Gintis on Krugman

On my way through page three of Gintis’s reviews I came across a fascinating and disgruntled review of Krugman’s Conscience of a Liberal. What’s interesting is that as Gintis subsequently makes clear in comments, he’s an ideological friend of Krugman’s who nevertheless thinks that Krugman has made himself a party hack. I think this is a tad misguided, because I see Krugman as responding to what seem to me to be quite extraordinary excesses of what he calls ‘movement conservatism’. It is in the context of the outrageousness of this that Krugman says that to be a ‘liberal’ (in the American sense) is to be a partisan. In the context of a situation in which Bush and Cheney might be better placed in the slammer for corporate crime before they arrived at their high office, and at the very least run out of town for impropriety, rather than finding themselves as President and Vice President, Krugman’s partisanship makes sense to me.

Still Gintis’s criticisms are pretty worth putting on the table, though as the first comment after the review makes clear, Krugman’s he might be misrepresenting Krugman’s policy prescriptions a tad. There’s more overlap between Gintis’s proposed policy prescriptions and Krugman’s than he lets on. But Gintis’ main gripe is much more interesting, which is that Krugman’s ‘typically liberal’ position is too abstract in its focus on ‘inequality’ for it to be a useful focus of a political movement – that conservatives ‘get’ that politics is about social ethics, and liberals don’t. They think it’s about abstract notions like ‘inequality’. It’s an interesting argument which I find very compelling whatever it’s relevance to Krugman. (Professor Gintis, since you mention what is important in politics, one is the anger of one side against another when that other has abused the trust and goodwill of the community. Krugman has been a great expositor of the case for that anger.)

Anyway, here is Gintis’s ‘clarifying’ comment in the comments section, which I’m reproducing first because it sets the scene, and then I’ll reproduce his review – which includes a clarifying postscript – beneath the fold.

Frankly, I do not know why people don’t care much about inequality. But, it is true. In fact, my reading of history is that “inequality” has never been a politically motivating iussue since the evolution of settled agriculture (hunter gatherers were probably very egalitarian — See Chris Boehm’s Hierararchy in the Forest).

People strike back at what they perceive to be injustices. Having a lot of money is not an injustice. To repeat an idea from my review: people hated the Robber Barrons because they were robbers and barons, not because they were rich. The labor movement was strong when it was perceived that firms were making superprofits that could be more equitably shared with the workers. Gender inequality and racial discrimination are opposed because they are unfair, not because they lead to an unequal division of wealth.

Politics is about ethics, above all. This is what the liberals do not get.

Actually, liberal ethics are highly laudable from my personal standpoint. The envirionment, poverty, discrimination against minority life-styles, and the like are very important and progressive issues, and the women’s movement is simply the most progressive and important movement in the world today. But, these issues don’t win many elections these days, so the poor democrats have to find something they think will resonate with the voters — soak the rich seems to be it.

Can you imagine that the Democrats have a chance of losing the next presidential election, given that the current regime is about the most abysmally performing government ever? I have never voted Repulbican, and third party people like Nader are worse than cancer (they gave us George W., after all). But I have to take deep breaths and think about other things when I pull the Democratic level in the voting booth.

And below the fold the review itself with its occasional spelling mistakes intact.

“Being progressive,” says Paul Krugman in the concluding pages of The Conscience of a Liberal, “means being partisan.” Like Krugman, my training lies in economics, but unlike Krugman, I am not partisan. Rather, I take a policy orientation to social issues: there are problems to be solved in order to enhance the lives of citizens, and it is our job to discover and publicize solutions to these problems. Krugman’s partisan stance only clouds the issues. For Krugman there is a “union movement” rather than a “bureaucratic labor aristocracy,” critics of the welfare states want to “turn back the clock,” rather than streamline and curb the inequities of the welfare state, conservatives have won by “exploiting cultural backlash” rather than by mounting a principled opposition to the explosion of crime, drug abuse, and single-headed households in a manner that resonates with the voting public. Critics of the wealth tax are “financed by a handful of [super-rich] families,” with the public being ignorant dupes of the slick politicians.
This book epitomizes what is wrong with American liberalism. Krugman was a fine, perceptive international trade theorist, but he is a political hack, with nothing new to offer. There is one problem as far as Krugman is concerned: inequality. But inequality is an intellectual abstraction, not a politically motivating issue. People hated the Robber Barons because they were robbers and barons, not because they were rich. Oprah Winfrey and Bill Gates do not send the Pinkerton men out to protect their ill-gotten gains; nor to the other super-rich. Socialists’ ringing political slogans dealt with fairness, social progress, and power to the people, not “inequality.” Moreover, a truly progressive movement must built on technical progress that is impeded by the reigning powers that be (Sam Bowles and I call this efficiency-enhancing egalitarian redistribution), not the beggar-thy-neighbor, zero-sum-game sort of redistribution favored by Krugman.

