14 Oct 2014


Krugman, Potpourri, Shameless Self-Promotion 34 Comments

==> My column at FEE talking about outsourcing in the context of the “Million Jobs Project.”

==> No joke, I submitted this to the blog of unnecessary quotation marks.

==> Glenn Greenwald explains why endless war is now literally US doctrine.

==> A Kontradiction or a contradiction? Krugman vs. Krugman on carbon taxes.

==> Don Boudreaux with a good quote from Lachmann on capital deepening.

==> Joe Salerno on Jean Tirole winning the Nobel in econ. Hey, why was Kirzner considered in the running this time around? I first heard the theory that Baumol would win, and then they’d have to give it to Kirzner too, a good ten years ago. Why was there such a buzz this year for Kirzner?

34 Responses to “Potpourri”

  1. JimS says:

    I liked your piece on FEE quite a bit. Your analogy of, “Why not limit trade or out sourcing to within the state.” is good. I usually go further and say, why should we buy anything from the next town? Don’t we need to keep jobs even more local? Why can’t we be like Italian Swiss Colony in Asti, CA where they were totally self sufficient in the late 1800s? Why wasn’t their self sufficiency efficient? Oddly most people equate self sufficiency with efficiency.

    The great thing about free trade is that it allows for efficiency to reign supreme. People bemoan Manhattanites buying lettuce from China rather than from upstate farmers and how it is wasteful. Obviously it isn’t wasteful or suppliers couldn’t repeatedly grow, truck, ship, and sell in this manner if they were loosing their shirts or they were inefficient. How amazingly inefficient upstate farmers are or how ill suited their circumstance is for growing lettuce. The efficiency translates into lower prices that consumers reward. As you noted, this free them up to do what ever it is that they do in upstate NY, perhaps producing the likes of Mike Tyson?

    • Andrew_FL says:

      Be cautious, “buy local” is an actual movement with actual proponents.

    • Major.Freedom says:

      Oddly most people have unwittingly accepted the Marxian claim of dehumanization and alienation in the division of labor.

      • Major.Freedom says:

        The “inefficiency” gambit is just an outgrowth of that existing prejudice.

  2. Major.Freedom says:

    Regarding endless war:

    “That its [fascism’s] foreign policy, based as it is on the avowed principle of force in international relations, cannot fail to give rise to an endless series of wars that must destroy all of modern civilization requires no further discussion.” – Mises

  3. Major.Freedom says:

    Regarding million jobs…

    Keynesianism teaches us not to trust outsourcing because herp derp demand from abroad is not assured/guaranteed (as if absolute lack of uncertainty is an attainable ideal!). So in this one particular context, this 15,785,846 one thus far, it would be better for our sensitivities if instead of outsourcing, the local government “steps in” (as if government is like the rescuer dancer at the prom who saves the damsel in nerd distress) and “spends”.

    But don’t blame Keynesianism for growth in government. They have always just talked about incremental increases in government spending when determined as needed by…the government of course but let’s just assume the people want and need whatever the government wants (but don’t communicate that explicitly!).

  4. Scott D says:

    This comment on the FEE article should get a prize:

    “Why is labor cheaper in these foreign countries? Because of the host government’s intervention in the market place to change the rules to favor business. They make unions illegal, no minimum wage, no maximum hours, and very little environmental or worker safety regulations. They use “wage slaves” a permanent under class of the chronically working poor to support corporate profits. This article is nothing more than a pseudo-intellectual rationalization for selfishness and corporate greed.”

    Not only did this person classify a lack of regulations as “intervention”, but he made sure to include the phrase “corporate greed”. In the spirit of the unnecessary quotes blog, this comment was “really” something “special”.

    • Andrew_FL says:

      Well, to be fair, they did manage to include one thing that counts as an intervention.

      I have to wonder how common it actually is to outlaw unions.

  5. S.C. says:

    With regard to ISIS the people at Blackwater, Xe, or whatever the hell the rats call themselves now suggested using mercenaries. God, why didn’t the US sign the Declaration of Paris? We’re also one of the only countries where bounty hunters are legal.

    • Scott D says:

      Why is bounty hunting a bad thing?

      • S.C. says:

        It’s lawlessness. The bounty hunters can do practically whatever they want.

