The Conscience of Paul Krugman
Like him or not, Paul Krugman is an economic theorist of distinction, a winner of the John Bates Clark Medal, and often rumored to be in the running for the Nobel Prize. It is disappointing, then, that Conscience of a Liberal contains virtually no economic theory. Instead, the book consists of crude propaganda for a "soak-the-rich" policy.
We should institute massively progressive taxes. Doing this will accomplish two goals at once. First, the nefarious super-rich will suffer a severe blow: we will be able more closely to approach the egalitarian middle-class society that Krugman fondly remembers from his youth. Further, we can use the money mulcted from the rich to finance universal health insurance. FULL ARTICLE
Comments (28)
whilst krugman is wrong with his diagnosis and his cure, i think he's fairly accurate in describing the symptoms of the american malaise (and that of all western, social democracies).
multiple bubbles in all asset classes have given rise to a class of weathy, the likes of which are new to modern times. the poor have had their lot improve, but it's hard to imagine that the rich would have done anywhere near as well without the vast boost that inflation has given to their assets.
i don't think it's un-austrian to note the dangerous social tension that a wealth gap not strictly a product of merit can create.
monetary reform could put all citizens on an equal footing. unfortunately, we'll get fiscal punishment instead.
Published: February 20, 2008 9:13 AM
The truth is, by definition, "civil".
Paul Krugman is a liar - Ronald Reagan did not play on the racism of Southerners or anyowe else. Reagan did not have a racist bone in his body.
As for the claim that Southerners voted against their economic interest - that is Professor Krugman's opinion. And, as Paul Krugman has never shown much sign of knowledge of economics, it is an opinion without weight.
The claim that the United States was a Welfare State in the 1950's is an odd one. However, if Professor Krugman wishes to return government spending on health, education and welfare programs to the level it was in the 1950's (either in money terms or as a percentage of the economy) this would be a step in the right direction.
The contrast between Senator Taft and Eisenhower is overblown. Senator Taft was in favour of many government programs (in housing and so on). Senator Bricker (spelling alert) was rather more hardline that either Senator Taft or Eisenhower on domestic spending.
Published: February 20, 2008 9:16 AM
WOW, I feel a whole lot better about the presidency of Ronald Regean after reading this article about Krugmans feelings about this man with super-human abilities loaded with racial hatred. Of which he has neither!!!!
And all along I thought it was that Carter and Mondale were just dorks.
I was losing my opinion of RR as this web site has written several dozen articles none of which are even mostly positive.
But if Krugman hates him then he can't be bad.
Published: February 20, 2008 9:23 AM
It's the little argumentative gems I search for:
"if one thinks that people are unlikely voluntarily to donate to charity to help the poor, why is it assumed that they will support compulsory taxation for the same purpose?"
And gladly receive.
Published: February 20, 2008 9:47 AM
guys like krugman and JK Galbraith are the ones most readily foisted on the public as economists. it's similar to how the neo cons errant books, columns, and websites are the first ones oten recommended for those interested in foreign policy.
Published: February 20, 2008 9:52 AM
David,
"Like him or not, Paul Krugman is an economic theorist of distinction".
I'm completely miffed by this statement. Can you give some specific examples that support this belief?
Currently, I'm not convinced the man would receive a passing grade on the oral exam at Mises University.
Published: February 20, 2008 10:08 AM
Most of the people I have ever met prefer to believe lies if they think it will benefit themselves. People are easily seduced in to using the power of government to take from their neighbors because they like getting something they didn't earn. It's not that anyone is foolish or stupid; on the contrary, they are quite rational but very selfish.
Published: February 20, 2008 10:10 AM
The consciense of a "liberal"?
I take it that this book has no pages.
Published: February 20, 2008 10:17 AM
Most of the people I have ever met prefer to believe lies if they think it will benefit themselves. People are easily seduced in to using the power of government to take from their neighbors because they like getting something they didn't earn. It's not that anyone is foolish or stupid; on the contrary, they are quite rational but very selfish.
I agree fully, and believe this is the reason that voters in the US are well past the point of electing politicians that will reduce the size and scope of the Homeland government. (The very fact that the term "Homeland" has any meaning or use today is just about reason enough to start looking for a house in Canada or Mexico.)
Reagan was the last president elected on the rhetoric of smaller government, and is touted today as though he actually accomplished anything in that regard, when in fact the government grew tremendously during the 1980s.
When propaganda is that successful, it is essentially impossible that limited government will be achieved by electoral means.
