Yves here. Pilkington examines Krugman’s latest dig at heterodox economists.
Pilkington is far from the only one to react. The normally deferential Dean Baker was clearly less than happy. And the post-Keynesian website, A Case for Concerted Action, gave a particularly pointed rejoinder (emphasis original):
Rather than giving many examples of why Krugman is the part of the problem, let me illustrate one example where he pushed very hard on the issue of free trade. It is a lecture paper for Manchester conference on free trade, March 1996 titled Ricardo’s Difficult Idea.
The following quote is clearly a strategy for propaganda:
5. What can be done?
I cannot offer any grand strategy for dealing with the aversion of intellectuals to Ricardo’s difficult idea. No matter what economists do, we can be sure that ten years from now the talk shows and the op-ed pages will still be full of men and women who regard themselves as experts on the global economy, but do not know or want to know about comparative advantage. Still, the diagnosis I have offered here provides some tactical hints:
(i) Take ignorance seriously: I am convinced that many economists, when they try to argue in favor of free trade, make the mistake of overestimating both their opponents and their audience. They cannot believe that famous intellectuals who write and speak often about world trade could be entirely ignorant of the most basic ideas. But they are — and so are their readers. This makes the task of explaining the benefits of trade harder — but it also means that it is remarkably easy to make fools of your opponents, catching them in elementary errors of logic and fact. This is playing dirty, and I advocate it strongly.
(ii) Adopt the stance of rebel: There is nothing that plays worse in our culture than seeming to be the stodgy defender of old ideas, no matter how true those ideas may be. Luckily, at this point the orthodoxy of the academic economists is very much a minority position among intellectuals in general; one can seem to be a courageous maverick, boldly challenging the powers that be, by reciting the contents of a standard textbook. It has worked for me!
(iii) Don’t take simple things for granted: It is crucial, when trying to communicate Ricardo’s idea to a broader audience, to stop and try to put yourself in the position of someone who does not know economics. Arguments must be built from the ground up — don’t assume that people understand why it is reasonable to assume constant employment, or a self-correcting trade balance, or even that similar workers tend to be paid similar wages in different industries.
(iv) Justify modeling: Do not presume, as I did, that people accept and understand the idea that models facilitate understanding. Most intellectuals don’t accept that idea, and must be persuaded or at least put on notice that it is an issue. It is particularly useful to have some clear examples of how “common sense” can be misleading, and a simple model can clarify matters immensely. (My recent favorite involves the “dollarization” of Russia. It is not easy to convince a non-economist that when gangsters hoard $100 bills in Vladivostock, this is a capital outflow from Russia’s point of view — and that it has the same effects on the US economy as if that money was put in a New York bank. But if you can get the point across, you have also taught an object lesson in why economists who think in terms of models have an advantage over people who do economics by catch-phrase). None of this is going to be easy. Ricardo’s idea is truly, madly, deeply difficult. But it is also utterly true, immensely sophisticated — and extremely relevant to the modern world.
Yves again. Philip Pilkington asked me, upon reading that extract, “How the hell DID Krugman become some sort of voice for the left!?” You can see the answer above. “Adopt the stance of the rebel.” Krugman’s credibility as a leftist resides in his position at the New York Times (the organ of the left end of respectable opinion in the US), his early and forceful opposition to the Iraq War, and his continuing attacks on All Things Republican (which if you look closely, as most Naked Capitalism readers do, is merely acting as a loyal bag-carrier for Team Dem, but a lot of people don’t think very hard about the information they consume). And perhaps most important, Krugman has repeatedly called himself a liberal, so he must be a liberal, right?
It’s also instructive to read this section of Krugman’s 2007 obituary of Milton Friedman. Even though Krugman took issue with what he depicted as Friedman’s extremism in his popular works (which Krugman argued contrasted with his more nuanced Serious Economist oeuvre), it was not hard to discern that Krugman nevertheless admired Friedman’s skills as a polemicist. From Krugman’s article in the New York Review of Books:
Why didn’t he exhibit the same restraint in his role as a public intellectual?
The answer, I suspect, is that he got caught up in an essentially political role. Milton Friedman the great economist could and did acknowledge ambiguity. But Milton Friedman the great champion of free markets was expected to preach the true faith, not give voice to doubts. And he ended up playing the role his followers expected. As a result, over time the refreshing iconoclasm of his early career hardened into a rigid defense of what had become the new orthodoxy.
I’ll leave it to readers to chew over that passage.
By Philip Pilkington, a writer and research assistant at Kingston University in London. You can follow him on Twitter @pilkingtonphil. Originally published at Fixing the Economists
Krugman is out with a kind-of-sort-of attack on critics of economics. It’s not surprising because Krugman is a very kind-of-sort-of type of guy in many of his opinions.
The language of his latest piece, however, is somewhat bizarre. He labels heterodox economists ‘Gentiles’, presumably making orthodox economists, what? God’s chosen people? It’s a metaphor made in light-hearted jest — but it speaks volumes.
