Paul Krugman: The Accidental Theorist

What is a public intellectual? According to Wikipedia, it is (roughly) an intellectual who takes important debate to the public.

(This is a pretty darn awful cover, if you ask me.)

I'd add a rider to that definition: the public intellectual needs to be doing so in an intelligent, elucidating manner. That rider eliminates quite the number of so-called "public intellectuals" who are merely propagandists (like most of the op-ed writes of the Weekly Standard, the National Review or the Wall Street Journal) or cranks either blowing up personal hang-ups to ridiculous proportions, or putting out a lot of garbage under the pretense that it's worthy of somebody's attention. (I'd nominate somebody like Jan Myrdal in this category, for – for example – going to China and being totally snookered by the Maoist dictatorship, and then propagating that vicious regime as some sort of "model" for the rest of the world.)

Paul Krugman is, to me, pretty close to the ideal of what a public intellectual should be. He is a prolific writer with not only a twice-weekly NYT column and a blog, but several books under his belt as well – some of them economics textbooks, some of them essays on current economic history – and a number of articles, in journals as well as aimed at the general public. The Accidental Theorist falls under the "collections of essays aimed at educating the general public" banner. In it, Prof. Krugman tells us, among other things, that

• No, losing jobs in one sector of the economy due to productivity growth doesn't mean that the whole economy is tanking; rather, other sectors will usually pick up the slack if you don't have policies that actively work against job creation. (This doesn't apply to the current crisis, where the job loss is in practically all sectors of the economy and not caused by increased productivity.)

• Programs that help the working poor is a Good Thing, and should be fought tooth and nail for.

• Fine phrases will unfortunately never overrule the reality that hard, realistic analysis describes. You have to base your policies on that analysis, not on your own wishful thinking. (This point was made in connection with French economic policy, but also got me thinking of the back-of-the-envelope calculation Prof. Krugman did of the stimulus the Obama administration was trying to get through Congress despite the united obstructionism of the Republicans and some unwilling Democrats as well as the demand loss that it was supposed to compensate for, and how he – from the numbers, mind you, not ideology – concluded that the stimulus was too small and wouldn't be enough to kick-start the economy. It did stop the bleeding – see, for example, here – but it wasn't enough. His prediction was validated by events, unlike the ideologically driven and/or just plain paid for "stimulus doesn't work, stimulus doesn't work"-chanting of bought-and-paid-for pundits like the ones at the Weekly Standard or the National Review.)

• No, the right-wing meme that tax cuts pay for themselves isn't true; nor was it when it was used by the Reagan administration to get the US started on its current, long-lasting huge deficits trajectory. (And no, the economic recovery under Reagan wasn't particularly awesome.)

• Right-wing propagandists like Richard Armey et al lie frequently, and shamelessly. Exposing those lies is pretty much a full-time job, since the lies – being useful to a rich and influential segment of society – return again and again; again, frequently being mouthed by bought-and-paid-for pundits (and so-called "scholars" of equally so-called "think tanks"). Yes, that applies to supply-side economics as well. Especially to supply-side economics.

• Globalization isn't ruining the world; the rich world has to accommodate to the fact that competition is increasing, but that can be done without crashing our economies or our socio-economic safety nets, and the many millions of people in the Third World whose standard of living improves if they can get relatively decent work and use trade to improve their living standards are better off than they would be if locked into the previous status quo.

That's pretty much half the book right there; the second half, you'll have to read all on your own. And you should. If you're a liberal, for affirmation and for getting the necessary arguments to stand up against strident left- and right-wingers. If you're a left- or right-winger, to get a different perspective from your own, and one that is very, very well argued.

Professor Krugman is indeed a gem of a public intellectual, writing clearly and understandably on important subjects. (Here is a recent example of him performing that important task yet again.) This book is warmly recommended, and I'll wind this down by quoting it directly:


"Particularly depressing for anyone who would like to believe in intellectual progress is the reappearance of decades- or even centuries-old fallacies, stated as if they were profound and novel insights – as if those who propound them have transcended conventional views, when in fact they have merely failed to understand them."


Another review of the book can be found here.

Vacation

Well, this blog's still on vacation, but the good news are, if you're on a vacation as well, you have the time to watch a Paul Krugman lecture on Keynes and today's situation.

It's Paul Krugman, so it's good.

Social liberalism

Paul Krugman, in a very perceptive post, not only gives a very good definition of what Social liberalism is, but also a most eloquent rationale for why it is the most decent political "ism" out there:

 [T]he typical conservative line about equality of opportunity, not results, really implies the need for a radical restructuring of our society, which doesn’t offer anything remotely resembling equal opportunity. At this point, however, there’s a tendency to think about what that restructuring would involve — and because it’s basically impossible, to throw up one’s hands.

