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Tuesday, October 30, 2007

Mario Cuomo Interviews Paul Krugman: The Role of Government

Paul Krugman on the role of government:

Paul Krugman talks to Mario Cuomo, Guardian Unlimited (Video): ...Cuomo: I've enjoyed reading your book immensely... Let me be sure I have right what I think your basic premise was, ... and that is that the shifting nature of the condition of the American peoples' lives isn't a function of some immutable laws of the market. It's a function more of politics and institutions, etc.

Krugman: Yeah, very much so. ... The middle-class society ... was created. It didn't evolve through the invisible hand. It was created by FDR and the policies of the New Deal. The second Gilded Age we're living in now was created in large part by the policies of Ronald Reagan and other rightwing politicians. ...

...Cuomo: The - maybe this is simplistic, but my favourite historic figure on ideology is Abraham Lincoln, mostly because he was able to reduce everything into little capsules that seemed to make sense, and on the question of ideology, his popular - the most popular quote that I can find is: "Government as the coming together of people to do collectively what they couldn't do as well through the market system privately." And that, it seems to me, is perfect: that if the market works to educate other people or to give them healthcare, then fine. You don't need government, but - [laughs] - it just doesn't work to do those things and so you do need government.

Krugman: Yeah, we don't want government in the business of growing our spinach, because it turns out that's something that farmers, private farmers do a whole lot better. We do kind of want government in the business of making sure that the spinach isn't contaminated with E.coli because that's something that farmers don't do very well...

Cuomo: ...[W]ouldn't ... you have to admit that this country was constructed without the liberal sentiment, because there's nothing in the constitution that says we should be our brother's keeper, and I think really that's why Lincoln preferred the declaration of independence, which introduced the notion of equality in which you could - which fits very nicely where you say in your book that we should have a closer to equal system when it comes to distribution of wealth, et cetera. But the constitution before Roosevelt and before the adoption of all those programs had nothing in it that said you should love one another or take care of one another.

Krugman: Well, it was a different time, you know. That's kind of obvious. But the - again, FDR - talking about him too much, but his - if you look at the speech he gave on the signing of the Social Security Act, he talks at some length about how the conditions of a modern industrial nation create new forms of risk, new forms of uncertainty, and it is the necessary role of government to mitigate those risks.

So, true, when Thomas Jefferson was talking about America, it was - leaving aside the slaves, it was a society for the most part of small landowners, and you probably didn't need social security in that society, but now, you know, by the time that the New Deal is created, we were a society of large corporations and unstable labour markets for blue collar workers, and we needed those things, and now we need them more than ever.

Cuomo: Well, but could you also say about that that what we didn't have for 150 or 160 years was healthcare or education, and nothing was more obvious than that you needed both those things desperately to build the country.

Krugman: Well, it's actually interesting. America pioneered mass education not so much from the federal level, but the idea that every child should receive education; that everyone in the country should be literate is something that started here long before it reached Britain.

Cuomo: You know, it started late in this country, didn't it? It wasn't in the constitution. President Lincoln talked about it a little bit in 1865 and did something - Adam Smith mentioned it as one of the things you'd have to do through a government, I think, and even before that in The Theory of Moral Sentiments for his second book, he said it more clearly, but that didn't happen for a long, long time.

Krugman: Right. But we were the first to - really the first nation to make a point of ... universal education - I mean, I like to say if universal education didn't exist in this country, people on the right would denounce it as un-American, and it's only because it's already in place that they can't quite do that... The case for every child having access to healthcare is absolutely the same as the case for every child having access to elementary school. ...

    Posted by on Tuesday, October 30, 2007 at 04:32 PM in Economics | Permalink  TrackBack (0)  Comments (22)

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