Krugman Between the Lines
By Bryan Caplan
I’m officially pronouncing Scott Sumner the master of Krugman exegesis. Two gems (the first level quotes are me quoting Sumner, the second level quotes are me quoting Sumner quoting Krugman):
OK, let’s have some fun with this golden oldie from 2005:
And the backlash [against neoliberalism] has reached our
closest neighbor. Mexico’s current president, Vicente Fox, a former
Coca-Cola executive, is a firm believer in free markets. But his
administration is widely considered a failure.
So what is Krugman saying here? You might think; “Isn’t it
obvious? He’s saying that Fox implemented free market reforms and they
failed.” If so, you underestimate the subtlety of Mr. Krugman. He
didn’t say that Fox implemented any free market reforms at all. He
said he was a firm believer in free markets. And who could
dispute the proposition that mere belief in free markets, if not
actually implemented, does not produce economic miracles? How dare you
assume he claimed Fox implemented such policies!
…The fact is that Mr. Fox did
not implement free market reforms. Why not? Because the Mexican
legislature was firmly controlled by the opposition PRI, who had no
interest in helping him… Think
about it. If you wanted to say economic reforms failed, why not just
come out and say it. Why refer to a leader who believed in market
reforms, when it takes no more ink to say a leader who implemented market reforms. (OK, ‘implemented’ is a couple extra letters–‘enacted’ would do.)
Latin Americans are the most disillusioned. Through much
of the 1990’s, they bought into the “Washington consensus” – which we
should note came from Clinton administration officials as well as from
Wall Street economists and conservative think tanks – which said that
privatization, deregulation and free trade would lead to economic
takeoff. Instead, growth remained sluggish, inequality increased, and
the region was struck by a series of economic crises.
At first glance you might think; “Aha Sumner, there’s your smoking
gun. He does oppose the neoliberal agenda of privatization,
deregulation and free trade, or at the very least thinks it failed.
Just as you said. You’ve finally nailed him.” Not so fast. He didn’t
say these policies were tried and failed, he said they were recommended
by American officials, and he also said Latin America had not done
well. But he never actually said the policies were tried and failed.
I wish my critics read me half as closely as Sumner reads Krugman. They might notice that I’m cagier than I sound.