Krugman

The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than is commonly understood. Indeed the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist. John Maynard Keynes, now also a defunct economist.

Yes, I know I'm playing around with "defunct" here and sliding away from what Keynes meant, but he was being a jerk with that word, trying to assert the obvious superiority of his new way. Applied more generally, it's a good quote. Much of the following applies to him.

I read years ago a quote from a chess master “Every chess match is a furious argument about how chess should be played.” I immediately understood that, though I am not a good chess player. This is the strongest defense against that opening. You think so? I will demonstrate that your entire style, your entire approach to the game, has weaknesses that I will exploit (you bastard)! It can get personal – and it does – but there is the constant assertion of the ideology, the idea. Proponents of one style watching a game would be rooting for their method, their ideology, whether the players were Russian, Japanese, African, Israeli.

Ideologue is used almost entirely as a negative term, an insult, in our current discourse, but the above is its great strength. It is unprejudiced according to personal differences. It can create prejudices all its own, of course, and many of the great horrors of history can be attributed to this insistence that one’s idea is correct, regardless of who says it. But it is abuses by the ideologues, the other tyrannical strains they add in to enforce their belief, that are the problem. It may be that the type of person who is a purist in ideology tends more easily to have those other qualities – that is certainly the current assumption of our ideology-suspicious culture – but taken alone, being an ideolgue is not an evil thing. I would say it is a good thing. It is ultimately driven by the ideas This is true. This will work. The absence of this leaves us entirely in the realm of I have the power. I want.

CS Lewis wrote – and it has been quoted often these days

Of all tyrannies a tyranny sincerely exercised for the good of its victim may be the most oppressive. It may be better to live under robber barons than under omnipotent moral busybodies. The robber baron’s cruelty may sometimes sleep, his cupidity may at some point be satiated, but those who torment us for our own good will torment us without end for they do so with the approval of their own conscience.

This is so. (Liberals quote this thinking about sex and drugs. Conservatives about economics and regulations.) But is it not better to have no tyrant at all? The doctor who insists on his theory no matter how many patients are dying is worse than the doctor who hopes only to get rich or famous, and provides the service most in vogue among important wealthy people. Yet we may hope to find a doctor who is neither of those extremes.

Paul Krugman is an ideologue, with both the virtues and vulnerabilities of that type. He believes certain economic ideas should prevail because they are true, because they work. He supports the Obama administration’s current policies not because he is a big Obama supporter, but because he thinks they are on the right track, and in fact should go even further in their Keynesian direction. He is not an Obama shill. Were this administration to change course, he would oppose them.

He is also not one to get stuck on assigning evil motives to his opponents. He is against them because he thinks them wrong, not because he thinks they are angling for their own reward. This does begin to get fuzzy, as when it comes to putting ideas into practice, all ideologues believe that their obviously correct ideas would prevail if opponents weren’t gaming the political system to put those less-good ideas in place. Krugman is not entirely above that, but neither are his philosophical opponents. And in both events, they are somewhat correct. There are indeed people pushing for Theory A to be enacted because they will benefit from it personally. They may also agree with Theory A, but that may be largely a product of seeing their own advantage.

Acknowledgement: My separation of the field into Keynesians and anti-Keynesians, with the state-controllers tending to the former and the free marketers to the latter, is so painfully broad as to make economists shudder. It ain’t that simple. But I am talking more about Krugman than economics here, so indulge me.

From Krugman’s POV, the matter is simple: he predicted we would have a recession if we did not do some dramatically Keynesian things during the Bush administration. We were not bold enough, we did those things only half-heartedly, and we now have a recession. He considers his point proved. I can readily see why he sees it that way. But his anti-Keynesian opponents have almost the same argument. They believed we could outrun a recession if we just stopped doing any Keynesian things at all. We didn’t stop, we got a recession, and they also feel vindicated. Makes sense.

I note in passing that both sides would agree that corruption, favoritism, loopholes, and other exceptions undermine the practical effects of even their own theory and are deeply opposed to them. That’s another good thing about ideologues: they are more opposed to such deviations from the straight line than the rest of us. Yet even that has its political cost, for both see corruption and advantage-seeking to be the natural result of implementing the other guy’s wrong policies.

Our American economic policies are hybrid, usually revealed as half-hearted swings in one direction or another. In such situations, there is never a pure situation which proves one side right over the other. We are reduced to looking at tendencies and trends. And as Carl points out in the previous post, such modeling is notoriously unreliable. As above, corruption and exemptions screw up the data further.

Ideologues, including Krugman, are hugely susceptible to confirmation bias. They do not often lie, but they see events along certain lines. The bits of reality which support their POV shine out like diamonds, the other bits fall out of memory rapidly. This has the net effect of making their pronouncements not very valuable. Not that there is no truth, but that they are unreliable reporters of it. It is easy for me to see this in Krugman because I am more persuaded by long-dead economists other than Keynes. In this essay, it is almost reflexive to note that his argument is “It can’t be stimulus money that is causing the problem, because we’ve hardly spent any of it yet.” But it’s budgeted. It will be spent. Markets are already adjusting to that. People are already totting up the sums of what will be coming due. That his theory was applied inefficiently – that this administration can’t organise things well enough to direct the money quickly – is not an unreal point, but it is a small one.