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.