I suspect Krugman is correct in saying that the degree of inequality in the USA today is the product of politics, not economic necessity. This is because some advanced industrial countries have more equal distributions of income and wealth that the USA (e.g., France, Germany). But, these countries are plagued by bureaucratic inefficiency and deeply threatened by the “lean and mean” up-and-coming countries like Poland, the Baltic States, Romania, India, et al. The USA has purchased a thriving economy and full employment at the cost of having a bunch of super-rich families. Not a bad deal, after all.

Krugman’s vision for the future has three key premises, all wrong.

First, he believes progressives can win on a platform of redistributing from the rich. However, no one cares about inequality. People care about injustice, unfairness, poverty, sexual predators, family values, gay marriage, terrorism, and many other problems of everyday life. People don’t care about Gini distributions and other abstractions. Moreover, Krugman should know that if the wealth were redistributed to the middle class, the US investment rate would fall, since the rich save their money and it is translated into investment, whereas the middle classes would spend their gains on consumption, thus driving out investment. A “soak the rich” policy simply cannot work to the advantage of the middle classes.

Second, Krugman would strengthen the labor unions, which he credits for their egalitarian effects. However, unions were strong only when industry was highly non-competitive in such areas as automobiles and steel. The oligopolistic character of mid-twentieth century industry, with a few countries in the lead, made fighting over the excess profits highly rewarding. With globalization, there are no excess profits to be fought over. Thus, it is not surprising that most successful unions in the USA are public service, not private (e.g., teachers, government employees). There is no future in unionism, period.

Third, Krugman believes that liberalism can be restored to its 1950’s health without the need for any new policies. However, 1950’s liberalism was based on southern white racism and solid support from the unions, neither of which exists any more. There is no future in pure redistributional policies in the USA for this reason. Indeed, if one looks at other social democratic countries, almost all are moving from corporate liberalism to embrace new options, such as Sarkozy in France (French socialists have the same pathetic political sense as American liberals, and will share the same fate).

I am sorry that we can’t do better than Krugman. There are very serious social problems to be addressed, but the poor, pathetic, liberals simply haven’t a clue. Conservatives, on the other, are political sophisticated and hold clear visions of what they want. It is too bad that what they want does not include caring about the poor and the otherwise afflicted, or dealing with our natural environment. Politics in the USA is no longer Elephants and Donkeys; it is now conservative Pigs and liberal Bonobos. The pigs are smart but only care about what’s in their trough. The Bonobos are polymorphous perverse and great lovers, but will be extinct in short order.

I am adding the following remarks on December 19, 2007 in response to some of the personal and public comments on my remarks. These should be seen as clarifications.

Many commentators consider my remarks on Krugman’s partisanship as unwarranted because Krugman has always spoken his own mind, and has never toed the (ever-changing) Democratic “party line”. For instance, it is widely thought that Krugman was passed over by Bill Clinton for heading the Council of Economic Advisors (in favor of Laura Tyson) because of Krugman’s opposition to “industrial policy.” Now, thankfully Clinton did not follow the “industrial policy” suggestions of Robert Reich, Robert Kuttner and others, but we must thank the forceful interventions of Krugman (and others) for exposing “industrial policy” for what it is—mainly an unsupported set of statements that would likely have weakened the American economy considerably.

Partially because of the adament opposition of key Democratic economists, including Krugman, Clinton opted for a sound economic policy—one of the strongest points of his adminstration. But now, industrial policy is not fashionable, and protectionism has not been a major part of Democratic political philosophy, pace Robert Kuttner. Indeed, as far as I can tell there are no issues of fact that separate Republic and Democratic policy thinkers concerning the running of the economy. More broadly, burning political issues of domenstic social policy today revolve around values and not facts, and around the personal characteristics of politicians rather than the economic models that they embrace to deal with setting a policy agenda for the country. In this setting, it is not surprising that Krugman would become a partisan political actor, as I have suggested has happened. At any rate, I am virtually certain that should really stupid economic ideas pop up as the Presidential race heats up, Krugman would come out fighting, at the cost of his credibility with some Democrats, in favor of economic realities.