Krugman knows that he is dealing with a group that has been marginalised for years. Indeed, there is much documentary evidence that Krugman has been on the front lines marginalising those very people. You can see this, for example, in his exchanges with James Galbraith in the mid-1990s.
But recently it seems as if the heterodox crowd have been getting a lot right: themes such as income inequality and stagnation are those that the heterodox literature deals with in detail. And the students are waking up to this.
Let’s be clear about to what extent Krugman is misleading his readers in his latest piece. First of all, he thinks that the heterodox have hoisted themselves onto a pedestal because of their greater ability to predict financial crises. This is not the case. I doubt that many heterodox economists would use this as the criterion as to what is and what is not good economics. A broken clock is, after all, right twice a day.
But Krugman goes a little far when he says that they have simply not made these predictions. We know well that heterodox economists have made extremely salient predictions over the past few decades — from the MMT proclamations on the Eurozone to Steve Keen and Ann Pettifor’s (among others) warnings of build-ups of private sector debt.
I think, however, that all this distracts from the key issue; which is that, silently, behind the scenes, the heterodox have been winning the debate. Krugman would never admit this, of course — indeed, he seems to live in a bit of an echo chamber over at the NYT with all his fanboys and fangirls and he may not even be fully cognizant of it — but if you move in economics circles you’ll know this to be generally recognised.
Take, for example, the Bank of England’s recent statement regarding how money is created. Krugman lost this debate to Steve Keen and Scott Fulwiller back in 2012 but he never conceded. Indeed, he selectively quoted the former to try to make his case (to whom he was making this case, I’m not sure, as most people interested in economics accept endogenous money theory these days). But when the Bank of England weighed in earlier this year the coffin was truly sealed. Of course, we heard not a peep from Krugman but we all know that he read the report which got extensive coverage on a blogosphere that we all know that he’s tapped into.
More and more heterodox ideas are getting play. In central banks, in newspapers among students. Anyone who surrounds themselves with the debate see that the orthodox — even the “lefty” orthodox like Krugman — come across as drab, stale and boring in the debates. It is heterodox economists that are providing good ideas, new interpretations and new policy innovations. People like Krugman are rehashing the ISLM and misunderstanding what a liquidity trap is and what it isn’t. The phrase “one trick pony” comes to mind.
Others, like Simon Wren-Lewis, are assuring themselves that mainstream economics is a science and that heterodox critiques are, presumably, as misguided as a crank trying to criticise the foundations of mathematics or chemistry. This is tied up with the idea — shared by Krugman — that our goal is to get rid of people like them. But as I wrote in response to Wren-Lewis in his comment section:
Heterodox economists do not reject much mainstream thought simply for the sake of rejecting it but rather because they believe it to be logically flawed. The only way that I can read your comment is “if a defining characteristic of heterodox thought is that it must reject anything that is mainstream, that is a problem FOR ME”. It is not a Problem in the abstract. You just don’t like it.
Also the [Manchester student’s] report is quite clear that we’re not talking about getting rid of mainstream economics altogether. I recognise that while I may think that it is a ghastly, illogical mess other people may not think so. They should be allowed to teach what they think to be Science. But that should not prevent others from pointing out that it may not be Science at all.
You think that mainstream economics is a Science. What gives your opinion weight? Presumably your PhD in economics. Well, I know literally hundreds of PhDs in economics that think exactly the opposite. The students are correct that both sides should get a hearing. If you are as convinced as you seem to be that your side is Scientific then you should be confident enough that you can defend this position rationally and convince students accordingly.
This is the line that heterodox critics must push. We’re not looking to lock people like Krugman and Wren-Lewis in a cage. We’re asking them to let people hear both sides of the argument. Personally, I know that the critics will win the argument if it is ever laid out; at least, to anyone who approaches it without a vested interest in maintaining the status quo.
But I suspect that Krugman senses this. I think he knows that he might lose the argument if the cat is ever let out of the bag. So, he wants to avoid the argument at all costs. Meanwhile, the DSGE crowd like Wren-Lewis are literally walking around like zombies that haven’t yet realised that their arguments have been rejected, by policymakers, central bankers, newspaper journalists and, now, students.
It’s a sad show to watch and speaks volumes about an all-too-human tendency to myopia and the problems associated with academic privilege. But it is a show that will not stop no matter how many blogposts Krugman writes to defend the status quo. That much can be told merely by reading Krugman’s own comments section.
Update: Stephanie Kelton has directed me to this excellent essay by James Galbraith from 2009. It is well worth a read.
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The genius had this superb insight in dismissing Martin Wolf’s suggestion to take away money printing from the banks. This was from his piece on “Is A Banking Ban The Answer?”
