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"As Krugman says, equality is not our value - it does not work."

Well, he only says that about TOTAL equality.
Which, you must admit, is not much of an incentive. If you reach the same situation whatever you do, why would you try very hard?

"I would say, if some decent standard of equality is a problem for an economic system, to hell with the economic system."

Now, this is something else entirely. Of course, there is a problem with the wording -can we call it rather a cap on inequality to some decent standard? I think you will find that Krugman advocates far, far less inequality than what we see in the developed world these days. And it has been demonstrated to work well for the economic system too, as seen in the expansion until the mid-70s, or the fact that even today, societies with a lower gini coefficient tend to do better (per head at least) than similar societies (ie let's not compare Australia and Bangladesh, please) with a higher one.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Sat Oct 2nd, 2010 at 03:06:37 AM EST
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Ok, speaking in total terms, Krugman does give some value to some equality. We know that, but he does not try to formulate that carefully. He says categorically: economics is amoral, equality does not work. Little excuses refer to the libertarian frame - the standard ethics of today. And I try to guess, how much Krugman is really doing to change the inequality standards.
by das monde on Sat Oct 2nd, 2010 at 03:28:11 AM EST
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I can think of few people in the world doing more to change the narrative.

And I reckon you read wrongly his "economics is amoral" statement. Having read everything he wrote since 2000 (OK, I haven't finished his economics textbook, but my wife bought it to learn about the subject and I did go through quite a lot of that too), I am very confident in my understanding that he makes that point to state that the fact that someone is rich does not mean he necessarily deserved it.
He even added (no later than this week) that the poors certainly did not deserve it.

It is formulated pretty clearly in my view. I don't reckon he feels any need to wear any badge of libertarianism, in fact he has pretty much ridiculed libertarianism in hundreds of pages.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Sat Oct 2nd, 2010 at 03:36:07 AM EST
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Yes, but when he says 'Sweden works, Cuba doesn't, therefore free market economies are better' his logic is hard to follow.

Firstly Sweden is more of a social democratic economy than a free market one.

Secondly Cuba's economy has always been strongly limited by trade sanctions from the US.

And finally, what does 'work' mean? Does the US economy, with its vast and increasing inequality, work according to Krugman's definition? Is it hard to imagine that there might be people in Cuba who are better off than people in the US?

The subtext is an obvious and rather naive or unquestioning acceptance of free market exceptionalism compared to the alternatives - when the reality is that in fact free market economies only 'work' in the libertarian sense of increasing inequality, to the point where inequality and autocratic top-down policy are a good effective definition of the political and financial output of a so-called free market.

Free market economies can only work if they're based on an imperial model which steals resources from other countries. Even then they blow up every few years, and they deny most people democratic participation. They're also suicidally bad at long-term planning and prone to outbreaks of corporate banditry and corruption.

That's a strange definition of 'work' - unless you start from the assumption that they're the best of all possible arrangements by definition, and work back from that.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Sat Oct 2nd, 2010 at 04:04:41 AM EST
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Krugman's fundamental difficulty in understanding the real world is that he believes that most goods and services are traded on spot markets, or in (mathematically) "well-behaved" financial systems, which means financial systems that behave like spot markets.

If real economic used spot markets, a Big Mac would not cost the same in Malmö and Haparanda...

- Jake

Friends come and go. Enemies accumulate.

by JakeS (JangoSierra 'at' gmail 'dot' com) on Sat Oct 2nd, 2010 at 05:04:27 AM EST
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"Yes, but when he says 'Sweden works, Cuba doesn't, therefore free market economies are better' his logic is hard to follow. "

But he does not say that. You are projecting your own prejudice into his quote. Therefore, and the words that follow, are yours.
I agree that Cuba is also restricted and that it plays an important part, so that it's not a clean experiment. I would argue, though, that the burden of the proof is on he who makes the claim that full equality is indeed the system maximising the condition of the worst-off in the long run.
All Krugman is saying is that there are limits to redistribution -in fact, let me quote the very previous sentence: "And before the trolls jump in to say aha, Krugman concedes the truth of supply-side economics, that's not an argument against progressive taxation and the welfare state; it's just an argument that says that there are limits."

Krugman's mention of Cuba and Sweden merely indicates that there is no obvious logical argument to reject even full equality, merely empirical ones. And he very clearly did not pick a particularly neo-liberal country as the working one.

I was going to have one chapter in this series about our embracing evidence-based thought rather than slogans and demands of ideological purity. Are you telling me that this is not a shared trait here and that you reject it? If not, what do you fault him for?

"Is it hard to imagine that there might be people in Cuba who are better off than people in the US? "
Is it hard to notice that this is a shockingly unfair point? Comparing one's maximum to the other's minimum?

"The subtext is an obvious and rather naive or unquestioning acceptance of free market exceptionalism compared to the alternatives"
Really? From someone who keeps singing the praise of social democracy and who picked Sweden as the example of a country that works, Sweden that, as you yourself said, cannot be called a free market economy?

"Free market economies can only work if they're based on an imperial model which steals resources from other countries."
This may be true, but is rather too flippant a statement to be accepted without a convincing demonstration. Otherwise it's just a slogan.

