Krugman's prize

by Russ Roberts on October 13, 2008

in Growth

Everyone has their own least favorite Krugman quote. There was his disrespectful treatment of Milton Friedman after Friedman’s death. There was his broken window analysis of the economics of 9-11. Today, now that he has won the Nobel Prize, I’d like to remember the quote that made it clear to me that the economic way of thinking was no longer of concern to him, when he wrote in the New York Times Sunday Magazine:

Although America has higher per capita income than other advanced
countries, it turns out that that’s mainly because our rich are much
richer. And here’s a radical thought: if the rich get more, that leaves
less for everyone else. That statement — which is simply a matter of arithmetic — is guaranteed to bring accusations of ”class warfare.”

I’ve talked to a number of people who are depressed and angry at Krugman’s prize.

For me, it is just another reminder that those of us who believe in liberty are in for a long time in the intellectual wilderness. Today’s intellectual climate is a taste of what it must have been like to believe in liberty in 1933, or what it must have been like to be Milton Friedman in say, 1962.

I think things are much better today. We have many more outlets for spreading the virtues of freedom than we had in the past. I take solace in the fact that the average American today has a much richer understanding of the case for liberty today. And I take solace in what Milton Friedman said when I interviewed him in August of 2006 and commented on how topical Capitalism and Freedom still is. His response:

The basic principles that we believe in are going to stay the same for
the next thousand years. That aspect of it will never go out of date.
What goes out of date are the particular applications. We still find
Adam Smith’s book, Wealth of Nations well worth reading even though it’s published in 1776.

So if you love liberty and fear those who would engineer our well-being rather than let it emerge from our free choices, if you love liberty and fear those who would use good intentions as an excuse for plunder, don’t worry. We’ll have our day down the road. Keep reading and writing and thinking. And don’t yell. Above all, smile and hold firm to your principles. They will be remembered and valued when the pendulum swings the other way. It’s just a matter of time.

Postscript (HT to Charlie and Sanjiv in the comments):

I’m not saying Krugman got the prize for his partisan advocacy. I have no idea. And I am not commenting on the quality of his academic work which I am not sufficiently familiar with to judge. What is unfortunate is that someone whose economic statements I mentioned above will be called a Nobel Laureate. And what is more unfortunate is that someone with his policy outlook (at least as it is articulated in his recent popular writing) which is hostile to liberty, will have a larger soapbox.


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