“Yet the quick return to normality in financial markets (achieved, to be sure, through bailouts and guarantees) did not produce a quick recovery in the real economy; on the contrary, we’re still depressed and many advanced countries are now on the edge of deflation, more than five years later. . “
I suspect Wolf is saying this now because the state is the bank and the bank the state so I guess its safe to go to the next level.
The core problem remains – the gross centralization of the money power.
Propaganda is everywhere now.
Recently Ambrose Prichard talked about debt Debt Servitude
“Much of Europe still clings to late Medieval notions of debt sanctity, with laws to match, though a spate of suicides is forcing reform”
What has modern Europe in common with English medieval practices of money creation & destruction ?
Pray tell me >
Was not money creation a binding contract between the King and nobles ?
It was not hidden in the tabernacle to suddenly sprout forth into so called
sovereign obligations………….
We are dealing with multiple almost infintite levels of Bollox.
Why make the Bollox more Byzantine when dredging up these arcane money debates with obvious functionaries of the debt system.
If we are to use the scientific method of the banking republics against them then at least try to make the solution to this complex problem as elegant as possible.
Pilkington however keeps coming up with more and more bloody epicycles.
The main stream economists like Krugman will always criticize any economist that threatens the privately owned and operated Federal Reserve.
Unfortunately for these economists the Bank of England has pulled their pants down around their legs and the view is that of Fed eunuchs …
The question should be: Why did the Bank of England admit to/divulge a secret that they had held for some 300 years? Maybe Krugman knows …
Q. “Why did the Bank of England admit to/divulge a secret that they had held for some 300 years?”
A. Maybe for the same reason that the Catholic church was eventually put in a position where it had to ‘fess up that the Earth really does orbit the Sun and not the other way round.
Actually Clive, the Sun does orbit the Earth IF your coordinate system is Earth centered. I proved it to myself with a Solar System Simulator using the Law of Gravitation and sure enough the Sun did a nice circular orbit around the Earth and I saw epicycles too.
Not to defend the Roman Catholic Church though since it contradicts the Bible.
Wrong! The Sun does not orbit Earth. If you use non-inertial coordinate systems, you can prove anything you want, from epicycles to dark magic.
Earth-centered is an appropriate coordinate system for many applications. Examples: weather forecasting and knowing when to plant.
Btw, remember “turtles all the way down”? That is not in Scripture but instead:
“He stretches out the north over empty space and hangs the earth on nothing. Job 26:7 [bold]
Outrageous — Fed eunuchs exposed by uncircumcised heathen Gentiles. No wonder PK’s panties are so twisted.
Whoops, cut off the critical part:
“I’m strongly of the view (based in part on Mian and Sufi’s work) that broader issues of excess leverage, and the resulting balance-sheet problems of many households, are key. And neither 100% reserves nor a repo tax would have addressed that kind of leverage.”
Exactly. Reserves and repo tax are a distraction, see Mosler’s site.
Banks use fiat money (magical money borrowed from the future) to extend credit, and this is necessary in a modern society… indeed, one of the advantages that came from doing away with the gold standard. Of course, such magical powers only exist as a subset of the Fed’s magical powers, and therefore there is no good reason for banks to be in the private sector… but that is not the point here.
High leverage at banks is not so bad if borrowers are not extended excessive leverage, e.g. buying houses with no money down, obviously worsened by not reviewing the true value of the collateral or the true income of the borrower. Reagan, for whom I voted twice, saw the best regulators as those that do not regulate, a foolish view inherited from Friedman/Rand.
Similarly, investors are allowed leverage by borrowing against stocks. There are times when leverage is not so dangerous, either to the buyer or to the system, i.e. when prices are low… best, of course, if changes to leverage are automatic, i.e. part of the automatic stabilizers. So allow home buyers more leverage when both price to income (specifically, their own verified income) and price to rents are low, and similarly allow equity buyers more leverage in a given stock when the stock p/e is say below 14, and less as it rises above such a level. In addition to reducing leverage and systemic risk when prices are high, such a policy reminds buyers they might be paying too much for an asset. Meanwhile, reduced leverage does not prevent prices from rising when some new paradigm has in fact arrived.
The Fed’s interest rate lever is not effective in moderating the business cycle now on account of excessive household debt, and it will be years, IMO at least a decade, before such debt will recede sufficiently for control to return. Meanwhile, as debt sporadically decays, growth will be slow, interrupted with recessions… there was relief a few years ago when it seemed we were no longer following the Japanese model, IMO premature.
This means we critically need more USG spending to replace the capital, previously borrowed from the future, that spontaneously evaporates during defaults. Dysfunction in DC, however, combined with a widespread lack of understanding of the advantages of our fiat economy, or of how it really functions, means such spending will continue to be much too low.
The mantra should be, ‘remember WWII’. It is widely believed that WWII brought us out of the depression, we need to point out over and over that that massive spending brought about full employment, and the record deficits as a percentage of GDP following WWII melted away as growth surged.
