I honestly don’t know very much about Paul Krugman. He’s a statist, he’s a liberal, and he’s an economist. These factors don’t make for a very winning combination among the libertarian circles which I frequent. Exactly for this reason I actually don’t know whether or not I’m predisposed to be unsympathetic towards Professor Krugman, because while I’ve been exposed to a good deal of anti-Krugman sentiment, I feel that I mustn’t disregard such a prominent economist without a fair trial. This is really my first actual experience with Krugman’s work, other than bits and pieces of his economic writings, none of which I found too offensive. Recently, however, I read a short piece by Krugman which I did find quite offensive. It’s an opinion article Krugman wrote for the New York Times. The name of this article was The Twinkie Manifesto.
Here’s the article summed up and dumbed down in a handful of sentences: Hostess is being a jerk and was popular in the fifties, so let’s talk about the fifties. In the fifties a lot of things were bad, like racism and sexism. However, the fifties show that high tax rates aren’t bad. The tax rate for the highest income earners were extremely high and labor unions had a lot of power, but things prospered. This is contrary to everything that the right says, yet it shows “that economic growth and economic justice are not incompatible”.
There’s several things which I really dislike about this article, the smallest, but possibly the most aggravating of which is that it really has nothing to do with Twinkies, or the current debacle with Hostess, it’s just a catchy title. If you’re going to name an article after a reasonably important current event like this then it would seem fitting to actually connect what you’re writing about back to that event. It would have only taken Krugman two sentences to have linked his article to the cream filled affair which is going on right now, yet he fails to do so. This means the article has nothing to do with Twinkies or Hostess, mentioning Twinkies is just a fancy way for Krugman to get his time machine out and talk about the fifties, telling a story which many a liberal has told before: tax rates were very high but everything was great. Perhaps this detail can be overlooked, however. It’s usually wrong to criticize a work for not spending enough time talking about Twinkies, so let’s move on.
Another thing which struck might strike readers is how uninspiring this piece was. Fine, it’s a small opinion article, he probably writes at least several dozen of these a year, yet the writing isn’t that good, it’s nothing special, and neither is the content. The article, written by this PhD and Nobel Prize winner, is nothing that couldn’t have been written by an amateur liberal journalist, or really any liberal who’s at all decent with words. This seems like something very trivial and unimpressive for a piece published in one of the largest and most academically respected newspapers in the world. I’ve seen better pieces of writing and much more inspiring little “manifestos” on political forums by academic nobodies. Surely a winner of the Nobel Prize can produce something of true quality and merit if his work is to be read by hundreds of thousands, yet this would appear not to be the case. Instead Mr. Krugman rehashes a story which is old news to everyone in the debate, and he does so in a way which is pretty uninspiring. Now let’s discuss the actual content of the work.
The word that kept springing to mind as I read Krugman’s article was, as you might have guessed, “liberal”. This article embodies many of the trademarks of liberal thought in our day. Liberal thought is often arrogant, simplistic, and confused. It was extremely arrogant in the way that it talked about social justice, appearing to take glee in the misfortunes of the wealthy:
“Squeezed between high taxes and empowered workers, executives were relatively impoverished by the standards of either earlier or later generations. In 1955 Fortune magazine published an essay, “How top executives live,” which emphasized how modest their lifestyles had become compared with days of yore. [Emphasis Added] ”
Fine, when he says “impoverished” he’s talking about decreasing the size of your private boat and having a house that isn’t a mansion, but it is still extremely mean spirited. This sort of writing is entirely representative of the liberal attitude that because someone is rich they should be made poorer and that the silly pursuits like mansions and nice dinners which they like to spend money on are nothing compared to the needs of the humble, neglected masses. This is one of the things which would appear to contrast modern and classical schools of liberal thought more than anything else: the old liberals saw a universal harmony of interests between all, or at least nearly all members of the market economy, while modern liberals see an inherent conflict between the rich and the poor.
