of Governors of the

Federal Reserve System (1994–1996) and a member of

President Bill Clinton’s original Council of Economic

Advisers (1993–1994).

NOTE: This article expands upon the 2023 Daniel

Patrick Moynihan Lecture on Social Science and Public

Policy, which Dr. Blinder delivered in Washington, DC,

on October 25, 2023, and was subsequently published

in The ANNALS (Blinder 2023). Some paragraphs

match that lecture, but this article is far longer and

contains much material not found in the Moynihan

Lecture.

246 THE ANNALS OF THE AMERICAN ACADEMY

Northwestern), an indefatigable (and again successful) academic administrator

(most notably, as chancellor of the gigantic University of Wisconsin–Madison for

almost nine years), and an extraordinary public servant—on the Council of

Economic Advisers as a senior economist under President George H.W. Bush

and as a member under President Bill Clinton, and then at the Commerce

Department under President Barack Obama. In the latter role, she rose to

become acting secretary for about a year.

All these achievements would be a remarkable legacy for someone who lived

well into their 80s. But as we all know, Becky’s life was cut tragically short, much

too young, just before she was to become the president of Northwestern. Beyond

her impressive professional achievements, Becky was a wonderful wife to Hanns,

mother to Emily, and a dear friend. She was a truly fine person and will be sorely

missed.

I write this article as a member of a minority group of which Becky was a

prominent member: academic economists who have ventured into the world of

real-life policymaking, a place where politics reigns supreme.1 Experiences like

that, which Becky had in abundance, make you look at life from both sides, the

economic and the political. The two views are starkly different.

I begin by dispelling a myth. Perhaps because economists are frequently trot-

ted out in the media to support or oppose policies, perhaps because we have a

Council of Economic Advisers right in the White House, perhaps because the

powerful Federal Reserve is dominated by economists, many people believe that

economists have enormous influence on public policy. The truth is that, outside

of monetary policy, we don’t.2

Over a half century ago, liberal economist Okun (1970, 1), reflecting on his

years advising Presidents Kennedy and Johnson, wrote that “on a number of

issues, a bipartisan majority of the profession would unite on the opposite side

from a bipartisan majority of the Congress.” This statement would remain true

today if one could muster a bipartisan majority in Congress on anything. Five

years later, conservative economist Stigler (1976, 351) wrote that “economists

exert a minor and scarcely detectable influence on the societies in which they

live.” Stigler was no doubt exaggerating to make his point. But he had a point. I

don’t know, but this lack of influence of economists on policy may have been the

only thing on which Okun and Stigler ever agreed.

The situation has not changed much since. About five years ago, I published a

book (Blinder 2018) in which I argued that economic policymaking is dominated

by The Lamppost Theory: that politicians use economists the way a drunk uses a

lamppost—for support, not for illumination. Elaborating, I argued that it’s as if

economists and politicos—by which I mean not only elected politicians, but their

large supporting cast of advisers and message meisters—hail from different civi-

lizations. They speak different languages. They view the world differently. They

employ different criteria for success. They have dramatically different time hori-

zons. They even deploy starkly different forms of logic.

Before I ventured into the real world of policymaking, I viewed “political

logic” as an oxymoron. Isn’t politics fundamentally illogical, sometimes even