The four readings that we did in this section by Paul Krugman were Op-Ed pieces from the New York Times dealing with market failures and corruption, following revelations that Enron was cooking the books. These discussions are supposed to represent the institutionalist style of economic thought, and it is a style that stands out in American life today as we try to decide who our next leader ought to be. Many of the candidates also point out glaring market failures, and like Krugman, do not believe that government programs are inherently wrongheaded.
In order to talk about Krugman's point of view within a context, let's consider some of the ways the other styles would respond to his criticisms. Krugman is of course an established economist, trained in neoclassical doctrine, but (as was discussed in class) as a journalist or commentator in the media, has often tended to be a critic of ubiquitous free markets and a proponent of tighter or clearer regulation. In his New York Times piece on Conrad Black, he also excoriates the close association of market interests with government interests, and highlights conflicts of interest in journalism as well.
While the Moral/Critical style, Social/Democratic style, and even Marxist style would seem to encourage this sort of perspective, their response would likely range from disappointment to disinterest. Under the Moral/Critical style, the inhumanity of corporate interests like Enron would essentially be a foregone conclusion. The question for the novelist or artist would be how to best bring this criticism to the common man, allowing them to reflect on their world constructively. They would likely feel that Krugman, as an economist, was simply trying to speak the concerns of the people in a language that even the economic priesthood could comprehend.
In It Takes a Village Clinton's ideal seems to be a world in which individuals making responsible decisions hold larger interests accountable. Krugman's assumptions are actually a bit less empowering, since they seem to say that there are and always will be extremely powerful and unscrupulous profiteers who we need to regulate. Clinton is at least placing some of the emphasis on citizens, who represent the consumer base and therefore can collectively demand "good" things, like that cigarette advertising ought not be aimed at young children. Perhaps Hillary would have been disappointed with Krugman's pieces in that they assume that relatively few players are controlling the economy - Hillary's preference seems to be to focus on what people choose to demand from their companies and their governments. Krugman's preference seems to be to focus on the bad eggs that somehow prove that the whole lot is rotten and needs to be carefully controlled.
Marxist doctrine, which is essentially based upon an all-encompassing prediction that we're moving toward some "sublime" state of global collectivism, would likely view Krugman's work on Enron as foolish. To a Marxist, allowing free markets to self-destruct is a perfectly legitimate way to speed us toward collectivism - so taking an interest somehow fixing the markets from the top-down would be seen as an unnecessary delay of the inevitable.
Now this discussion was particularly interesting to me because I find almost all of it disturbing. I'll break the rules of the reader response essays and include a bit of my own perspective on this whole discussion now that I've done the necessary diagramming of it. There are very slim elements in each of these styles that I do like. From Krugman I appreciate that he is concerned with the elements in our society who benefit from our trust and then violate flagrantly. These are the people who lie and cover up. It is hard to do anything to these people after the fact though, it is merely preferable that we have a reliable way to keep them from gaining our collective trust to begin with. Traditionally, this is what professional accreditation or educational accreditation has been useful for - establishing flows of "trust capital" from one trustworthy entity to newly emerging ones who need to be vetted and approved in similar fashion. Large institutional solutions do fail, and for precisely the same reason, because they're comprised of people who we have to put our faith in. We need a better way for identifying the best, most responsible, and honorable people, not a solution that looks good on paper but may do more harm than good. Krugman may have needed to retake the part of economics that discusses unintended consequences.
I find myself agreeing with Hillary Clinton only in that I think citizens should feel empowered, either as individuals or as groups, whichever is most advantageous - and it is never just one or the other, though Hillary would likely favor groups. Economic demand, as a concept, might as well be extended to societal demand more generally. If the citizens want clean energy, and if they think it's important, then they vote with their dollars, using the Internet to funnel their consumptive power toward vendors that represent their values. This is again an issue of truthfulness - if we have producers willing to be honest to themselves, and with us, about what they believe, then there will be far less disillusionment in the economy.
Finally, the Marxists are just a funny contradiction. They have been so concerned with the manner in which economic history will unfold (deterministically, I presume) that they don't even seem to acknowledge their own impact on that history. There's no better proof that you can't make predictions about human history in a social vacuum - largely because you have to be human to make them. The only thing I find appealing about Marxism is that it does predict a bright future. I think an economics that values what people value will be bright, even if not communist. I think the hybridization of non-profit and for-profit entrepreneurship is going to make the decentralization of social works possible, and put more educational, social, and financial opportunities in the hands of individuals. This is perhaps a prediction of both extreme libertarianism and communism at the same time. Collectively, all the unique individuals will be pretty happy with what they're able to provide to one another and learn from each other. Wrap your head around that one, Marxists.
2/1/08
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