Free Markets, Free People


Krugman’s latest pearls of wisdom

I noted yesterday that one of the more prolific hacks left off of Alex Pareene list (link in previous post) at Salon was Paul Krugman.

QandO has a long history of examining Krugman’s political thoughts and finding them mostly wanting.  That’s not to say he’s a bust at everything he does – when he just talked economics he had some interesting things to say.  But his venture into political advocacy has, shall we say, not helped his overall reputation in the least.  One of the reasons is he’s prone to saying things like this:

The rich don’t necessarily deserve their wealth, and the poor certainly don’t deserve their poverty.

Don’t “deserve” wealth or poverty according to whom and by what standard, Mr. Krugman? 

Who gets to decide what is or isn’t “deserved” if earned or obtained legally?  And how does one make the blanket statement that “the poor certainly don’t deserve their poverty?”  That, in many cases, is demonstrably false. 

If we agree we are the sum of our choices in life, and those who’ve made consistently bad choices (drop out of school, take up drug use, commit criminal acts) end up in poverty, how is it they don’t “deserve” what they now suffer?  Certainly I can think of examples of the poor who may be poor through no real fault of their own – the mentally deficient who haven’t the skills to earn high wages, etc.  But for the most part, if everyone is offered essentially the same opportunities as others and they choose not to take advantage of them, how does one relegate their descent into poverty as “undeserved”?  Especially when others in precisely the same circumstances make different decisions that raise them out of poverty?

What, in fact, that statement is meant to reflect is Krugman’s apparent belief that wealth is unequally distributed not because it is earned, but by an immoral and unfair system that needs to be fixed. 

The market, in Krugman’s world, arbitrarily picks winners and losers and rewards them at whim apparently.  Thus most of the rich and none of the poor “deserve” their financial status.

So this should come as not surprise:

Allow me to make a point: Economics is not a morality play. It’s not a happy story in which virtue is rewarded and vice punished.

The market economy is a system for organizing activity — a pretty good system most of the time, though not always — but not according to any moral significance.

Really?  So nowhere in such an economy is honesty, fairness, good customer service rewarded with business over competitors who exhibit none of those virtues?  Instead, it’s just a “system for organizing” where consumers buy from which ever vendor they first come upon without ever once considering those virtues as a reason for buying?  Does the system punish those who act in what one could consider an “economically immoral” manner – i.e. in violation of the laws of economics” or screwing over customers?  Does it not mostly reward those who act in a manner that most pleases their customers and helps their reputation?

How is that not evidence of a moral code operating within a given market?

Well of course it is – but such a code is inconvenient to the Krugman’s of the world, because admitting that markets, unimpeded by government intrusion, would reward or punish those who transgress its laws would mean the argument for more government intrusion would fall flat.  And certainly, admitting that the rich “deserve” their riches as much as many in poverty “deserve” their poverty would again admit to a morality that precluded government making everything “fair” by it’s attempts to redistribute that “undeserved” wealth.

Those key premises are what Krugman and much of the left base their criticism of capitalism on, never once admitting that a) capitalism as it should exist doesn’t and  b) the reason the markets may not seem to be “working” is because of the amount of distortion they already suffer from government intrusion.

Of course, it is the age old cycle many of us have come to understand – government declares something to be a problem, declares it is the solution, exacerbates the problem and again declares only it can fix it with even more intrusion. 

“Morality” is, at a base level, “good and bad”.  We label what we deem “good” as moral.  The bad stuff is “immoral”.  How one can observe real markets at work, where the basic transaction is a voluntary exchange of goods for money between two people (entities) and not recognize the basic morality of such an act wouldn’t understand morality if it bit them on the leg.   Billions of those transactions will happen on this, Black Friday.  Consumers will go to stores they trust from experience, buy from vendors with good reputations and the best customer service and reward them with their business.  That decision is one based in morality in which the consumer weighs the options and picks the vendor who best exemplifies their moral ideal in the marketplace.  If they’ve been burned in the past by store X, that store most likely will not get their business – a decision based on the moral judgment of the consumer.

How a so-called economist doesn’t understand the basic morality of markets seems a bit beyond me.  Which is why I put Krugman in the hack category.  That morality, which is plainly evident to me, is inconvenient to Krugman’s thesis that government must intervene in the economy.  He can’t really point to any success stories (well he tries by saying, finally, that massive government spending for WWII brought us out of the Depression and that’s suspect), so he’s left trying to explain why it is government’s job to save us from the inherent unfairness of the market.

You have to leave a whole bunch of stuff out to do that.  And you have to establish nonsensical premises like “the rich don’t necessarily deserve their wealth, and the poor certainly don’t deserve their poverty”, in order to advance your government intrusion thesis.