"That's a strange definition of 'work' - unless you start from the assumption that they're the best of all possible arrangements by definition, and work back from that."
Again, Krugman has written hundreds of pages slamming the direction USA were taking. Why do you project the neo-liberal agenda onto him? I can think of no reason other than the idea that anyone who does not concede the whole Marxist doctrine is an opponent to be fought.
Surely that is not your reason -but then I am missing it entirely.

Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Sat Oct 2nd, 2010 at 05:35:23 AM EST
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Where am I projecting? Krugman could have used any number of other examples - but he chose Cuba to make a point that 'there are limits'?

Is it hard to notice that this is a shockingly unfair point? Comparing one's maximum to the other's minimum?

This isn't the issue. The issue is that Cuba is in no way a conventional economy. Never mind that it's nominally socialist - it's been aggressively ostracised by its nearest and largest physical trading partner. So saying that Cuba somehow proves the limits of redistribution is a non-point.

But it's a revealing non-point. The fact that Krugman can write this, and - presumably - actually believe it, says a lot about his assumptions and the shallowness of his political insight.

This may be true, but is rather too flippant a statement to be accepted without a convincing demonstration. Otherwise it's just a slogan.

You mean apart from the British Empire, the age of colonialism in the rest of Europe, the East India Company, the oil and resource wars of the 20th century, and the US-sponsored coups throughout Asia and South America in the late 20th century?

Do I need to explain how all of these were contrived, or at least packaged as, the inevitable rational actions of nominally free markets?

You seem entirely too awed by Krugman to accept that in his environment anything to the left of a centrist solution like Sweden's is considered suicidally self-destructive by definition.

It's good that he's not a psycho-Randian like most of the Chicago altar boys, but that doesn't mean he's pushing the Overton window as hard as it needs to be pushed in the US.

by ThatBritGuy (thatbritguy (at) googlemail.com) on Sat Oct 2nd, 2010 at 07:24:22 AM EST
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In the preceeding paragraph Krugman says:

The market economy is a system for organizing activity -- a pretty good system most of the time, though not always -- with no special moral significance. The rich don't necessarily deserve their wealth, and the poor certainly don't deserve their poverty; nonetheless, we accept a system with considerable inequality because systems without any inequality don't work.

Then Krugman says:

Sweden works, Cuba doesn't.

This pretty clearly implies tht the amount of equality in Cuba is too great for the economy to work. And Krugman ignores the massive punitive behavior of Cuba's former trading partner to the north. Krugman also ignores that our economic system deliberately excludes moral considerations while having insisted on remaking the society to serve the needs of the economy. That the way in which this has been done is necessary is an underlying assumption, not a demonstrated fact. Refusing to grant the assumptions of Classical and Neo-Classical Economics has come to constitute an act of opting out of the discussion, in a Rawlsian consensus approach. That is the problem, especially when it has repeatedly been shown that the Classical and Neo-Classical approaches have major problems and little predictive power. The Rawlsian consensus has come to exclude all who do not drink the Cool Aid.

"It is not necessary to have hope in order to persevere."

by ARGeezer (ARGeezer a in a circle eurotrib daught com) on Sat Oct 2nd, 2010 at 01:55:53 PM EST
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For years I have tried to read between the lines in Krugman's writings- tried to parse out what he says that is needful to say in order for him not to lose that powerful platform over there in New York, a loss that a stronger statement might bring about, and what might be such bull as his Cuba statement.
I honestly think he sees the market model as a basically good one, and is, in the end, a tweaker.
It's just that his tweaks are bigger.

Capitalism searches out the darkest corners of human potential, and mainlines them.
by geezer in Paris (risico at wanadoo(flypoop)fr) on Sun Oct 3rd, 2010 at 06:58:54 AM EST
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There's nothing wrong with markets: it's rentier profits that are the problem.

"The future is already here -- it's just not very evenly distributed" William Gibson
by ChrisCook (cojockathotmaildotcom) on Sun Oct 3rd, 2010 at 12:49:45 PM EST
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Cyrille:
Which, you must admit, is not much of an incentive. If you reach the same situation whatever you do, why would you try very hard?

Why do indeed some try very hard at jobs where it is obvious it will not earn them more? For example teachers and nurses.

Of the top of my head and in no particular order: Work-ethics, respect of peers, pride in a job well done, the knowledge the others depend on your work.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Sun Oct 3rd, 2010 at 04:53:25 PM EST
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"Why do indeed some try very hard at jobs where it is obvious it will not earn them more?"

An important word in the above sentence is "some" -even if conceding the point that it is obvious that it will not get them (why earn? Did I at any point suggest that it was only about money?) anything, which is not the case in any hospital or school I've ever seen (to take the same examples that you took).

And of course, you are very deliberately choosing jobs that are known to nurture that kind of feeling, for which I have enormous respect, don't get me wrong.

How close exactly to 100% of society made of this kind of people do you think we are, right now?


Earth provides enough to satisfy every man's need, but not every man's greed. Gandhi

by Cyrille (cyrillev domain yahoo.fr) on Mon Oct 4th, 2010 at 01:13:02 PM EST
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