Here is a review of Paul Krugman's new book, The Conscience of a Liberal from David Kennedy. The review appears in the New York Times. When you start, as David Kennedy does, with the premise that "maybe Krugman is not really an economist" because he believes that sometimes government intervention is necessary to correct market failures, you have to wonder if it's worth reading on. It's not "anti-economist" as Kennedy suggests to believe markets sometimes need to be corrected. The suggestion that it is "anti-economist" displays the reviewer's ignorance about basic economics. Also, if you are going to have an historian rather than an economist or political scientist review Paul Krugman's work, it ought to be one who at least gets history right. Paul Krugman reviews his review:
Continuing the tradition, by Paul Krugman: Well, I’ve gotten a dismissive review in the NYT. It’s sort of a tradition. After all, The Great Unraveling received an equally dismissive review from Peter Beinart, in which he portrayed my conclusion that the Bush administration deliberately misled us into war as a crazy conspiracy theory, and contained this immortal pronouncement:
But most Americans do not consider the Bush administration corrupt, and Paul Krugman cannot convincingly prove it is.
I think David Kennedy’s review will hold up about as well as Peter Beinart’s. I presented facts on voting behavior, which point to the centrality of race — he ignores them. I presented polling evidence about the timing and role of the perception that Democrats are weak on national security; he just waves it away.
Oh, and when Kennedy says, to illustrate my alleged factual problems, that
Kansas, whatever its other crimes and misdemeanors, is not customarily regarded as the birthplace of Prohibition
you have to ask who’s got the factual problems. I don’t know what “customarily regarded” means, but Carrie Nation wielded her ax in Kansas - and Kansas was the first state to ban alcohol in its constitution.
And here's the review itself:
Malefactors of Megawealth, by David Kennedy, NY Times: Paul Krugman is a justly renowned professor of economics... His abundant accolades include the John Bates Clark Medal, ... perhaps even more prestigious than receipt of the Nobel in economic science. His twice-weekly column in The New York Times routinely and authoritatively demystifies complex economic arcana.
And yet maybe Krugman is not really an economist — at least not according to the definition offered more than a century ago by Francis Amasa Walker, the first president of the American Economic Association, who wrote that laissez-faire “was not made the test of economic orthodoxy, merely. It was used to decide whether a man were an economist at all.”
Most modern economists continue to celebrate Walker’s orthodoxy, and behind it, the classical doctrines of Adam Smith, whose fabled “invisible hand” regularly works wonders of production, distribution, innovation and efficiency, provided it is kept free of the meddlesome “nanny state.” Against the constant threat of encroachment from that benighted quarter the free-market faithful are ever vigilant.
Krugman will have none of this — well, very little of it (he won the Clark Medal for work demonstrating the limitations, but not the total illogic, of free trade). Where the orthodox see nothing but market miracles, he sees many a market failure. And where they detect the invisible hand, he finds manipulation by the richest Americans to rig the game in their favor.
In our time, Krugman argues, the malefactors of megawealth have triumphed. He recites the now-familiar data that the wealthiest 0.01 percent of Americans are seven times richer than they were three decades ago, while the inflation-adjusted income of most American households has barely nudged upward. ...
But Krugman the anti-economist does not believe that growing economic inequality incubated modern political conservatism. In his view, the “arrow of causation” points the other way: political change, cunningly engineered by “radicals of the right,” has spawned egregious economic disparity, as well as a toxic level of partisanship. Ever the iconoclast, Krugman says “this strongly suggests that institutions, norms and the political environment matter a lot more for the distribution of income — and that the impersonal market forces matter less — than Economics 101 might lead you to believe.” In short, it’s the politics, stupid.