Of course, low household debt at the end of WWII is what gave the Fed economic control through the interest rate lever, good for half a century of ‘Great Moderation’. In reflecting on this, it becomes clear that household leverage should be further (automatically) reduced as overall household debt approaches what we now know are dangerous levels.
This is what sends me a bit around the twist – that the PM mob thinks that things will be swell in light of the household [depositors] some how socking away 25%+ savings. Tho they don’t even unpack how that bit of magic is supposed to happen, especially in light of the conditioned consumer either blowing the wad on status/play toys, eaten up by increasing outflows [rentier bottlenecks – energy] or wage stagnation/deflation.
So where is this magic savings going to come from with out affecting GDP et al, jubilee?
skippy…. reminds me of the kids in my youth that would build something and then demolish it, rinse and repeat, because something in their psyche told them to do it.
So where is this magic savings going to come from with out affecting GDP et al, jubilee? skippy
Is reading comprehension your problem? But once again though you will no doubt ignore it this time too. But others might not.
1) Ban further credit creation by the banks, at least temporarily. This would be massively DEFLATIONARY as existing credit debt was repaid with no new credit debt to replace it. Honest, 100% reserve loans would still be allowed of course.
2) Hand out new fiat equally to the entire population at a rate metered to just counter the deflation in 1) or slightly exceed it. Continue till all demand deposits are 100% backed by reserves less borrowed reserves and less the MBS the Fed has bought which should be crammed back on the banks in exchange for their reserves as their reserve positions allow.
3) In the mean time, establish a Postal Savings Service that makes no loans and pays no interest and announce a termination date for Federal deposit insurance. Since all demand deposits would be 100% covered by reserves this should pose no problem to the banks as all but 100% voluntary depositors abandoned them for the PSS.
4) After abolishing the lender of last resort and other privileges, allow the then 100% private banks to extend as much credit as they dare and zealously liquidate them when their checks bounce.
How can a group of people suffering from a mental disorder organize themselves into two separate groups and then argue with each other?
It seems like a paradox, but it isn’t when you realize it’s a symptom of the disorder. It’s a fulsome disorder! Very fulsome if you measure it
The disorder itself is the central issue — it’s structure, nature, etiology and cure. This is a case for skilled psychotherapy and possible pharmaceutical intervention. One therapeutical technique involves removal of Cartesian coordinate systems from the vicinity of the patient. However this modality should be accompanied by dosages of xanax to prevent withdrawal anxiety. You can let the patient retain access to number but only natural numbers and no irrational numbers.
“How can a group of people suffering from a mental disorder organize themselves into two separate groups and then argue with each other?”
Numbering off like we used to do in gym class. Everybody lines up and then it’s “One.” “Two.” “One.” Two.” etc. This method has the great advantage of being incredibly simple (important when dealing with the mentally deficient) and can be easily expanded to accommodate 3, 4, or even 5 different groups.
As for the anxiety, I’d recommend pot over xanax, just so we aren’t throwing more money at the Pharma companies. Hmmm…maybe we should require all academic economists to relocate to Colorado or Washington state. Might do them all some good…
Enough of the fulsomes already craazyman, I’m starting to get a complex about it now. I’m even starting to worry about words I thought I was on nice, safe, ground with. Like “stinky”. Can I use “stinky” without offending the entire population of North America ? As in, “I think Paul Krugman is stinky”. Is that liable to cause an international incident the way it would if I were to say “I find Paul Krugman very fulsome” ? Anyhow, if I may be so bold as to speak for the whole of Great Britain, we’re drawing the line here. We’re not taking any more guff from you yanks. You need to stop throwing your (usually very fulsome) weights around and start taking care of business at home. You can begin with keeping that Krugman character on your side of the Atlantic and not letting him roam around our solid and respectable academia willy-nilly http://www.economics.ox.ac.uk/General-News/professor-paul-krugman-visiting-the-department-in-trinity-term-2014. What’s with that ? You turn our Nigella Lawson around at the US border but we’re supposed to let Krugman in ? Push us any further and we’ll withdraw our labour. Try casing Game of Thrones without us Brits. Let me tell you, it will be a lot poorer with George Hamilton instead of Charles Dance.
HuffPo edited all the nude scenes from GOT into one video clip and posted it as a public service. It’s the best thing that’s come out of England since Led Zepplin! Someday I’ll have to watch the full episodes or even read the book.
“You know Huffpost became a hard core porn website so gradually, I hardly even noticed.” -uttered by some simpleton in 2016.
“The HuffPost: Why the porn industry is losing money.”
“The Huffpost: All the boobs fit for youtube.”
“The Huffpost: Despite the videos of tits, at least we don’t pay for boobs like Krugman. We don’t pay anyone.”
Noted videophile Turgid Johnson insists the books just don’t measure up.
“”Can I use “stinky” without offending the entire population of North America ? As in, “I think Paul Krugman is stinky”.”