Some have asked me what Krugman should be stressing, if not redistribution of wealth and income. Here are some suggestions. First, a vision of national health insurance that answers the (legitimate) objections of its critics. For instance, instead of single-payer, perhaps state-by-state regulation of universal care, much as current welfare and automobile insurance. Second, he should come out in favor of school vouchers and charters, and otherwise suggest how to make the educational system more competitive. Third, he should embrace faith-based interventions into community service, especially as concerns the urban poor. Fourth, he should propose a national system of apprenticeship skill acquisition, whereby firms are subsidized when they train their workers (government intervention is needed here because once trained, the worker can simply leave the firm for higher wages). Fifth, he should propose a plan for promoting minority entrepreneurship. This is of course a land mine, because it is so subject to corruption and unfairness.

However, there are some degrees of freedom in this area, such as promoting minority business networks, specialized vocational training for minority entrepreneurs, and the like. Sixth, he should propose a precise way forward in dealing with environmental issues (nuclear, solar, coal, oil, endagered species, etc.) There are many people working hard on these issues whose ideas never get beyond the scientific conference and the pages of the Proceedings of the National Academy of Sciences, and their ideas are often very sound. Seventh, promote the labor market and educational policies of Nobel prize winner James Heckman and others who have a good take on the numbers and what forms of intervention are likely to be fruitful.

But most of all, Progressives need a vision of what real contributions we can make to improving the lives of Americans and the citizens of the world. Income redistribution away from the very rich may (or may not) necessary to achieve this vision, but Krugman’s beggar thy neighbor ideas are insipid and counterproductive.

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Stewart
13 years ago

I’ve read this piece skimmingly, not being an economist and not being too much up on, or interested in, US domestic policy. I’ve read Krugman’s The Great Unravelling, and enjoyed his anger at Bush and Cheney’s depradations, and was naturally more interested in it from a US foreign policy perspective. I’d just say a couple of things – Gintis is surely right to want to focus on solutions than carping criticisms, but Krugman wasn’t criticising carpingly, he was often engaged in outraged exposes of truly criminal behaviour – and he does seem to have a handle on solutions, even if i can’t always follow them. Second, Gintis makes the absolutely correct claim that politics is all about ethics, then claims that ‘liberals don’t get this’. Really? My view would be that anybody who didn’t get this could hardly be classed as a liberal. Of course this connection dates back at least to Aristotle, who I prefer to think of as a liberal philosopher, but then i was never an ancient Greek slave…

JM
JM
13 years ago

I’m not impressed.

Gintis draws a prima facie reasonable distinction between inequality and injustice, sets Krugman up as an exemplar strawman, and then knocks him down by demanding (“some have asked”? c’mon) that Krugman accept Gintis’ stupifyingly small beer agenda:-

* health insurance like auto insurance (ie. not attached to employment)
* school vouchers
* faith based charity
* indentured apprenticeships
* “minority entreupeneurship” (a shoeshine stand perhaps?)

ie. a step back to pre WWII

Why would anyone go for that?

Which led me to think about the gambit (inequality/injustice). On reflection that strikes me as a distinction almost without a difference. A political activist would focus on injustice as an organizing principle, but Krugman is an economist – why shouldn’t he focus on the quantifiable aspect – inequality?

What stunned me in reading this was the disconnect between the opening gambit and the complete banality – and stupidity – of the “solutions”

Sorry, Nick, I haven’t heard of Gintis before but thanks for pointing him out, I know now to avoid him.

Richard Green
Richard Green
13 years ago

Maybe there’s an element of personal animosity, which Krugman is adept at inspiring!
In this case the snide and vitriolic attitude Krugman has towards the heterodoxy of which Bowles and Gintis (I can only ever name them together) are one part of, particularly when contrasted with the constructive and civil disagreement shown by other parts of the liberal wing of orthodox economics like Joe Stiglitz. The intolerance for, or at least blindness to a diversity of views is not only an irritating trait of Krugman’s, but also hinders his research, resulting in pointless jaunts like New Economic Geography.

So we can understand some spite on Gintis’ part.

Which doesn’t detract from the fact that much of what he says is correct, and reminds us that American liberalism may have fallen into a hole, being a mirror image of the new right, focused on totemistic policies and issues and shrill polemics.

It almost makes Australian politics inspiring…

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13 years ago

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