Thus the cycle repeats – government is again the only solution to the problem government created.  After all, the markets put us 14 trillion in debt, not the profligacy of government – or so I fully expect Krugman to explain in some future bit of nonsense in the New York Times.  It would make about as much sense as this nonsense.

~McQ

  • Facebook
  • Twitter
  • LinkedIn
  • Tumblr
  • Digg
  • Reddit
  • email
  • Print
  • Google Bookmarks

21 Responses to Krugman’s latest pearls of wisdom

  • “…the poor certainly don’t deserve their poverty.”
    Of course, Krugman is doing the Collectivist exoneration thing.  Criminals don’t deserve to be punished.  Enemies need to be understood and placated.  People who hate America have a point of view (and all those are equally valid).
    To be sure, “the poor” don’t all EARN their poverty.  But they also don’t stay impoverished in America for long.
    Some of “the poor” certainly DO EARN their poverty…they make a set of concerted choices every day to assure they will be…and remain…poor.  But they CHOOSE poverty, and they get it.  That is not some wrathful punishment…it is pure cause and effect.  Which Krugman and the Collective hate and try to suspend with irrational and destructive dreams that we know cannot work.
    Those who love liberty and people know we cannot suspend cause and effect, and that to try is a form of cruelty.  We DO believe in trying to mediate and mitigate the full brunt of the harsh reality of life, and American history is bright with people forming voluntary organizations to effect that.
    Some of us have also learned that…SOMETIMES…helping is not helping.  People NEED to learn from their conduct, and they are capable of learning.  They also deserve the dignity of being left to govern themselves (when they do nothing criminal).  Krugman and the Collective would take all those things away…along with the production of productive people.

  • You’re thinking too hard.  It’s all really quite simple.

    Krugman is projecting.   He’s thinking of himself and his scam ‘analysis’ and the compensation he’s received for it over the years.

    He knows he’s a fraud.  Ergo, so is everyone else who has what he has/achieved the wealth he’s achieved since they ‘earned it’ about as much as he did/does.

    QED

    • To clarify:  since he knows he hasn’t earned it, therefore, anyone else whose achieved ‘status/wealth etc’ has not earned it because they couldn’t possibly be more deserving than he.

    • Krugman never did return the money he made as an “advisor” to Enron … for which he said he did nothing.
      I deem this morally .. “bad”

    • This is something that really p*sses me off about people like Krugman: they make a fat pile of cash and live QUITE comfortable lifestyles, yet hector the rest of us about greed, selfishness, immorality, etc.  I’m sure that there are libs out there who give away most of their money to the poor, but they are few and far between.  The rest of them seem to think that their “contribution” is telling the rest of us to give up more of OUR money.

  • The rich don’t necessarily deserve their wealth, and the poor certainly don’t deserve their poverty.

    … and most of the recent Nobel Prize winners don’t deserve them either.

  • and the poor certainly don’t deserve their poverty.

    >>>  Disagree.  Many (not all) of the “poor” are that way because of the choices they make.  I look at someone who didn’t bother to  finish HS, or got mired with drugs, or single parenthood when young and you know what?   Yeah, maybe they did get what they asked for, harsh as it sounds.  Some mistakes it takes a long time to bounce back from.

  • “Many people say that some are criminals because they have no economic opportunities. More truthfully, they have no economic opportunities BECAUSE they are criminals.  Who would give someone with a criminal mind or a criminal past ANY economic opportunity?” –  Criminal psychologist Stanton Samenow.
    At the same time, I’d say it’s been well proven that extremely little of criminal activity is for survival. The stories of people committing robbery or theft to feed their kids is just utter gullible BS.
     

  • He is right there are rich people who don’t deserve their wealth. Corporate shareholders whose companies suckle at the public teat. Rich union bosses. Ivy League Academics who have never done a job in the real world, and trust fund socialists like the Kennedy’s.

  • There are only two ways to obtain wealth:

    1) Steal it.

    2) Obtain it from others by providing value to them.

    Capitalism is all about #2. Sure, there are still theives about, but in America, the best way to obtain wealth is to provide value.

    The second thing is keeping wealth. You do that by being prudent with the wealth you have obtained.

    The reality is that capitalism is all about morals. That does not mean that immoral people don’t also obtain wealth, obviously they do (the name “soros” jumps to mind), but the vast majority of the wealth obtained in capitalism is obtained by good, moral behaviour. That’s even true of performers like Mondonna, who may put on a show that isn’t moral, and who may be an idiot about a lot of things, but the fact is she is giving people exactly what they want–she isn’t stealing from her fans.

  • Krugman;
    “Allow me to make a point: Economics is not a morality play. It’s not a happy story in which virtue is rewarded and vice punished.
    The market economy is a system for organizing activity — a pretty good system most of the time, though not always — but not according to any moral significance.
    The rich don’t necessarily deserve their wealth, and the poor certainly don’t deserve their poverty.”

