EconoMatters

Paul Krugman’s Self-Protectionist Moment

The economist inadvertently puts a spotlight on everything wrong with his profession and with himself.

Credit: swisseconomic www.flickr.com

Takeaways


  • Paul Krugman inadvertently puts a spotlight on everything wrong with his profession and with himself.
  • Some elites in the economics field now admit they were wrong but claim policy is locked in.
  • Krugman may slip into a new skin, but he still defends those who were wrong and attacks those were right.

Paul Krugman has a new op-ed (“A Protectionist Moment?”) in which he tries to walk away from his own contribution as an elite trade economist to the damage done by globalization, while also continuing to lend his political support to Hillary Clinton and the neoliberal globalization wing of the Democratic Party.

His article inadvertently spotlights all that is wrong with the economics profession through the lens of the trade debate.

On one hand, Krugman writes, “So the elite case for ever-freer trade is largely a scam, which voters probably sense even if they don’t know exactly what form it’s taking.”

On the other hand, he writes “In this, as in many other things, Sanders currently benefits from the luxury of irresponsibility: he’s never been anywhere close to the levers of power, so he could take principled-sounding but arguably feckless stances in a way that Clinton couldn’t and can’t.”

Krugman has been a booster of trade and globalization for thirty years: marginally more restrained than other elite economists, but still a booster.

Now, the political establishment has what it wanted and the effects have been disastrous for those not in the top 20% of the income distribution.

Attempt at re-invention

At this stage, as exemplified by Krugman, the economics elite is moving to reinvent itself with a combination of minor backpedaling and its own studies that belatedly acknowledge the damage wrought by globalization.

There is no professional cost to be paid for the grievous injuries that his studies may have helped inflict and there is no mention of the fact that outsider critical economists have long predicted and written about these injuries.

The policy recommendation is that we must stay the course because we are now locked-in and have few options.

The elite’s analytical record can be compared with critical economists, like Robert Scott of the Economic Policy Institute who has accurately and persistently tallied the job costs of globalization to the U.S. economy for over two decades.

As regards my own work, here are links to two 1994 articles, The Free Trade Debate: A Left Keynesian Gaze and Capital Mobility and the Threat to American Prosperity, which I think got the analytical and policy issues substantially right.

Double standards?

Krugman’s self-protectionist moment is another example of gattopardo economics, whereby the mainstream economics profession changes to keep things the same.

Even as he tries to slip in to a new skin, the politics remains unchanged. Senator Sanders, the longtime opponent of neoliberalism, is described as irresponsible and feckless. Hillary Clinton, the longtime advocate of neoliberalism, is portrayed as a model of trade policy responsibility.

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About Thomas I. Palley

Thomas I. Palley is an independent economist in Washington D.C.

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