I never thought I would say this, but I long for the days of Clinton -- when nothing of note was accomplished. Given this trend, I predict that President McCain will prove to have an itchier trigger-finger than Bush II, and given McCain's eagerness to stifle citizens' disagreements with him, will be even more likely than Bush to direct his ire toward those of us within the Homeland.
Published: February 20, 2008 11:46 AM
Essentially, Krugman argues that we follow the Europeans. We all know what an economic powerhouse Europe is, with its double digit unemployment and exploding government debt. The poor in France are so elated that they regularly celebrate with bon fires made from cars.
Published: February 20, 2008 12:32 PM
if one thinks that people are unlikely voluntarily to donate to charity to help the poor, why is it assumed that they will support compulsory taxation for the same purpose?
It's quite simple: if I support voluntary charity, that means I have to pitch in (which I do). With compulsory taxation, I can make "the rich" (somebody else) pay.
That is what liberal politics is all about: do whatever I think you ought to do to save the world, and make somebody else foot the bill.
Essentially, Krugman argues that we follow the Europeans. We all know what an economic powerhouse Europe is, with its double digit unemployment and exploding government debt. The poor in France are so elated that they regularly celebrate with bon fires made from cars. ~fundamentalist
LOL!!! Funny,and very true. You should post that comment on a liberal blog, preferably one with a good number of viewers. It will make the leftists rethink their views, or at least humble their pretenses of being motivated by conscience.
On a more positive note, have you ever heard of Pacific Garden Mission? It is a rescue mission that spreads Christianity and rehabilitates the homeless and criminals--the least of these, as Jesus put it. They have a radio show that dramatizes their life stories and conversions. All considered, PGM is far more effective than any of the government's poor relief, criminal rehabilitation, or public awareness campaigns. Check them out! http://pgm.org
Published: February 20, 2008 1:57 PM
The problem with universal health care (i.e. gov't sponsored) is the tendency of people to "milk" the system. Take a look:
Two million 'wrongly get benefit'
http://news.bbc.co.uk/2/hi/uk_news/politics/7223687.stm
Bid to tackle 'sick-note culture'
http://news.bbc.co.uk/2/hi/health/7253577.stm
Published: February 20, 2008 2:08 PM
Ron Brown, Krugman is actually a fair economist in certain issues. See his Pop Internationalism and The Self-Organizing Economy.
Fundamentalist, you could not have said it better. Americans, and even the many wealthy Europeans that believe their system is so fantastic, often turn a blind eye to the giant shit hole that is the mainstream European economy.
David, I don't think Mises ever rejected empirical examination in his economics. He did not find most mathematics to be sufficient, however, I believe he found great importance in empiricism, as Menger did.
Published: February 20, 2008 2:47 PM
The problem with universal health care (i.e. gov't sponsored) is the tendency of people to "milk" the system.
Not exactly. The problem with stat-run health care is the fact that providers have no means of making decisions about what kind of care to give, how much different kinds of care are worth, etc.
In a private system, the market prices for goods and services will tell providers how many employees to hire, what level of training is needed for those employees, how much they can afford to pay them, how many buildings to build, how much equipment to buy, etc.
In a state-run system, there is NO WAY for providers of health care to make these calculations. Even if they wanted to, they have no information on which to base these economic decisions.
So, instead, they make these decisions based on other criteria. Most often those alternate criteria end up being a combination of (a) their own administrative convenience and (b) political pressure.
Published: February 20, 2008 3:06 PM
Fephisto,
Taxation allows groups to force other groups to pay for things they would like to have. For example, many economists would likely say charity is a public good, so one group can force another to pay for charity and enjoy the benefits (which in our case seems to be smugness) of it. For this reason, I don't think its necessarily true that in the absence of government we'd have as much 'charitable' spending, simply because people are less likely to be generous with their own money as they are other people's (i.e., they 'free-ride' off of an out-voted minority).
Published: February 20, 2008 3:42 PM
Niccolo, what Gordon is referring to is the fact that Mises held that empirical facts (e.g. a rise in consumption followed by a rise in a good's price) cannot disprove, on its own, an economic theorem (in this case the law of demand.) I don't think Mises' Kantian framework can do the notion justice though.
Published: February 20, 2008 6:10 PM
For this reason, I don't think its necessarily true that in the absence of government we'd have as much 'charitable' spending, simply because people are less likely to be generous with their own money as they are other people's
That may be true, Grant, but as a private endeavor, charity shouldn't need as much money as government, because it can spend it more effectively.