      • S.C. says:

        They’re basically like kidnappers to me.

      • S.C. says:

        They operate outside the law.

        • Scott D says:

          Okay, let me challenge those assertions.

          “It’s lawlessness. The bounty hunters can do practically whatever they want.”

          In the modern US, bounty hunters do not go after anyone they please. They are hired by bail bondsmen to capture bail jumpers. When an accused posts bail, they sign a contract with the bail bondsman promising to show up for their trial date. If the accused shows, the bail bondsman gets his money back. If the accused fails to show, the bail bonsdman forfeits the money to the court.

          This is when a bounty hunter is hired to find the accused and return him or her to police custody.

          “They’re basically like kidnappers to me.”

          In the contract is generally clauses forfeiting some of the accused’s rights if they do not show up for trial. The accused is informed ahead of time that if they jump bail, they will be tracked down and arrested by a bounty hunter. They have agreed in advance to their “kidnapping”.

          “They operate outside the law.”

          On the contrary, they are very much subject to local, state and federal laws, much more so than police. Bounty hunters generally take great care not to harm bail jumpers, because they risk civil and criminal lawsuit. The lack of any statistics on the number of homicides committed by bounty hunters and the scattered headline-making incidents that occur about 1-2 times per decade seems to indicate that these are rare incidents.

          Also, I should point out that statists should hate bounty hunters both for the fact that they are very successful (about 90% of bail jumpers get caught by bounty hunters) and because they represent something like how contract law in a free society would operate.

  6. Marc says:

    Thomson Reuters put out a prediction of possible econ Nobel winners and Kirzner was one of the 27 named.


    So, of course, Peter Boettkke, Todd Zywicki, Art Carden and others including the press in Israel jumped on this…



  7. Josiah says:

    2009 Krugman said:

    As a card-carrying economist, I cringe when “green economy” enthusiasts insist that protecting the environment would be all gain, no pain. But the best available estimates suggest that the costs of an emissions-limitation program would be modest, as long as it’s implemented gradually. And committing ourselves now might actually help the economy recover from its current slump.

    2014 Krugman said:

    I’ve just been reading two new reports on the economics of fighting climate change: a big study by a blue-ribbon international group, the New Climate Economy Project, and a working paper from the International Monetary Fund. Both claim that strong measures to limit carbon emissions would have hardly any negative effect on economic growth, and might actually lead to faster growth. This may sound too good to be true, but it isn’t. These are serious, careful analyses.

    I don’t really see how this is a Kontradiction, let alone a contradiction.

    • Bob Murphy says:

      Well right Josiah, if you leave out the contradiction, then it won’t look like a contradiction.

      What would it mean to say a green enthusiast was claiming the policy would be all gain, no pain if not this:

      This just in: Saving the planet would be cheap; it might even be free. But will anyone believe the good news?

    • Daniel Kuehn says:

      It’s not a contradiction. In the first case he says cost benefit analysis is better than just a benefit analysis, and that a CBA says there will be some costs. In the second case he says cost benefit analysis is better than just a cost analysis, and CBA says these thins are worth doing.

      Bob is getting sloppy on Krugman, I think.

      And of course he’s going to say I read things into Krugman but it’s right there in plain English. What Bob wants you to believe is that “cheap” is a statement about costs rather than about net benefits. He might be right but I’m certainly not reading into it any more than he is. We both have to interpret “cheap”. Since he’s an economist and he listed both costs and benefits it seems pretty straightforward to me that’s the sense in which he means it’s “cheap”.

      • Bob Murphy says:

        Again Daniel, you’ve taken a lesson from the Josiah playbook. If Krugman had merely said, “Fighting climate change, all things considered, is pretty cheap” then fine. But he said it might even be FREE–a word you totally ignored.

        No ifs ands or buts, “free” means “zero cost” (or zero price). If the hospital charges you $20,000 to save your kid’s life, that’s not free, even though you would say it was cheap (in your sense).

        • Daniel Kuehn says:

          Then add “free” to my comment above. He’s still clearly talking about net benefits.

          If you want to argue that using more technical language could have avoided Austrian bloggers going at him again that is a contention I’ll agree with.

          But if you want to argue that (1.) he meant, or (2.) any serious person thought he meant that there would be no costs to climate change I can’t agree with you – because he mentioned the non-zero costs in the article!