It’s okay by me.
But, if we have to keep him here, it’s only fair that you take back Niall Fergusen– for good this time!
For years I tried to give back Christopher Hitchens. But that’s all over now.
How indeed? I once again invoke the art of Philip K Dick, in particular his novel: “THE CLANS OF THE ALPHANE MOON”. The following is a brief description of the various mentally ill, who divide themselves into groups based upon each psychiatric disorder on this moon colony in the future. Thank you wikipedia.
On Alpha III M2, psychiatric diagnostic groups have differentiated themselves into caste-like pseudo-ethnicities. The inhabitants have formed seven clans:
The Pares are people suffering from paranoia. They function as the statesman class. The Pare representative to the supreme council is Gabriel Baines, and their settlement is called Adolfville (named after Adolf Hitler). It is located within the northern sector of Alpha III M2, and is heavily fortified. This is where the supreme council building is, a stone, six-story-high building, the largest one in Adolfville.
The Manses are suffering from mania. They are the most active class, the warrior class. The Mans representative is Howard Straw. The Mans settlement is Da Vinci Heights. It is characterized as diverse but disordered, without aesthetic unity, “a hodgepodge of incomplete projects, started out but never finished.” Also, this is where Alpha III M2’s television transmitter is. There is supposed to be tension between them and the Pares, with the Manses constantly trying to stage a coup d’état.
The Skitzes are the ones suffering from schizophrenia. They correspond to the poet class, with some of them being religious visionaries. The Skitz delegate to the bi-annual get-together at Adolfville is Omar Diamond. The Skitz town is named Joan d’Arc, “poor materially, but rich in eternal values.”
The Heebs consist of people suffering from hebephrenia (disorganized schizophrenia). Their settlement is Gandhitown. To the other clans, they are useful only for manual labour. Their representative is Jacob Simion. Gandhitown looks like “an inhabited garbage dump of cardboard dwellings.” Like the Skitzes, some of the Heebs are religious visionaries as well; but they are inclined to produce ascetic saints, whereas the schizophrenics produce dogmatists. An example is “the famous Heeb saint, Ignatz Ledebur, who radiated spirituality as he wandered from town to town, spreading the warmth of his harmless Heeb personality.” Another notable Heeb character is Sarah Apostoles; she together with Omar Diamond and Ignatz Ledebur form “the so-called Holy Triumvirate.”
The Polys suffer from polymorphic schizophrenia. Annette Golding is the Poly delegate to the supreme council and their settlement is called Hamlet Hamlet. They are the creative members of society, producing new ideas. The children from every clan on Alpha III M2 were born Polys, went to their common, central school as Polys, did not become differentiated until perhaps their tenth or eleventh year. Some never became differentiated, though, hinting that, perhaps, some of them do not actually have mental disorders at all.
The Ob-Coms are the ones with obsessive-compulsive disorder, their delegate is Ingred Hibbler. The name of their location is not given. They are the clerks and office holders of the society, the ritualistic functionaries, with no original ideas. Their conservatism balances the radical quality of the Polys and gives the society stability.
The Deps are suffering from clinical depression. Their representative to the supreme council is Dino Watters and the name of their town is Cotton Mather Estates, where they live “in endless dark gloom.”
oh dear….
Ricardo’s idea is truly, madly, deeply difficult. But it is also utterly true, immensely sophisticated — and extremely relevant to the modern world.
It’s still shocking, even after all these years, that the “left’s” economist could utter this trash. How does a nation determine which products it should specialize in? What happens if (following Ricardo’s theory to its logical conclusion as endorsed by Krugman) the country specializing in supply of the world’s octo-core processors, suffers a disruption in its production. Years would be required for someone else to develop this industry from scratch, and that can only happen after all the nations of the world determine who would possess the greatest comparative advantage.
Like Ricardo, Krugman assumes far too much.
That is the disorder in full flowering — it’s an inability to separate Quantity and Form. They see Form out of the corner of their eye, they realize they can’t map it on a Carteisan coordinate system so they panic and call it “normative”. They ignore it and then they banish it. And they call it rigor. They say it’s “positive”. It’s rigor all right — rigor mortis. This is what happened to Pentheus in The Bacchae and how did that work out for him. I read about him last night in my library having a sherry by the fire — well, a glass of cheap wine in a small room with an electric heater anyway. But you have to use your imagination sometimes if you want to see the Truth.
As Ralph Gomory says:
What do you do if your comparative advantage is in opera singers?
He’s pretty blunt about the shortcomings of global mercantilism.
Without the government-backed counterfeiting cartel, the banking system, corporations would be widely and roughly equally owned, so that nearly all of us would benefit from automation, outsourcing and free trade. Instead, workers are desperate to protect their jobs from foreigners since they’ve been denied the income stream that comes from being owners of capital.