    McQ
    “What, in fact, that statement is meant to reflect is Krugman’s apparent belief that wealth is unequally distributed not because it is earned, but by an immoral and unfair system that needs to be fixed.” 

    No, I don’t think so. Perhaps if  the quotes were in the order in which they were written it would be clearer. Krugman specifically stated that morality plays no part in the market. Further on he also says;
    “… the essentially amoral nature of economics becomes even more acute.”

    “ That decision is one based in morality in which the consumer weighs the options and picks the vendor who best exemplifies their moral ideal in the market”

    If that were true there would be no market for stolen goods, assuming that the public felt that dishonesty was morally wrong.
    Do the rich ‘deserve’ their wealth? Not necessarily. Not unless you believe Madoff, Keating, or even Capone deserved their wealth.
    Do the poor ‘deserve’ their poverty? Some do, some don’t. I really think you are a trifle overwrought on this. So he omitted the ‘necessarily’ bit in the second sentence. The central idea is still valid; the allocation of wealth under capitalism not dependant on morality.

    • The entire point is I disagree with Krugman’s claim that morality plays no part in the market.

      As for whether or not all the rich “deserve” their wealth, I think I was clear in agreeing that isn’t necessarily so. However, I’d be interested in how you would define “deserved” and whether you think it would agree with Krugman’s definition.

    • I disagree.  Market exchanges are fundamentally moral, as they involve volition.  You confuse the issue with invocation of Capone, which is an anti-capitalist example used by the Collect.
      A true capitalist is the most moral of critters.  He/she does not care about the religion, color, sexual activity, tribe, etc. of those with whom he/she does business or hires.  All those are extraneous.
      A market exchange HAS to be one that leaves both participants happy with the exchange, or it would not happen.
      Markets allow for a range of values.  I do not shop at Whole Earth Foods, but some value what they offer, and pay a premium for their products.  I don’t care if people what to live in commune, so long as they leave me free to live as I wish.  Capitalism accommodates all that.
      You conflate “wealth” and “poverty” with market economics, which is a cardinal error.

  • So, that PhD in Literary Criticism didn’t earn his poverty?
    Does Krugman think they just hand out PhDs to anyone who de-constructs modern French poetry?
    No, he busted his ass for 5 years as an undegrad and then about 4 more for the PhD, including that year abroad. Does Krugman think its not work to apply for Pell grants, student loans, and food stamps?

  • A question for the lawyers:

    Could I use this article of Krugman’s as a defense when I break into his home and steal a bunch of his stuff?  I mean, clearly he has far more than I do, and therefor I deserve to have a good part of it, and by his logic it is only good, right, moral and just that I take what I am owed…

    • No.  You cut out the government in your scenario.  That is criminal.
      WITH the government doing the abstracting FOR you…that is civic goodness.
      Hope that helped…

  • Along with the Democrats’ open campaign to persuade the public that the election did not mean what Republicans thought it did, there is an allied effort underway, far more subtle, to undermine and weaken the GOP position. It comes from a group of self-proclaimed wise men who present themselves as being above the fray. These voices, acting from a putative concern for the nation and even for the Republican Party, urge Republicans to avoid the mistake of Obama and the Democrats of displaying hubris and overinterpreting their mandate. With this criticism of the Democrats offered as a testimony of their even-handedness and sincerity, they piously go on to tell Republicans that now is the time to engage in bipartisanship and follow a course of compromise. The problem with this sage advice is that it calls for Republicans to practice moderation and bipartisanship after the Democrats did not. It is therefore not a counsel of moderation, but a ploy designed to force Republicans to accept the overreaching policies of the past year-and-a-half. It is another way to defend Obama’s “change.” If Republicans are to remain true to the verdict of 2010, the message of this election cannot be merely containment; it must be roll back.

    Of course, this is all undermined when the Democrats can’t even accept that they did anything wrong that would have the public put them out of office. Well, if they did nothing wrong, then there are no lessons to learn from them. These sage “wise men” offer advise where none is needed.

  • AH-HA!!!  I see the central problem…and I’ve been guilty of it, too.
    Krugman makes the brilliant (not) tautologic the “economics are not moral”.
    Physics is not moral, either.  Nor is biology, chemistry, or psychology.  Science is not moral.
    Krugman than goes on to conflate what he just observed about the science of economics with MARKETS, which are a subset of economics in the APPLIED sense (i.e., where people live).  Of course, this is simply stupid, wrong, and confused thinking.
    Typical Krugman.

  • Many of the poor I know have earned their “poorness” through the lack of industry and/or substance abuse. Whatever their failings, it never justifies the legalized theft of my earnings. (Playing by the rules and working hard).

    Nay, the very concept of income redistribution mobilizes wealth-building persons, myself included, to flee; causing the very opposite of what analysts’ pontificate with their advanced degrees in Marxist theory.