And if other restrictions and regulations on competitiveness are also minimized, more people would be better able to take care of themselves, so that fewer people would need charity in the first place, or would need it for a lesser amount of time.
Published: February 20, 2008 8:08 PM
An excellent article. Summarily debunks the arguments so typical of economists like Krugman. I'm interested in the health care part of piece. Especially -
"The United States spends almost twice as much on health care per person as Canada, France, and Germany, almost two and a half times as much as Britain — yet our life expectancy is at the bottom of the pack"
Are there any explanations to this? It's quite striking. Krugman's attempt to suggest that this proves the efficacy of socialised medicine is rightly pointed out as a non-sequitur. However I think a more ample discussion is required.
I would like see where the statistics came from. Also, cost comparison data for Australia would be brilliant.
A common left-wing retort in my country is that "we don't want to move in the direction of an 'American-style' health care system". This can be translated as: "Don't question my spending/regulating scheme" or "My experts know better than your experts" It's odd considering the realities of intervention in the USA.
Sometimes I feel that health economics doesn't get hardly enough treatment on mises.org which is a pity because the issue fills the political news. I don't know of a powerful politician in the world that doesn't claim that he is for "better" government-provided health care.
Does anybody suggest particular Austrian reading material on the subject.
Published: February 20, 2008 11:57 PM
Reading Krugman is a lot like trying to read Keynes -such a pain; both are incapable of anchoring their arguments on consistent theory. The two also have something else in common - both are what I'd call statist Intellectual Opportunists. So, Krugman's position on Iraq is just, well, "krugman".
Published: February 21, 2008 2:13 AM
@Grant:
Sans the argument that could occur over 'crowding out' charity, I'm looking at this from the view of rights violations. So, from that standpoint, what you're saying only appears to be helping my side of the argument.
Published: February 21, 2008 9:11 AM
useless: "On a more positive note, have you ever heard of Pacific Garden Mission?"
Yes, I've listened to their radio drama for years. Great program!
Published: February 21, 2008 10:31 AM
Niccolo: "Europeans that believe their system is so fantastic, often turn a blind eye to the giant shit hole that is the mainstream European economy..."
That's very true! But I also think they do one more thing: they consider their culture to be morally superior and think that trumps wealth. For example, look at Sarkozy deciding to dump GDP as an economic measure and fishing around for measures that match French values.
Published: February 21, 2008 10:36 AM
Paul Z: "The United States spends almost twice as much on health care per person as Canada, France, and Germany, almost two and a half times as much as Britain — yet our life expectancy is at the bottom of the pack" Are there any explanations to this?"
I've looke into it a little, and it's difficult to analyze because our record keeping and recording methods are so different. Comparing life expectancies across countries is like comparing apples and oranges.
As for health care spending, the differences in costs are easy to explain. In the US, the AMA holds a monopoly on the supply of healthcare, and therefore the pricing. The feds provide almost unlimited demand, so naturally the cost is going to rocket. In Europe, the state controls the supply and the price. Excess demand is controlled by longer wait times.
As for reading material, Arnold Kling over at the Econ Library has a book on healthcare econ. He's not an Austrian, but close.
Published: February 21, 2008 10:45 AM
Paul Z Hartyanszky,
My understanding is that life expectancy statistics are greatly affected by factors oher than the health care system. This article - http://www.city-journal.org/html/17_3_canadian_healthcare.html - outlines some reasons, such as homicide and auto accident (maybe a more effective approach would be to ban cars - JUST KIDDING!).
Published: February 21, 2008 4:12 PM
Krugman is called an economist, but most of his writings and talks are from a modern liberal with very little credibility in the eyes of this economist. It galls me when a person like Krugman hides behind his credentials as an economist to expouse his socialist crap.
Published: February 22, 2008 1:44 PM
It's pretty funny reading a bunch of wannabe Ayn Rand's ragging on Paul Krugman.
So I checked around your "think tank' mission statement.
I particularly like this bit of grossly simplistic dogma about how Ludwig von Mises "proved" (proved, mind you) that
"...government intervention is always destructive, whether through welfare, inflation, taxation, regulation, or war."
So much for your credibility.
Published: February 26, 2008 9:20 PM
Which of these--welfare, inflation, taxation, regulation, or war--do you find most productive?
Published: February 26, 2008 9:50 PM
So saith the obvious troll.
Whenever something isn't disguised and mired in bullshit, it's 'simplistic'.
Read Mises, then come back and comment. Until then, you better put your flameproof suit on, troll.
Published: February 26, 2008 9:52 PM