So the comparative advantage of Ricardo becomes the disadvantage. Because in this modern global world there is no comparative advantage, except ones that are imposed by prior advantage. And so that makes the theory false. Evolution in process.
Which of Ricardo’s ideas?
“Comparative advantage” has no empirical evidence supporting it!
It is almost certainly false.
Some of Ricardo’s other ideas were much better. But “comparative advantage” is the one which modern economists like to parrot, like trained birds.
Good post but it is unfortunate that the author is unaware of the near entirety of twentieth century philosophy when it comes to the metaphysical premises of math and science. Martin Heidegger a crank? Have you read his writing?
Krugman has a Role to play in the political arena and he plays it very well–as was pointed out here, he is a DP political operative. That means that he is part of a whole network of people in academia, the media, the WH, various levels of gov’t, the FIRE sector and so on. These people socialize, connect and maybe even get into bed with each other and form a little society with particular beliefs and attitudes that “fit” together. The idea that scholars take “objective” positions in their areas of study is, sorry, anti-scientific–that’s not the way people work. Krugman possesses a good mind and, I believe, has intentions of finding the right answer to complex questions and cares (mainly in the abstract) about our society–but, from my point of view and most people who post here, he is one of “them” who, frankly, favor oligarchy not because they favor oligarchy (in the abstract) but because they find themselves part of that group.
I’ve met many scholars who do their best to go where the evidence takes them. Many of them may labor in obscurity, but they still are out there. And it is rare for a good historian not to admit ambiguity and multiple causalities and complex interplays of structure, chance, and personality in history. Yes, if you want to make a splash it is best to have combine a strong thesis with a cool method on a hot topic and a clever, erudite, and style. Or, you can be useful to the rich and powerful (can anyone say Niall Ferguson). But to say that it is “unscientific” to imagine that some scholars do their work with their eyes open to the evidence and modify their views as they do the research is unfair.
I’m aware that most scholars do the best job they can–the field demands a certain amount of pride in work–rewards are not ordinarily very high. But, even those who do labor in all honesty, to be open generally fall into cant and conventional thinking for all kinds of complex reasons some of them unconscious and there is such a thing as unconscious motivation contrary to the tendency of American academics to ignore that reality. Objectivity objectivity as an ideal is impossible as free markets are impossible–it is, at best, a sort of ideal that can be approached–true self-knowledge always will point, however, to its impossibility.
So Banger, you believe that Krugman is making honest mistakes and we at NC are simply biased against him because he happens to be a member of the political establishment?
You sound like Jesus Christ: “Father, forgive them, for they know not what they do.” You are on a higher spiritual plane than I have attained. I’m more partial to the observation that “It would be better for them to be thrown into the sea with a millstone tied around their neck than to cause one of these little ones to stumble.” Better to be drowned, mafia-style, than to lead the sheep astray? Wow. Better repent, Paul.
I think they deserve Doug’s treatment too. In clown fish, if one removes the leader, another always appears from the proles, sometimes even changing sex. There’s a really good paper on comparative analysis here:
http://wer.worldeconomicsassociation.org/files/WEA-WER2-Schumacher.pdf
We need to be cruder, like Doug. Former Catholic priests and seminary survivors have told me there was much internal debate as James suggests, doubting received wisom and the religion itself. Of course, it was still heresy to go public, even on the child sex stuff. The lunatic and magic nature of comparative advantage is clear and should have been exposed years ago. It is simpleton nonsense and amounts to, say, making all weapons in the UK. You guys can trade what you produce best too. Now how do you like living in the British Empire? Simples!
Krugman has a Role to play in the political arena and he plays it very well . . . [he] possesses a good mind and, I believe, has intentions of finding the right answer to complex questions and cares (mainly in the abstract) about our society–but, from my point of view and most people who post here, he is one of “them” who, frankly, favor oligarchy not because they favor oligarchy (in the abstract) but because they find themselves part of that group.
Banger comes not to praise Krugman but to bury him . . . with rose pedals and kisses.
————————————————————————————————————————–
Krugman is not just a member of a certain benign social group. He promotes harmful neolib policies (TPP, market bubbles, etc.) by slyly pretending to be an independent, left-leaning economist. No one in their right mind would put up with such back-stabbing ‘friends’ as Krugman and Obama. I believe that most people who post here see through Krugman and are disgusted by those that seek to praise or excuse his behavior.
“And perhaps most important, Krugman has repeatedly called himself a liberal, so he must be a liberal, right?”
This is an interesting strategy as Philip Mirowski writes about in his book “Never let a serious crisis go to waste” (2013) on how neoliberals blur, label themselves falsely as this accentuates their fundamental role and intellectual objective of being perceived as a neutral gatekeeper (or a font of wisdom).
As Mirowski reminds us “Nothing gets the blood boiling like the assertion that we have been arguing over nothing.” p.37 (saying that the term neoliberalism does not exist in this case).
