When will Krugman catch up with Keynes?16 January, 2016 at 10:44 | Posted in Economics | 2 Comments
In his column this morning, Paul Krugman, had this to say about issues that have mattered a lot to me over many years now. I admire Krugman, of course, but this is bullshit, pure and simple. Not the Harry Frankfurt kind, which requires willful ignorance of the facts, but the everyday kind, which requires mere ignorance of the historical record.
“Don’t say that redistribution is inherently wrong. Even if high incomes perfectly reflected productivity, market outcomes aren’t the same as moral justification. And given the reality that wealth often reflects either luck or power, there’s a strong case to be made for collecting some of that wealth in taxes and using it to make society as a whole stronger, as long as it doesn’t destroy the incentive to keep creating more wealth.”
The “incentive to keep creating more wealth”? …
Keynes, bless his heart, called it “a somewhat disgusting morbidity.”
He was right … Here’s how he put it [in ‘Economic Possibilities for Our Grandchildren’ (1930)]:
“When the accumulation of wealth is no longer of high social importance, there will be a great change in the code of morals. We shall be able to rid ourselves of many of the pseudo-moral principles which have hag-ridden us for two hundred years, by which we have exalted some of the most distasteful of human qualities into the position of the highest virtues. We shall be able to afford to dare to assess the money-motive at its true value. The love of money as a possession … will be recognised for what it is, a somewhat disgusting morbidity, one of those semi-criminal, semi-pathological propensities which one hands over with a shudder to the specialist in mental disease.” …
Paul Krugman is a hero to many of us because he fights the good fight against the idiocies of economic theory and practice in our time. But he is now behind the times because he hasn’t yet caught up with Keynes.