Why does Paul Krugman write?

Paul Krugman, the esteemed economist, has a new book out and so he is doing what esteemed economists do when they have new books out; he is promoting his book and getting reviewed. But can he hope that his work will fundamentally change government policy? I don’t think so. More realistically, he can hope that the people who back his ideas might get enough power to enact his suggestions.

This line of thought was inspired by Felix Salmon’s review in the New York Times not because he had much interesting to say about the ideas in Krugman’s book but more for what it said about the possible impact that someone like Krugman can expect to have.

Salmon’s review starts with some pretty basic power analysis. He says;

Rich people have more power than poor people, and they use that power to get what they want — which is, normally, more wealth and more power. Across America, politicians invariably reflect the views of their richest constituents. And the Federal Reserve, too, appears to have been captured by the rich: It seems much more worried about the specter of possible future inflation (which might be bad for the rich) than it is about the tragedy of present-day unemployment (which is calamitous for today’s jobless).

Worth pausing to consider the enormity of what he’s saying here and the fact that if any politician were to say this they would be flayed alive.

Salmon continues to explain Krugman’s argument that the status quo is unacceptable and that government must do something (anything?) as a matter of high priority. However, the stinger comes when Salmon (very fairly I think) says that Krugman’s

pleas will fall on deaf ears, as long as the rich remain well fed and in charge of the levers of power in Washington. That’s a matter of simple political reality.

This is a much more realistic interpretation of what can be achieved through argument alone. Intellectuals such as Krugman can give people more or less coherent arguments but they can hardly be expected to fundamentally alter the power dynamics within a country.

This is played out in the reception to Krugman’s arguments and books. He is enthusiastically championed by those who already believe that government must do more to combat unemployment. At the same time he is derided by those who are worried most about government debt and inflation.

Krugman’s main hope is that the people who are sympathetic to him might gain power over those who are antagonistic to him.

However, this is not the only strategy available to someone that wants to change government policy. It is after all possible to change “political reality”. For example, Trade Unions used to have much more political power than they do today. In the 1970s the “political reality” was that Trade Unions were important for policy making. Now it is not.

If you actually want to change the political reality in this way, you will not get very far by preaching to the choir. Instead you probably have to actually go out and recruit a choir.

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2 thoughts on “Why does Paul Krugman write?

  1. I agree with you mostly on this. Underlying power structures certainly must shape the way that economics gets debated in the public sphere. And I am probably in Krugman’s choir, but I have stopped reading him because I feel like in any situation I know exactly what he is going to say.

    In his defence though…there is that great Keynes quote about how “practical men, who believe themselves exempt from any intellectual influences, are usually the slaves of some defunct economist.” It is in the naturalisation of economic theory, so that it becomes accepted as simply common sense, that it takes on much of its power.

    Krugman probably knows that he does not have the ear of the administration, so cannot directly effect policy. But still, taking up a position on the extreme of an issue can have some value in that it shifts the entire spectrum. The middle ground – the muddy zone of compromise – moves further towards your own position. And it is good to have one prominent economist loudly staking out a hardline Keynesian position, if only because it helps to undermine the claim of the neoclassical freshwater crowd to be preaching straightforward economic orthodoxy.

  2. Great point.

    As you might know I did my dissertation on that exact Keynes quote, looking at how the ideas of the philosopher T H Green influenced the Prime Minister Asquith.

    Geuss in his book on politics (http://press.princeton.edu/titles/8809.html) is interesting on this as well.

    My feeling is that the causation is much more complex than Keynes describes and that Keynes (in common with most writers) overestimates the importance of writers. But, hey, that’s just me

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