The bulk of this book consists of a historical explanation for how this sorry state of affairs came to be. It’s a story that is as factually shaky as it is narratively simplified. (Kansas, whatever its other crimes and misdemeanors, is not customarily regarded as the birthplace of Prohibition; the Voting Rights Act passed in 1965, not 1964.) History according to Krugman goes something like this: the nation suffered through a “Long Gilded Age” of let-’er-rip, dog-eat-dog capitalism until the New Deal created a new social order characterized by income-leveling taxes, job security, strong labor unions, a prosperous middle class, bipartisan solidarity and general social bliss. Krugman invokes that post-World War II “paradise lost” in his first paragraph, and his yearning to restore that Edenic moment informs all the pages that follow.
But as the story unfolds, serpents slither into the garden, in the form of pesky “movement conservatives.” Those upstarts set out in the 1960s to exploit racial tensions, national security anxieties and volatile value-laden matters like abortion, school prayer and gay rights “to change the subject away from bread and butter issues.” By century’s end they had managed to fasten upon their hapless fellow citizens “a second Gilded Age” in which inequality is on the rise and even the modest American version of the welfare state that the New Deal put in place is in danger of being dismantled.
For this dismal state of affairs the Democratic Party is held to be blameless. Never mind the Democrats’ embrace of inherently divisive identity politics, or Democratic condescension toward the ungrammatical yokels who consider their spiritual and moral commitments no less important than the minimum wage or the Endangered Species Act, nor even the Democrats’ vulnerable post-Vietnam record on national security. As Krugman sees it, the modern Republican Party has been taken over by radicals. “There hasn’t been any corresponding radicalization of the Democratic Party, so the right-wing takeover of the G.O.P. is the underlying cause of today’s bitter partisanship.” No two to tango for him. The ascendancy of modern conservatism is “an almost embarrassingly simple story,” he says, and race is the key. “Much of the whole phenomenon can be summed up in just five words: Southern whites started voting Republican. ... End of story.”
A fuller and more nuanced story might at least gesture toward the role that environmental and natural-resource issues have played in making red-state country out of the interior West, not to mention the unsettling effects of the “value issues” on voters well beyond Dixie. And as for national security — well, as Krugman sees things, it was not Democratic bungling in the Iranian hostage crisis or humiliation in Somalia or feeble responses to the first bombing attack on the World Trade Center or the assault on the U.S.S. Cole, but the runaway popularity of the Rambo films (I’m not making this up) that hoodwinked the public into believing that the party of Carter and Clinton (not to mention McGovern and Kucinich) might not be the most steadfast guardian of the Republic’s safety.
For all that he inveighs against the evils of partisanship, Krugman astonishingly concludes by repudiating the chimera of “bipartisan compromise” and declaring that “to be a progressive, then, means being a partisan — at least for now.” Indeed, at times he seems more intent on settling his neocon adversaries’ hash than on advancing solutions to vexed policy issues. “Yes, Virginia, there is a vast right-wing conspiracy,” he writes, a sentence that both stylistically and substantively says much about the shortcomings of this book.
That assorted wing nuts have pretty much managed to hijack the Republican Party in recent years is scarcely in doubt. That the market is at least occasionally fallible is also not at issue. Nor is it deniable that the New Deal rendered the lives of millions of Americans more secure, and that they have become markedly less so in recent decades. A tidal wave of risk-shifting — from defined-benefit to defined-contribution retirement plans, and from employer-financed to individually-paid health care insurance, to cite but two examples — has set millions of American families anxiously adrift on a sea of uncertainty. Krugman’s chapter on the imperative need for health care reform is the best in this book, a rueful reminder of the kind of skilled and accessible economic analysis of which he is capable, and how little of it is on display here. Like the rants of Rush Limbaugh or the films of Michael Moore, Krugman’s shrill polemic may hearten the faithful, but it will do little to persuade the unconvinced or to advance the national discussion of the important issues it addresses. It may even deepen the very partisan divide he denounces. Where is the distinguished economist when we need him?
More to the point, where's a decent reviewer when we need him? As Krugman notes in his response, David Kennedy is wrong about the history of prohibition, and the other "error" is a pretty trivial slip of writing 1964 instead of 1965. If those are the best examples of Krugman's errors Kennedy (as an historian himself) can come up with, then you have to conclude that Krugman is on pretty solid ground with the historical story he tells.