There are those who deny the term or that there is a coherent neoliberal position that exists. This is what I have seen from Krugman consistently (not to mention his embrace of Hilliary Clinton early on in the 2008 primary). Mirowski makes the point that if people tend to adopt the position that if “we” refuse to call ourselves neoliberal, then no one else can rightly do so as well.
Mirowski uses Daniel Stedman Jones’ work: “Masters of the Universe” to point out how the chameleon changes over time: “This nominalist position can be rapidly disposed with. As my collaborators (Deiter Plewhe) and I have insisted elsewhere, the people associated with the doctrine “did” call themselves neoliberals for a brief period lasting the 1930s to the early 1950s, but then abruptly stopped the practice.”
I have gratitude for Pilkington, Baker, & Yves here, because this type of obfuscation (while clear to some in the field) is not readily or widely understood by those who depend upon experts, teachers and an academic community to translate complexity for us (especially around modeling, what being a rebel really entails in economics, politics and social life (an inclusive heterdoxy), and making the work interesting enough that the man on the street can understand it.
A Pilkington post without a graph.
Is this a first?
Well, its true young Philip likes his graphs, however, others don’t, and not for the reasons users of new social media may consider, suffice to say, its actually difficult to print graphs in a physical format without doing a fair bit of work on the original source material, or actually re-doing it from scratch with the proper graphical tools and equipment – this costs money, and given us “leftists” have but pennies to rub together, its best to avoid graphs and charts as much as possible, otherwise we may end up bankrupting our businesses.
This issue Mr. Pilkington has been made aware of, hence it seems the advice rendered has been acted upon!
That’s what digital media are for – which this is.
I like his graphs.
Well, you know Ricardo was right. Comparative advantage is important. It’s just that the comparative advantage of US-based transnational corporations is in exploiting the corruption of US politicians and the cynicism of the media, and the gullibility of over half of the US voters. Ricardo never said that comparative advantage had to be productive.
So we now have an international political economic race to the bottom, perfectly analyzed by Saint (or is that now Rabbi, since the the term “gentiles” was introduced) Ricardo. /s
Comparative advantage, even in Ricardo, was a groaf, groaf, groaf theory Tar. Of course, trade was to be linked to gold transfers between countries. The British, Dutch and Japanese rather cunningly worked to the opium-heroin standard. Ricardo even had capital and labour trapped in national boundaries. All five of his main assumptions have been debunked as long ago as Joan Robinson. Robinson, J (1973), The Need for a Reconsideration of the Theory of International Trade, In: Joan Robinson (Ed.). Collected Economic Papers, Volume 4, Oxford: Basil Blackwell, pp. 14-24.
Elite economists certainly think highly of themselves.
Krugman has the guiltiest looking eyes I’ve seen in a long time.
I actually laughed out loud at this, Beard. In fact, I still am. Laughter is the best medicine ;-)
* * *
We might contrast Krugman’s eyes to Obama’s, which are dead.
Obama does seem bored with being President. I suspect terror Tuesdays just aren’t as thrilling as new terrorists pop up despite our only occasional bombing of innocent but poor people.
Being the first black President was a great career move, but now he’s probably looking forward to the next stage: the speaker’s fees, the book/s, the “academic” positions, all those interviews and so on. He’s a very upwardly mobile guy. A real example of the American Dream.
Obama won’t humble himself like Carter, and he isn’t as interesting or as popular as Bill. I see co-hosting duties with Craig Kilbourne, and if he is really lucky being appointed to some faux board with Dubya.
no kidding – I noticed that too
from Hugh,
“It is like a plea from the chickens to the fox to provide better security for the henhouse.”
Paul Krugman’s honorable intentions on manifestly rigged trade are highly dubious. PK, from Yves’ intro, “Take ignorance seriously: … it is remarkably easy to make fools of your opponents, catching them in elementary errors of logic and fact. This is playing dirty, and I advocate it strongly.”
Is it really possible, after years of crafting his pseudoliberal, bearded-scholar persona and tailoring his propaganda to support the Great Deceiver, that he is truly unconscious of the unprecedented inequality, human misery, and mounting body-count wrought by neoliberal globalism? I think not. PK is not “part of the problem”; he’s the crux of it, just as Obama is the more effective evil thru calculated deception. He’s every bit the conniving con that Obama is, and thru conscientious diligence, he’s earned his very own lamppost.
+number of angels that can dance on the head of a pin
I don’t see this in either the comments or the article, so (credit to Herman Daly):
Krugman, and most economists, are careful to leave out a crucial element of Ricardo’s theory: he “assumes” (economists systematically misuse this term), in other words requires, that “production factors,” capital and labor, don’t and can’t move between countries. In his day, that made considerable sense; for the most part, they didn’t. It’s obviously intended for geographically based industries like agriculture or mining. If you literally trade apples for oranges, it’s true, both sides are ahead (assuming they like oranges).