“in 1955 the real incomes of the top 0.01 percent of Americans were less than half what they had been in the late 1920s”
The market economy naturally increases the incomes of everyone, and that should be the focus of benevolent and humanistic people. I don’t see why you should celebrate anyone’s income falling unless you dislike that person or the way that they obtained the money. I believe that there’s nothing wrong with being rich, nor that there’s anything wrong with receiving the profits of your company. I don’t know what the problem is with either of those things so long as neither force nor fraud got you to that point. At the same time that Krugman talks about how some groups (minorities) were unfairly oppressed he seems to take pleasure in the fact that another group is being hurt, presumably because by harming them we have made society more “just”. I have seen this from most liberals I have ever talked to; a clear disdain for the rich and an implicit belief in free-market class struggle.
Let’s return to my earlier point where I accused liberal thought as being generally simplistic and confused, something present within the article. Part of the reason is that it would seem that Krugman, along with most other liberals, has no actual code of ethics as such. Ever since Biblical times there has been a general disdain for the rich and adoration for the poor, but this is merely an ethical system which is inherited, not reasoned out. There must be more to right and wrong than that one has been told all his life that he should care for the poor. By this same token Krugman implicitly falls victim to the irrationalist doctrines of racist ethics. The racist is the outcome of his unreasoned ethics, given to him by those around him, just as Krugman is the outcome of the altruistic and childish morality the modern day. If morality is to guide our actions then surely there is a more noble and rational principle than the simplistic idea that the poor are good and innocent while the rich are bad and guilty. That isn’t a real ethic; that’s a cultural bias.
The arguments of Krugman and most other liberals should appear as simplistic and confused to anyone who understands the basic tenets of Austrian Economics. Liberals seem to assume that the social sciences follow after the methods of the natural sciences. They believe themselves to be educated and to understand issues because they have “looked at the data”, yet this belief represents view of the scientific method and reality itself which is both confused and simplistic. Krugman never once gives an argument as to why taxing the rich doesn’t decrease growth, or as to why the “conservative” predictions on the matter are wrong. This Nobel Prize winner can’t even be bothered to describe why the existence of labor unions matter when according to basic supply and demand theory labor unions should either just increase the speed of wage rates adjust, or provide increased wages to some and decreased wages and unemployment to others.
What happens happens, and it happens for a reason. Data taken from the non-repeatable scenarios of human society, when separated from sound economic theory, doesn’t get us any closer to understanding why something happened, let alone helping us to understand economic law. Professor Krugman disregards this and continues to spout off statistics which are meaningless by themselves, and aren’t any less meaningless by putting claims in-between the statistics. Citing data which doesn’t contradict assertions, while in the absence of reason, doesn’t make one intelligent or correct, it just makes him a fool who misunderstands science itself.
But hey, maybe there’s something to this empiricism, maybe it is mature, and the only way to look at human society since anything not backed up by the “cold hard facts” is downright religious and non-scientific. In this country we’ve seen many great periods of high growth. We’ve also seen the fortunate oppression of minorities, especially black people. Starting later in the nineteen fifties, and gaining speed on into the sixties, we’ve seen increasing liberation of minorities and African Americans. This culminated in the stagnation of wages we’ve seen since the nineteen seventies, as African Americans were given ever greater political rights, began assimilating with whites, and even began to interbreed in some cases. At the same time more Hispanic immigrants began pouring into the country, sowing the seeds of economic disaster. In fact when we saw America’s first black president we saw a deep recession, political strife, an increasing deficit, relatively stagnant unemployment numbers, and a weak recovery. How could the data be any clearer? The only way to get this economy back on track is to restore Jim Crow and start mass deportation/total sarcasm.
Claims of this ridiculous nature are similar to what would come out of a consistently applied empiricist worldview, yet neither Krugman nor anyone else would ever use this type of argument because it is ridiculous and, not least of all, because it interferes with their ethical beliefs. While the above argument is obviously fallacious, it uses the same logic Krugman is using in his entirely empirical argument. The major difference here is simply that while the argument above can be easily refuted, the holes in Krugman’s claim aren’t quite as easy to spot.
Even if we assume that Krugman has sound theory backing the content of the Twinkie Manifesto which he simply doesn’t elaborate on due to size constraints, it’s still a bad, and even dangerous piece. What sort of impression does this simplistic and unreasoned methodology give to anyone eager to spread Mr. Krugman’s word? It would indeed seem to support an unthinking attitude, a nonsensical hyper-empirical methodology, and the simplistic liberal worldview which I have criticized above. Even worse, someone eager to better understand economics might actually disregard the basic ideas of supply and demand in favor of Krugman’s apparently pre-marginalist analysis of distribution. Krugman does a disservice to economics, scholarship, and intelligent political discussion by constructing his argument in the way that he does. Anyone who claims to be an economist must provide more than data and a claim; he must provide an actual analysis of events.
