Mystery at Harvard

Our story of the week concerns neither the Group of 20 meeting at Cannes, nor the Greek drama unfolding at Athens, nor the anonymous charges of sexual harassment against Herman Cain, nor even the prospect of a return to prison by Miss Lohan. Rather it turns out to be the mystery that has erupted at Harvard. It came into focus in the wake of the protest that took place Wednesday, when students of Professor Greg Mankiw walked out of his famous Economics 10 class because, in their reckoning, the professor, a former adviser to President George W. Bush, pays too much attention to Adam Smith and not enough to John Maynard Keynes and, in any event, fails to deal with the problem of the exploding inequality of incomes.

It’s not every day, after all, that student protests erupt over such abstruse ideas. Usually it’s the inedibility of the food in the central kitchen or the war in Vietnam. Neither is it every day that the Harvard Crimson fetches up on the conservative side of a question. The headline over the editorial in the undergraduate daily was “Stay in School.” The editorial — which could have run in the Wall Street Journal — argued that “protesting a class’s ideology damages free academic discourse.” The editors of the Crimson even acknowledge that Mr. Mankiw has conservative views. But they mock those who walked out of Mr. Mankiw’s class for trying to link their cause to the “Occupy” movement and accuse them showing “ignorance” and “lack of self-awareness.”

Mr. Mankiw himself covered the contretemps on his blog with his typical equanimity and good cheer. He posted links to the protestors’ statement and to the coverage in the Crimson. He also linked an interview he gave to National Public Radio. The thing that struck us in the interview was that Mr. Mankiw acknowledged a key point of the protestors. “Do you accept that it’s a problem, the gap between rich and poor?” he was asked. “Oh, there is no question that the gap between rich and poor has risen substantially,” Mr. Mankiew replied. “It’s been a long-term trend since the 1970s.” He brushed aside questions from the national radio interviewer in respect of whether the problem could be addressed with tax policy, noting that inequalities were showing up in pre-tax income. He kept returning to the long-term nature of a trend that began in the 1970s.

But NPR and he left open the mystery of what in the dickens could have happened in the 1970s to ignite this vast divergence of incomes and set off the convulsions that we are witnessing today. It’s just a humdinger of a mystery. The only thing that really happened in the 1970s, after all, was that, at the start of the 1970s, President Nixon closed the gold window and took America — indeed, the world — off the international gold exchange standard and opened the era of fiat money, declaring, “We are all Keynesians now.” Could the end of the gold standard and the introduction of fiat money possibly have had the effect of these vast divergences in incomes? It’s just a mystery, worthy of a Harvard study or a series on NPR. Or maybe the protesters should do some independent research of their own and see if they can get to the bottom of it.