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Krugman’s Conscience of a Liberal

18:07 Sun 17 Feb 2008
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I finished Paul Krugman’s Conscience of a Liberal yesterday. In summary, the book is a statement of Krugman’s views on a modern society’s optimal economic setup, the fact that he believes that the United States of the 1950s–1970s was much closer to that setup than it was before or has been since, and his theories on how that state was reached, lost, and can be reached again.

The core of this his arguments on what brought the United States both in and out of that mode (which he calls ‘the Great Compression’) is that political events and maneuvers were responsible. This seems obvious, given the New Deal, but many commentators seem to resist the idea that politics also moved the country back in the other direction, preferring the idea that “globalization” and “market forces”—conveniently both anonymous and seemingly inexorable—were/are responsible.

I don’t think that there’s anything inherent in increasingly easier trade with other regions that automatically forces higher inequality in an economy, and Krugman is able to back that up with comparisons to other Western economies, many of which have not seen similar rises in inequality during the “globalization” period. These other economies have also expanded, so it’s not that they have paid the price for their equality by stagnating.

I don’t find that surprising, but I do find it disheartening that Krugman even needs to spell it all out. While the markets are complex, and economics and trade often behave in unpredictable ways, the fact remains that they are systems that we set up, that as such they are inherently political, and that therefore the spoils of getting to set the rules in your favor are going to reap rewards at the expense of others. Krugman’s arguments are useful in that they demonstrate this very clearly using the comparison between the US now and the US then.

Krugman is optimistic about current affairs, despite acknowledging that massive inequality and concentration of wealth in the United States has wrought a lot of damage. He feels that the time is ripe for a return to the economic values of the compression era, and spends time arguing that the alliances which enabled the corporatist/rich to set up the economy to suit them are falling apart.

He lays out universal health care as the top priority to move back towards more equality, partly because it would symbolize the commitment to a social compact, the idea that government and society should help protect its members from sickness. Beyond that, he argues for a return to enforcing the laws regarding the right to unionize, having identified the strength of unions as a major part of why the prior era was more equitable.

Predicting whether or not he’s right is more or less impossible. I agree that some of the signs are good. I’m not sure that he’s looking deep enough, however, at the political establishment either in the US or Europe. I think he underestimates the power of the right-wing forces in Europe which are eager to move that region towards, not away from, US-style inequality, and are busy removing themselves from democratic oversight in order to do so. The entrenchment of corporate interests in the US media landscape, and the dominance of popular culture by that landscape, is something else he doesn’t address. He rejects the idea that the Democrats and the Republicans are indistinguishable, and has plenty of facts to back that up—but while there are clear differences, there are also more similarities than he examines.

State power is one of these. While some Democrats oppose the expansion of state power to include imprisonment without redress, torture, the evisceration of the Fourth Amendment, and so on, the majority of both parties seems to vote in favor of this, and the historical record suggests that in that arena, the two parties have little to differentiate them.

In my view, this is inherently connected with the other area where differences are largely cosmetic: foreign policy. Both parties essentially support, and have supported for years, the American imperial project, and are committed to the idea that the United States is the rightful controller of the majority of the world’s resources (especially, of course, oil). Granted, the Republicans are worse, but that doesn’t mean there are fundamental disagreements.

Imperialism tends to create a lot of opposition, and tends to require massive state power… which is why both parties end up accepting it not merely abroad, but at home. Krugman doesn’t look into this as a factor (and also ignores the extent to which exploitation of global resources affects the US economy). I think that the imperial project abroad has resulted in a number of the changes at home—if you’re an imperial planner and you can simply remove those who get in your way in other countries, eventually you start to think that this would be useful domestically, too.

Further, the ideologies that make empire palatable abroad aren’t ideologies of democracy and equality, and as such conflict with America’s purported political setup. I’m not sure that democracy and equality are the sure bet in that clash.

However, just because Krugman doesn’t address these questions doesn’t mean he’s wrong, or that his solutions wouldn’t make a huge difference. Even if the imperial project, with all the suffering it brings, continues, greater equality and a stronger social contract in the US would help tens, or hundreds, of millions of people, and a shift towards more democracy and participation would eventually push to at least take the edge off some of the imperial excesses. Again, that’s the same clash I mentioned above, it’s just that it comes later.

Overall, it’s worth reading, and I’ll be curious to see whether or not Krugman’s optimism is justified even a little (so far, the Democrats haven’t impressed me, but as he states, health care is a key issue, and there might be hope for some progress there).

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