Another little detail which also sets me off in his “manifesto” is when he mentions Ayn rand, relating Eisenhower’s America to the world of Atlas Shrugged (since both were supposedly anti-rich). He also states that certain Republicans like Paul Ryan champion Rand’s message on the political stage. Both claims are equally ridiculous. Rand speaks remarkably little of taxes in Atlas Shrugged. The crisis of Galt’s world was caused much more by ridiculously extensive and intrusive government regulation and an anti-productive sentiment than anything dealing with taxes. The fifties was a decade which saw a smaller government and many fewer regulations than modern America, and I’d daresay that, insofar as this can be compared between time periods, there was a lot more respect for earning wealth and becoming rich, as well as in hard work itself, than there is today. Not only did this attitude and lack of regulation surely help spur economic growth as more people were busy attempting to create their own businesses, work longer hours, and saving and investing their money, but this is also a far cry from Rand’s anti-capitalistic dystopia. The ridiculousness of equivocating Republicans to Objectivists should be obvious since Rand repeatedly lambasted Republicans as theocrats. Even more importantly many Objectivists show clearly oppose the GOP’s pro-big business, pro-war, anti-civil liberties, and pro-religious agenda. This is sort of ridiculous conflation that comes from the left at the same time that Krugman himself is complaining that those on the right foolishly label everyone on the left as “socialists”. This is all too representative of the hypocrisy of modern discourse.
Krugman ends his manifesto by talking about economic growth and economic justice, yet from the way he writes in this article I would be very hesitant to trust him on either issue. He appears quite depraved when talking about the issue of economic justice. He is intent upon punishing the rich, not just on taxing them more. While there may indeed be good arguments for the progressive income tax as a preferred method of taxation, there are few arguments which can justify Krugman’s level of malice, especially when dealing with ideas he hopes will end up as public policy. Personally I feel that if taxes must exist, it is generally preferable that they be moderately progressive, because in general and by and large a greater percentage of a poorer man’s income will be spent upon things which we see as necessities, and the basic fruits of the modern economy, while the rich do indeed generally spend on relatively more extravagant luxury items. This is an unscientific and arbitrary normative claim on my part, yet it is one which I hold for reasons which should be obvious. This is not the argument that Krugman appears to be presenting. He doesn’t even talk about tax revenue, or how the poor need money more. No, it appears that the rich are guilty of the sin of being rich and that extracting every cent from them as possible is itself social justice. I want to make it very clear that I believe firmly that there is no situation outside of a state of dire crisis where robbing a man of nine out of every ten dollars he has made through voluntary exchange can be considered justice. I wonder what school of philosophy Professor Krugman derives his sense of justice from. I would be amazed if it’s not the same simplistic, populistic, unphilosophical, and ill-assumed place he obtains his economic methodology. There seems to be no true analysis or compelling moral argument in Krugman’s worldview, just the pro-poor and anti-rich sentiment of many liberals.
At the same time Krugman fails to provide a compelling economic case for the progressive taxes he so desires. He relies upon blind empiricism rather than even basic arguments. He would appear to reject supply and demand in his defense of labor unions, and I have a very hard time buying that a ninety percent income tax wouldn’t dramatically reduce investment from the strata of society which tends to invest the most. He also happily ignores the idea that anything might have changed since the fifties in terms of attitude and economic factors. Without explicitly stating it, Krugman implies that the economic prosperity of yore and the downturn of our day was caused by the impoverished rich and the “coddled” rich in their respective time periods. I am sure that regulation, Federal Reserve policy, federal spending, and other side-effects of the welfare state have nothing to do with the prosperity of either period.
The Twinkie Manifesto is a short article which I have just written a lot about, yet it would seem to me to be its own tiny insult to both morality and economics. I honestly hope that I have somehow mischaracterized Mr. Krugman, and that I will be more impressed by any of his work I read in the future, for if this is the level of material modern academia truly has to offer (and I’m increasingly frightened that it is) then mainstream discourse has fallen to a very low pit indeed.