But today, in a bizarre display of either dishonesty or incompetence, “comparative advantage” is routinely used to justify FACILITATING the free movement of capital – in other words, to invalidate key premises of the theory. Either they didn’t read him, or they’re just lying.
Economists routinely misuse “assumption” to mean “premise” or “requirement.” As in: “assuming that X is true, then Y follows.” Somehow, they then miss the corollary, that if your assumption is obviously not true, so is your conclusion. Or your whole theory.
Fortunately, this does make them easy to mock.
I’m reminded of Krugman’s line about Cuba and inequality. Of course, he neglects to mention the US’s embargo of Cuba, and due to size and geography, any discussion or comparison to Cuba is ludicrous.
Thanks. That saves me the trouble of saying it myself. Right on.
There’s a very convincing hetero paper on this I keep linking to, only to find the comment poofing into moderation mist.. There are at least 5 of these ‘assumptions’ that make no modern sense at all.
http://wer.worldeconomicsassociation.org/papers/deconstructing-the-theory-of-comparative-advantage/
Frankly, this puts paid to any modern theory of comparative advantage. I was teaching ‘The Comparative Advantage of Nations’ as wrong in the 90s, well back-up by serious evidence and papers, but people still take Michael Porter seriously.
The purpose of Krugman is to pose as the left limit of reasonable economic opinion. Considering he was a Reagan advisor briefly I think demonstrates how far to the right the economics discussion has moved in order to chase the rainbow of Greenspanian excess.
In this sense Krugman performs the media function that Alan Colmes did on Hannity and Colmes. It’s kayfabe in many ways, a media circus not intended to reflect reality and not much different from any other authoritarian empire.
Unlike Krugthullu, only the Glen Becks of the world thought Colmes was anything other than a foil for Hannity in lieu of guests who might inadvertently embarrassing Hannity who could cause one to inadvertently see BillO as an egghead hippie. BillO doesn’t know how tides work.
Maybe it’s really simple. There is money to be made in economics education. That is actually Prof. K’s day job. There is the textbook, too. And as the US’ university sector becomes ever more oriented to the children of the 1%, you have to realise that there’s no point in talking about heterodox economics or radical lefty stuff. They’re not going to pay to hear that message. What they want is a justification for having all that money.
There is a nice parallel with the old function of universities – to train priests, lawyers and doctors. If you’re going to be a priest, you want to learn all the justifications for selling indulgences, getting tithes, having a lot of Church property etc., and how to keep people paying for everything; let’s hear it for miracles, holy relics, absolution, hierarchy. Students like that don’t want to know about poverty, spirituality, the priesthood of all believers and such lefty stuff.
Could this comment of Prof. K’s be read as a tacit admission I have hit the nail on the head?
“… shocking the liberal bourgeoisie is not how I see my job”.
http://krugman.blogs.nytimes.com/2014/04/30/on-progressive-econoblogging/?_php=true&_type=blogs&module=BlogPost-Title&version=Blog%20Main&contentCollection=Opinion&action=Click&pgtype=Blogs®ion=Body&_r=0
One instance of the difference between Krugman the liberal columnist and Krugman the political activist, close to the Clinton wing of the U.S. Democratic party, was observed closely a couple of years ago by one of the victims of eurozone austerity, namely Portugal.
Krugman visited the country in February of 2012, and naturally the domestic left was placing high hopes on his presence there, taking into account his record as a sharp critic of austerity policies in the eurozone.
The left, however, was about to feel cruelly deceived. Krugman wined and dined with the local authorities including the Prime MInister and Finance Minister and ended up making appeals for domestic wages to be reduced by 30 per cent. This as a prescription for a country that already had, by far, the lowest real wages of western Europe.
In sum, his statements could have been pronounced by any freshwater economist. No hint of keynesianism, old, new, or post in his words.
So we know what to expect when push comes to shove. Krugman may look like a reasonable chap while writing for the NYT but as far as real world policies and power politics are concerned he tends to eschew coming down on the side of the common, hard working, badly paid and ultimately defenseless citizen.
The only honest thing that can be said in most consultancy circumstances is to admit most of the theories don’t work. This, of course, is not how sales work for consultants.
And if you look at this work by our own Joan of Arc, you’ll see how long ago this form of comparative advantage was found dead:
Robinson, J (1973), The Need for a Reconsideration of the Theory of International Trade, In: Joan Robinson (Ed.). Collected Economic Papers, Volume 4, Oxford: Basil Blackwell, pp. 14-24.
Joan Robinson was a smart and well-informed woman.
It’s very interesting that Ricardo’s “comparative advantage” continues to persist as a ZOMBIE IDEA, even though it has no empirical evidence supporting it, and a mountain of evidence against it.
(For the sake of clarity, I will reiterate that “absolute advantage” actually exists and there is empirical evidence for it. It’s “comparative advantage” which is false.)