Tuesday, October 12, 2010

Greg Mankiw's reply -- dishonesty or just bad prose?

From Mankiw's follow-up to his NYT editorial:
Aren't you motivated by more than money? Of course. I have never suggested that money is my, or anyone's, sole motivation in choosing a lifestyle.
The phrase "sole motivation in choosing a lifestyle" is going to cause us some problems; it's difficult to rebut this kind of practiced vagueness, but we were talking about the choice to do certain work. If we read choice of lifestyle to mean choice of work, then yes, he did suggest exactly that.

Let's roll the tape:
By contrast, without the tax increases advocated by the Obama administration, the numbers would look quite different. I would face a lower income tax rate, a lower Medicare tax rate, and no deduction phaseout or estate tax. Taking that writing assignment would yield my kids about $2,000. I would have twice the incentive to keep working.
If doubling the money you're paid doubles your incentive, doesn't that suggest that your incentive is solely pecuniary?

1 comment:

  1. I think it's neither dishonesty nor bad prose. Rather, my guess is that Mankiw is trapped within an impoverished theoretical framework and, like many people with economics training, oscillates between pure dollar-based calculations (as you illustrate above) and tautological utility statements along the lines of, People do what they want to do, otherwise they wouldn't do it.

    Mankiw obviously has the technical ability to perform more sophisticated decision calculations, but his class of models is so rigid that he doesn't think of doing so.