The review also ignores a lot of evidence from political scientist Larry Bartels on values voting that supports Krugman's position on the influence of racial politics. The values voting conclusions aren't things Krugman simply asserts - as you might conclude from the review - Krugman reviews solid evidence before coming to this conclusion. So when Kennedy launches into other reasons why voters may have supported Republicans, it does nothing to undermine Krugman's thesis that a large amount of the change arises from racial politics. The Bartels evidence is still there, nothing is presented in the review to counter it, and it paints a clear picture.
The author also takes issue with the statement that “Yes, Virginia, there is a vast right-wing conspiracy,” but once again he does not tell us about nor bother to try to rebut the careful, detailed discussion of right-wing institutions and their common funding sources that comes before this statement. Krugman's statement is a summary of this evidence, and to focus on the summary statement rather than than the evidence that supports it is not much of a rebuttal.
It's too bad that Kennedy chose to argue that, in essence, "Democrats have problems too" -- as though that somehow excuses Republicans for issues like racial politics -- rather than dealing with the evidence Krugman presents concerning the political and economic changes that produced the New Gilded Age.
Update: Brad DeLong adds:
David M. Kennedy of Stanford Makes His Play for the Stupidest Man Alive Crown, by Brad DeLong: Stanford's David M. Kennedy reveals that he is a serious contender for the "Stupidest Man Alive" title. Let's roll the tape: the start of his review of Paul Krugman's The Conscience of a Liberal:
Malefactors of Megawealth: Paul Krugman is a justly renowned professor of economics and international affairs at Princeton University. His abundant accolades include the John Bates Clark Medal... a distinction... perhaps even more prestigious than... the Nobel.... [Y]et maybe Krugman is not really an economist — at least not according to the definition offered more than a century ago by Francis Amasa Walker, the first president of the American Economic Association, who wrote that laissez-faire “was... used to decide whether a man were an economist at all.” Most modern economists continue to celebrate Walker’s orthodoxy, and behind it, the classical doctrines of Adam Smith, whose fabled “invisible hand” regularly works wonders of production, distribution, innovation and efficiency, provided it is kept free of the meddlesome “nanny state.”... Krugman [is] the anti-economist...
David Kennedy thus demonstrates that he (a) has never read Adam Smith, and (b) has little acquaintance with modern American economists--who are (like Adam Smith) much more interested in prescribing how the nanny state should meddle to be effective than in protecting the naked market from interference.
Equally bizarre is the end of Kennedy's review:
Like the rants of Rush Limbaugh or the films of Michael Moore, Krugman’s shrill polemic may hearten the faithful, but it will do little to persuade the unconvinced or to advance the national discussion of the important issues it addresses...
David Kennedy thus demonstrates his allegiance to those who have never had substantive arguments to make in reply to Paul Krugman's arguments, and hence have no move to make save the rhetorical one of dismissing him as "shrill." Because, of course, David Kennedy had just before admitted that Krugman is right on the substance:
That assorted wing nuts have pretty much managed to hijack the Republican Party in recent years is scarcely in doubt. That the market is at least occasionally fallible is also not at issue. Nor is it deniable that the New Deal rendered the lives of millions of Americans more secure, and that they have become markedly less so.... Krugman’s chapter on the imperative need for health care reform is the best in this book...
And Paul Krugman replies... [as above]
Update: Also see:
Ah. Stanford's David Kennedy Can't Quote Properly Either...: David Kennedy of Stanford opens his review of Paul Krugman's "Conscience of a Liberal" with a claim that AEA founding president Francis Amasa Walker defined an economist as a faithful believer in laissez-faire, “not... the test of economic orthodoxy, merely.... [But] used to decide whether a man were an economist at all.”
Why am I not surprised that Francis Amasa Walker actually said something very different?
And, for a round-up of posts, see:
A Gathering of the Clans...: Economic historians, historians of economic thought, practitioners of political economy, and others are painting themselves blue with woad and practicing with staves after reading Stanford's David Kennedy's trashing of Paul Krugman.