Paul Krugman’s latest gets my vote for his most incoherent column ever. As I understand his argument, it goes like this:
- Computers are good at routine tasks.
- Therefore the rewards to performing routine tasks are falling. This is true at all skill levels.
- Therefore education does not always make people more productive. It makes people more productive only when it trains them to do tasks that are not better done by computers.
- Therefore we need stronger labor unions and universal health care.
Say what?. The basic thesis — that there’s no point in learning to do something difficult if a computer can do it better, and that this is significantly affecting the returns to certain kinds of education — is an interesting one. The moral, of course, is that you can’t imitate your way to prosperity. If we want to be rich, we have to innovate.
So to encourage innovation, you want to strengthen the unions? To encourage innovation, you want to reduce the relative reward to innovation, by insuring that everyone gets the same health care regardless of their social contributions?
Now, you might suppose that Krugman was thinking something along the following lines: Large swaths of American workers are being rendered unproductive by computers. Somehow or another, we have to support those people even though they’re not producing much. Unions and universal health care will keep them afloat.
But that can’t be what Krugman was thinking. I’m sure of this, because I happen to know that Krugman has a Ph.D. in economics. Therefore he must surely be aware that you can’t divorce incomes from productivity. Sure, you can redistribute, but you can’t redistribute more than what gets produced. If the problem is that our old skills are no longer productive, then our incomes must fall unless and until we acquire different — and less computer-replaceable — skills.
There are certainly good arguments for universal health care. (There are also good arguments against it.) But the “argument” that it’s somehow going to make people more innovative escapes me. And as for the idea that unions will somehow encourage workers to be more creative — I’d love to see either the theory or the evidence behind that one. Or at least a hint of what, if anything, was in Krugman’s head when he wrote this.