“So if there were anything to the economic assumptions that dominate US public discussion — above all, the belief that even modestly higher taxes on the rich and benefits for the less well off would drastically undermine incentives to work, invest and innovate — Europe would be the stagnant, decaying economy of legend. But it isn’t.”
Wasn’t sure where to post this, but I stumbled upon the article and wondered what people here might say in response to this.
I personally find it odd that Krugman doesn’t bother getting into the fact that each individual country within the EU has different policies and things like health care or banking, for instance. Yet in the article he seems to lump them all together as if they are all the exact same. He also doesn’t seem to comment on or acknowledge market distortion due to largely subsidized industry, such as agriculture, unless I’m mistaken–I’m no expert on European economics by any means.
And I’m really not sure what he’s talking about with the “economic dogma in this country [US]”.
He’s talking about the strawman which socialists (like himself) concoct that if it’s not completely government-run, it must be completely unregulated, “wild west”, “dog-eat-dog” capitalism.
He arguably influences a large audience, so if those of us who advocate libertarianism and/or Austrian economics want to see these things become more commonplace, it stands to reason we need to pay attention and be prepared to counter such mainstream opposition, no?
Is it really fair to compare England to the US? Is their culture the same? Does their economy depend on the same things? Are their demographics the same?
I mean maybe a lot more people (including the rich) are all for taxing the rich more and giving the money to the poor.
If that’s the case then might that explain why their economy would react differently under different policies?
Also, is England really that successful? Do they really produce that much? I’m asking because I have no idea. But there do seem to be some serious assumptions in Krugman’s statements that I bet a lot of people just take at face value because they love Krugman. I, however, do not love Krugman, and so I always have questions about things he says.
Id say its generally the typical stereotype that Europe is amazing and the U.S is decaying because of its decadent capitalism. Aside from the fact that many of the European countries (even outside of recessions) have high unemployment rates, Britain is almost caving in faster than us because of its debt, most of those countries have lower growth rates, have high debts, and are political hellholes, yeah I’d say its a pretty good place as an example of growth
It was a reply to your post, which asked if demographics and culture etc. might account for the difference between US and UK. You just agreed with me that the answer is no.
I think that demographics and culture have a huge affect on socialism/capitalism. No socialism can work without some minimum of voluntary agreement (this is provided by culture) and no culture is totally unaffected by the policy of government (for instance taxes cause a boost in consumption spending and higher time preference).
Although in analysis it is unnecessary to differentiate the two simply because their mutual effects on each other are already covered in the general idea that humans act.
So what? the market always works, regardless of what nitwit fantasists like Krugman say.
Let 'em preach their twaddle- it makes no difference one way or another whether or not his ideas or others like them get implemented - like I said, the market always works.
I say to hell with Krugman - go drink beer- much more fun. [:D]