November 10th, 2011
in Op Ed
by Guest Author Dan Kervick
This was a comment at New Economic Perspectives on an article by Stephanie Kelton, which was posted yesterday on this blog.
I don't read Mankiw's blog, but have come across several of his op-eds and interviews over the years. I think the role of a person like Mankiw at an institution like Harvard is to take all of those eager young Harvard beavers by the fur, right in their Freshman year, and deliver to them this message:
Follow up:"Dear students,
After you leave here, you may find yourself making a lot of money. After all, you will be a Harvard graduate, and most Harvard graduates make a lot of money. You may ask yourself, 'Should I really be paid so much?' And my answer to you right now is, "Yes! Don't feel guilty about it! You deserve the money because you're smarter than everyone else, and smart people deserve to make a lot more than not-so-smart people. So go forth and accumulate - guilt free.
" 'But, how much more should I be entitled to make?' you ask. All you can hold in your hands! And then some! My advanced economic insights and knowledge inform me that everything works best in this world when each person greedily grabs all she or he can get. That's the best way to allocate resources and stimulate entrepreneurial creativity. So not only should you not feel guilty about making more money, you should let money and the things it can buy be your very guide in life. The world prospers when each person operates on the principal of greed and personal gain.
"Also, in the world out there beyond these walls, you may hear calls from time to time by poorer and inferior people to use the power of government to tax away some of the money of rich people and use it for various public purposes. You may be tempted by sympathy to respond selflessly to those calls and vote in favor of these redistributive schemes. I am here to tell you: Don't listen to them! Stop up your ears, avert your eyes and ignore them! As I have explained, the rich are necessary. The world needs the rich. By being rich and staying rich you are fulfilling a vital social need. Don't let society down by giving back or declining riches!
"Democratic governments are institutions built by the inferior to clip the wings of the superior. They only muck things up. The only proper role for the government is to use the federal reserve system to adjust the pace and volume of the flow of capital in the financial sector. Everything else just distorts and cripples the dispensing majesty of the invisible hand. If you allow the government to tax any of your money away and use it for things stupider people have voted to do with it, you will only destroy your own incentive to be awesome. And by bright little chickens, you are awesome! So don't listen to those plaintive calls from the poorer and the stupider. Hang onto your cash!
"Now I can hear some of you saying, 'But Professor Mankiw, I really am not that motivated by money. I love learning and knowledge and wisdom. And I care about other people. I really take a lot of joy in developing my talents, expressing my love and delight in life and the using my abilities for the good of others. I don't care that much about the other stuff. After all, I live in a dormitory now, and it's not so bad at all. How much money will I really need - or even want?'
"Ah, my innocent little pups, your good professor hears you and feels compassion for your deluded and conflicted souls. I know some of you were raised by nice and decent people, even modest people. Some of you might have been raised in religious households, where you were filled with silly old stories about the brotherhood of God's creatures and the equal dignity of human beings. You might have been warned about the dangerous allures of the sins of greed and lust and gluttony and coveting. Or you might have been instructed with equally silly secular stories about democracy and the social contract and the duties we have tried to adopt toward one another and the ideals of human equality and fraternity. You might even have discovered that there is some natural seed of human camaraderie inside you that makes selfless dedication to others fun and rewarding, and makes resolutely selfish and gainful concern alienating and dispiriting and empty.
"Well if this is the way you think, I have only one thing to say to you .... Stop it! Are you mad! Haven't I just taught you that money and acquisition and greed make the world go around? We economists have this all worked out, and your attitudes - no matter how wholesome and good they might appear to you - are really very bad and wrong. If you don't change your mental orientation right now, then when you leave this place you will only succeed in gumming up the works of our marvelous American machine of want and avarice with the monkey wrench of inefficient and non-optimizing human emotions - emotions like solidarity, brotherhood and sacrifice. But if brotherhood is what appeals to you, think of all your Harvard brothers and sisters joylessly manning the investment banks of Wall Street right now! Think of the vast expenditure of mathematical energy they have invested in devising systems for collecting rents on the work of other people - stupider people, inferior people, people who didn't go to Harvard. For whom will this essential and important work be done if you don't take up your own appointed places at the pinnacle of greed, and then demand their services? You will ruin everything!"
The above letter has been adapted to an animated video by umkceconomists:
Editor's note: The audio is also a computer generated automaton-like intonation. Some may this detracts from the message. This editor thinks it emphasizes the narrowness of thought being satirized.
Do Harvard’s Economic Students Have a Point? by Stephanie Kelton
Harvard Students Join Occupy Wall Street (GEI News)