This post by Don Boudreaux really helps me understand his antipathy towards Paul Krugman’s modern writing.

Essentially, Boudreaux point is that Krugman undermines the long project of getting people to understand how and why free markets increase human welfare. This is because Krugman spends the majority of his time pointing out cases where the free market is a detriment to human welfare.

The concern here is clearly understandable.

It also brings to the forefront a key question: is “defending” the free market the primary role of public economists today.

The issue is that just about all modern intellectual elites are in agreement about the core welfare enhancing properties of the market. Not only economists and policy wonks but the majority of elite economic journalists.

What I take to be the Krugman/Keynes position is that the real threat to the free market comes from succumbing to policies that in practice don’t produce real gains for much of the electorate.

Not only does this result in real human suffering but it undermines public support in the market. For example, when median incomes were rising public support for free trade was high. As they began to stagnate and fall, it fell.

d_iq6_uslugkibaxbwtndg

Thus the practical way to get support for free trade is to make sure that median income rises.

This might, for example, mean more aggressive monetary policy than you would otherwise support or more intense redistribution that you would otherwise support.

About these ads