 The point is that you don’t, in fact, have to be that radical once you drop the rigidity of the conservative position. If you admit that life is unfair, and that there’s only so much you can do about that at the starting line, then you can try to ameliorate the consequences of that unfairness.

 My vision of economic morality is more or less Rawlsian: we should try to create the society each of us would want if we didn’t know in advance who we’d be. And I believe that this vision leads, in practice, to something like the kind of society Western democracies have constructed since World War II — societies in which the hard-working, talented and/or lucky can get rich, but in which some of their wealth is taxed away to pay for a social safety net, because you could have been one of those who strikes out.

 Such a society doesn’t correspond to any kind of abstract ideal, whether it’s “people should be allowed to keep what they earn” or “from each according to his ability, to each according to his needs”. It’s a very non-Utopian compromise. But it works, and it’s a pretty decent arrangement (more decent in some countries than others.)

 That decency is what’s under attack by claims that it’s immoral to deprive society’s winners of any portion of their winnings.

 © 2011 The New York Times Company.

And since it's just a couple of days since the horrible tragedy in Arizona, I might add that while mentally disturbed murderers of politicians often have famous and/or infamous political tracts at home, and quite possibly as favorites, there are certain political tracts that don't seem to be as popular with the psychos, terrorists and killers out there, whatever their political leanings. Social democracy and social liberalism, for example, don't seem to move very many people to severe violence. John Stuart Mill's "On Liberty", which can be seen as the first great work of social liberalism, is one of those books that doesn't seem to elicit violence. Not just for that reason, I warmly recommend it – it's a very persuasive, and largely very modern, book.

It's not perfect, however (and I hope to come back to the subject of how the search for perfections actually seems to be an indication of a totalitarian mind-set) – because however intelligent and far-sighted Mill was, he was still a man of his time, and he didn't see colonialism in quite the manner we see it today. So he was flawed, but let's all just grant that he was wrong on that issue and not make up some long-winded defense of him there: he was simply wrong. He was, however, as close to flat-out correct as it gets when it comes to the subject of liberty, and the book is warmly recommended.

(I may take myself up on that recommendation, as it's probably been about a decade since I last read it.)

För de MYCKET intresserade av ekonomisk politik

För er som inte tycker det är särskilt intressant med politik är det här nog inte en länk att följa. Men för er som vill ha en koncis genomgång av den intellektuella bakgrunden till hur världen hamnade i sin nuvarande ekonomiska kris kan jag bara rekommendera att ni läser hela Paul Krugmans blogginlägg.

 It’s possible to be both a conservative and a Keynesian; after all, Keynes himself described his work as “moderately conservative in its implications.” But in practice, conservatives have always tended to view the assertion that government has any useful role in the economy as the thin edge of a socialist wedge. When William Buckley wrote God and Man at Yale, one of his key complaints was that the Yale faculty taught – horrors! – Keynesian economics.

I’ve always considered monetarism to be, in effect, an attempt to assuage conservative political prejudices without denying macroeconomic realities. What Friedman was saying was, in effect, yes, we need policy to stabilize the economy – but we can make that policy technical and largely mechanical, we can cordon it off from everything else. Just tell the central bank to stabilize M2, and aside from that, let freedom ring!

When monetarism failed – fighting words, but you know, it really did — it was replaced by the cult of the independent central bank. Put a bunch of bankerly men in charge of the monetary base, insulate them from political pressure, and let them deal with the business cycle; meanwhile, everything else can be conducted on free-market principles.

And this worked for a while – roughly speaking from 1985 to 2007, the era of the Great Moderation. It worked in part because the political insulation of central banks also gave them more than a bit of intellectual insulation, too. If we’re living in a Dark Age of macroeconomics, central banks have been its monasteries, hoarding and studying the ancient texts lost to the rest of the world. Even as the real business cycle people took over the professional journals, to the point where it became very hard to publish models in which monetary policy, let alone fiscal policy, matters, the research departments of the Fed system continued to study counter-cyclical policy in a relatively realistic way.

But this, too, was unstable. For one thing, there was bound to be a shock, sooner or later, too big for the central bankers to handle without help from broader fiscal policy. Also, sooner or later the barbarians were going to go after the monasteries too; and as the current furor over quantitative easing shows, the invading hordes have arrived.

 Copyright 2010 The New York Times Company.