Paul Krugman pauses to wonder why he’s been characterized as immoderate when — according to him — “there’s not a lot of air between my views and those of, say, staff economists at the Fed.” His conclusion: “What was radical, if you like, was my style, not my content.”
Bingo. Krugman’s detachment from mainstream economics is indeed a matter more of style than of content. But one symptom of that detachment is his failure to recognize that style is all that matters. Economics is most valuable not as a repository of received truths, but as a way of thinking — a way of thinking that has proved itself extraordinarily valuable as a bulwark against nonsense and claptrap. It’s that way of thinking — the style of economics — that Krugman so often and so depressingly abandons.
Here’s an example: The minimum wage is much in the news these days. There’s some controversy over whether a minimum wage hike would substantially reduce employment. Krugman, in a recent column, reported that he’d reviewed the evidence and concluded that the employment effect would be quite small. From this, he jumped to the conclusion that a minimum wage hike is a good thing.
But the economic style of thinking does not allow such leaps in logic. It demands that we recognize that any income transferred to low-wage workers has to come from someone else, in this case from the owners and customers of businesses that employ a lot of low-wage workers. (Probably more from the owners in the short run and more from the customers in the long run, as some of these businesses disappear and prices accordingly rise.) And then it demands that we ask why these particular people should foot the bill. Why not finance a transfer to low-income workers through general tax revenues, or via a specific tax on, oh, say, newspapers, as opposed to an implicit specific tax on McDonald’s hamburgers?
Anyone, left, right or center, can write about how minimum wages might affect low wage workers. The economist’s unique contribution is to insist that you’re not done until you think about how it might affect the typical Wal-Mart shopper (who, incidentally, has a substantially below-average income). By ignoring that question, Krugman chose to write not as an economist, but as a partisan hack. That’s a style choice, and it goes to the heart of why so many economist have stopped taking him seriously.
This is not an isolated lapse. When Krugman wrote to endorse boycott threats to enforce better working conditions in Third World countries, he wrote about the potential good that could come from those threats, while completely ignoring the potential harm. You don’t need an economist, let alone a Nobel laureate, to point out the potential benefits of boycott threats, just as you don’t need an economist to point out the potential costs. What you need an economist for is to insist that you account for both the costs and the benefits and that you try to construct some sort of intellectual framework for weighing them against each other. Krugman was so interested in stating his conclusion (i.e. his content) that he forgot to include any of his reasoning — or even to acknowledge that reasoning is called for. Once again, he adopted the style of a hack.
What might he have done better? Let me offer this old blog post of mine as an example. Unlike Krugman, I drew only tentative conclusions. But also unlike Krugman, I tried to lead the reader to see both sides of the story, and more importantly to suggest ways of estimating the relative importance of various factors. I’m sure it’s imperfect, but it’s at least an honest attempt to engage the reader in the economic way of thinking. Krugman, by contrast, prefers to do your thinking for you, except on those occasions when he skips the thinking part altogether.
These are not isolated lapses. If you want more examples, start here.