          Of course you took a page from Josiah’s playbook and cut that bit out when you quoted him!

          • Bob Murphy says:

            If you want to argue that using more technical language could have avoided Austrian bloggers going at him again that is a contention I’ll agree with.

            All right this is the last one and then you and I should just agree never to talk about Krugman again. Krugman is telling his readers that fighting climate change might be “free.” I say BS. You agree with me, that he can’t possibly mean “zero cost.” And you’re saying only an anal Austrian hater could possibly have thought Krugman meant “we get all the benefits of saving the planet without any of the pain.”

        • Daniel Kuehn says:

          We were talking about this on facebook the other day so you know my argument is not conditional on talking about just cheap or both free and cheap.

          Let me try to put it this way – let’s agree “free” means “no gross costs”. Very reasonable definition – I agree. Take that sentence out of the article and would you think he is talking about anything other than net benefits?

          If you answer “yes” then we’ve got much more fundamental differences here than what “free” means. If your answer is “no” then it seems reasonable to say that this is not a contradiction and that apparently “free” was a poorly chosen word.

          I don’t think “free” or “cheap” are that confusing in the context of the article, but I’m willing to grant you a better word might have been chosen.

          What you absolutely can’t claim is that he meant by that sentence what you are suggesting he meant.

          • Bob Murphy says:

            Daniel, couldn’t I use your technique here to rehabilitate *any* contradictory writings or speeches given by anyone? E.g., people thought Colin Powell was telling the UN that Saddam had WMD. But if we replace “has” with “might develop within the next decade” then problem solved, right?

            • Yancey Ward says:

              The clear description of the Kuehn method of argumentation that I have pointed out repeatedly.

            • Daniel Kuehn says:

              No like I said I’m fine with “free” and “cheap”. You seem to think it means zero gross costs – I don’t.

              I’m saying take that sentence out – does ANYTHING in the post say zero gross costs to you?

            • Daniel Kuehn says:

              “Has” clearly doesn’t mean “might develop” and in the context of everything else Powell said it could never be construed to mean that.

              “Free”/”cheap” is more ambiguous between our claims here and in the context of the rest of the column it doesn’t seem to be anywhere close to your interpretation.

            • John says:

              I do think a bit of a blind spot is developing on Kriugman. If this a contradiction, it really isn’t much of one.

      • Bob Murphy says:

        I’m curious Josiah and Daniel: If someone asked you what “free” meant a month ago, would you have thought “possibly consuming 5% of the economy, but offset with huge benefits”? Or do you think I am unfair to Krugman, and so you compensate by forgetting what “free” means?

      • Jan Masek says:

        Daniel, it’s clear that Krugman by benefits means the positive impact of avoided warming. By costs he means growth gone due to measures taken to avoid the warming. And i think it’s clear he says even if there was no warming threat (= no benefit), costs would be zero or even negative.
        Not only is he saying it’s free – he is saying it’s negative costs. It’s supposedly beneficial even if global warming is a non-existent threat (because shutting down coal power plants improves health etc)

        • Bob Murphy says:

          Right Jan, I think your interpretation is correct, and that’s what Krugman was doing.

        • Daniel Kuehn says:

          He’s said some odd things about coal regulation in the past – I’ll trust you he said that is a net benefit but couldn’t say for sure.

          But even then he’s still not saying costs would be negative. He’s not denying – after all – that those regs are costly to the coal companies and other people too as far as I know. But feel free to provide details if you think I’m wrong.

          • Bob Murphy says:

            Daniel wrote:

            But feel free to provide details if you think I’m wrong.

            Careful Jan–Daniel is here telling you, “Provide the details, and then pay me $10,000.”

  8. Koen says:

    Here’s an excellent use of quotation marks by The Onion (copied from Steven Pinker’s recent book on clarity in writing):

    The use of shudder quotes is taken to an extreme in the agonizingly self-conscious, defiantly un-classic style of postmodernism, which rejects the possibility that any word can ever refer to anything, or even that there is an objectively existing world for words to refer to. Hence the 2004 headline in the satirical newspaper The Onion on the passing of postmodernism’s leading light: Jacques Derrida “dies”.

Leave a Reply