Richard Epstein: Peak Dishonesty

Richard Epstein: Peak Dishonesty, Econospeak

Epstein is the doyen of libertarian legal theorists. Larry Tisch Professor of law at NYU and a senior fellow at the Hoover Institution, he has vast influence throughout the conservative world, including the White House.

His latest jag is calling for an early end to isolation policies to contain the coronavirus. In a nutshell, his argument is that the virus responsible for this pandemic exhibits a range of toxicities, and that evolutionary forces will naturally and fairly quickly shift this distribution toward milder strains. He claims that happened earlier with HIV, which is now (in his view) no longer much of a threat. He thinks epidemiologists are essentially charlatans, promulgating an approach to modeling viral transmission and severity that ignores his superior understanding.

He was interviewed by Isaac Chotiner of the New Yorker (hat tip: David Dayen), who gave him a hard time about his self-certainty that he is right and all the health professionals are wrong. But that’s not what I want to talk about.

Here is an excerpt from the transcript as published by the New Yorker:

Epstein: ….I do think that the tendency to weaken is there, and I’m willing to bet a great deal of money on it, in the sense that I think that this is right. And I think that the standard models that are put forward by the epidemiologists that have no built-in behavioral response to it—

Chotiner: And you’re not an epidemiologist, correct?

Epstein: No, I’m trained in all of these things. I’ve done a lot of work in these particular areas. And one of the things that is most annoying about this debate is you see all sorts of people putting up expertise on these subjects, but they won’t let anybody question their particular judgment. One of the things you get as a lawyer is a skill of cross-examination. I spent an enormous amount of time over my career teaching medical people about some of this stuff, and their great strengths are procedures and diagnoses in the cases. Their great weakness is understanding general-equilibrium theory.

That last sentence brought back memories.

I was in a small conference with Epstein in Prague back in 1996. We were sitting next to each other on a bus that was taking us from one venue to another. I was interested in how a libertarian like Epstein would react to developments in economics that undermined faith in an invisible hand, so I asked him about two findings in modern general equilibrium theory, the Sonnenschein-Mantel-Debreu analysis of path dependence in out-of-equilibrium adjustment and the complexity-related work on multiple equilibria, basins of attraction, etc. Both essentially say that, even if you accept the efficiency-equals-optimality framework and assume no market failure of any sort, general equilibrium is arbitrary with respect to global efficiency criteria. In other words, the drift of economic theory since the 1970s is: don’t depend on an invisible hand.

So I briefly referenced these developments and asked him how they affected the libertarian argument. His reply was brief: “Who cares about general equilibrium theory any more?”

That’s a direct quote. I didn’t have a recorder handy, but the words were blunt and memorable. Whatever else it communicated, it quickly shut down our conversation.

So now Epstein claims his superior understanding of general equilibrium theory is what elevates him over the public health establishment—as if the public health schools in major universities weren’t packed with economics PhDs. And as if he weren’t willing to dismiss the entire field when confronted with evidence that it doesn’t back him up.