Krugman: “The Instability of Moderation”

I know this blog has been really heavy on the economics posting lately. But if there’s one thing worth reading this weekend, it’s Paul Krugman’s diagnosis of how the schism in the economics profession led to policymakers failing to implement the lessons learned from the 1930s. Really excellent stuff.

The only thing I would add is that it’s hard for me to escape a reductive conclusion from Krugman’s points: it’s seems unlikely that the “Samuelsonian synthesis” of moderate economic policy was uniquely unstable. Rather, any policy that diverged from a conservative-leaning economic orthodoxy would also face most of the same pressures. A more statist policy would almost certainly have been met with howls from many academic, think-tank, and political quarters. How would this have been any more stable? The root problem is that the economics profession became wrongly doctrinaire after WWII and the policymaking world, especially after the battering the economy took in the 1970s, was all too ready to lap up most of the wrong doctrine.

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