Paul Krugman on “epistemic closure”.
Source link: http://archive.mises.org/12552/not-the-onion-2/
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{ 21 comments }
Are you SURE it’s not the Onion?
BTW – He describes MIT etc. as “freshwater” and also (the boondocks) Minnesota as “freshwater”.
Typo I guess.
I think what he MEANS is ” We, the ELITE” vs. “You, the RUBES”.
What a JERK.
He’s SO OPEN MINDED, you see.
And what’s the ” new Keynesianism” anyhow? Did they finally discover the hole in the sky where all the new money will emerge from to finance their “stimulations”???
the only thing he’s going to stimulate is my gag reflex
Is there a more pompous jackass in all of academia???
I was going to leave comment on his site, but you have to have be a member to do so. It was going to read, “This is a freaking joke, right?”
Is “new keynesianism” the one where they realized that keynesianism doesn’t work, but tried to apply a patch to save face?
The economic equivalent of “the central planners will get it right this time!” or “this time the regulators won’t be asleep at the wheel!”
Irony;
Next thing you know Bill Clinton will be chastising Americans for not respecting the sanctity of Marriage. Clearly the policies over the last 80 years have been anything but Keynesian and have all but proven that “market fundamentalism” is dead. Perhaps us free-marketers should have quit when the free market was proved fallacious under Bush and Hoover.
Why can’t people be more open minded and only accept the right model (Krugman’s of course)? And why can’t Republicans be more open, moral, and honest like the Democrats?
Krugman’s such an odious human being. The artificial economic coating he throws over his political tirades is transparent even to his like-minded peers (e.g. Mankiw). On the eve of the collapse of the entire Keynesian system, our friend here continues to rant about its wonders. I don’t know if his increasingly odd and out of touch posts are him grasping for the continued support of his slowly dying ideas or if he’s simply gone senile. Either way, someone close to him should get him to just stop talking; he’s proving himself more fraudulent by the day.
“Next thing you know Bill Clinton will be chastising Americans for not respecting the sanctity of Marriage.”
Look up “Larry Craig,” amigo.
Don’t get me wrong, I’m no fan of Paul Krugman. But it seems like the comments on this post underscore exactly what he’s talking about. People are quick to attack him without taking the time to understand his philosophy. First educate yourself, then engage him as an informed critic. Anything less just gives him more ammunition to attack his opponents as ignorant.
New Keynesian Economics
Josh, there must be hundreds of articles on this website that explain why Krugman is wrong about economics. If those arguments can’t convince you, then surely, philosophical debate on liberty must show that he’s a statist and an enemy of liberty.
you do realize that any student of Economics at a university is FORCED to learn this. It was just by chance that I came across Austrian economics, after I was on the brink of switching majors because I thought “New” Keynesianism was absolute crap.
Josh, I’m just a layman, but this paragraph from the link struck me as odd:
“Suppose General Motors announces its prices and then, after a fall in the money supply, must decide whether to cut prices. If it did so, car buyers would have a higher real income and would therefore buy more products from other companies as well.”
If General Motors lowers its prices, people will buy less goods from its competitors because a Chevy is a substitute for a Ford. This doesn’t make a lot of sense to me.
Krugman is engaging in projection once again. The only “epistemic closure” is on his part and that of the other economic illiterates that read the New York Times. Like Tom Woods, I look forward to the day when the NYT finally goes bankrupt.
@Josh –
There are some real nuggets on your link.
1. So my local gas stations do not change prices daily (up and down) because of menu costs — the cost to have an employee change the numbers with that long pole with suction cups.
2. The local gas station at the corner did not lower its prices today since, by doing so, the McDonalds next door would benefit.
3. New Keynesians advocate monopolies — coordination of prices. Or do they? Hmmm.
Thanks for the link.
I found what this new keynesian thing is just stating the obvious.
Like Jim’s gas station example. If they have a sale, there will be more people near the gas station. Therefore, nearby businesses may see their business increase.
I recalled an interview with Nintendo and Sony about the Ipod being a competitor? Sony said no. Nintendo said yes because it is a competing form of entertainment. Nintendo was right on the money.
If this is what this new economic thing is, I am not impressed.
The Left are the most close-minded bunch of people I have ever met. And they are most close-minded about the nature of reality itself. Krugman’s about as delusional as one can be.
Indeed, the link by Josh to the concise presentation of New Keynesian Economics by Greg Mankiw is illuminating. New Keynesianism seems to presuppose that the changes in prices are made in a kind of “automated” way that can slow down the necessary adjustements. The obvious answer is that these changes are a part-and a quite important one-of the decision process of the “entrepreneur”: they are not some sort of external or exogenous factors that impinge on the market process from the outside. If a change in price is costly but would bring a profit or reduce a loss, then the entrepreneur can compare these two effects and do what is best.
Furthermore, all these adjustements seem to presuppose (in Mankiw’s paper) quite big variations of the quantity of money. Could it be that New Keynesianism shows how difficult it is for an economic system to adapt… to Keynesian policies?
Keynesianism is pretty easy to understand. Just think nominally and abstractly. Money is wealth. Capital is homogeneous. Oh, and markets are stupid, but governments aren’t.
It doesn’t take a PhD to point out the flaws in such ridiculous logic.
Krugman- the Jethro Bodine of econ, but without the restraining hand of Uncle Jed.
Here’s Hulsmann on the topic as well.
New Keynesian Monetary Views: A Comment
I believe that Krugman looks at the Mises.org site every day. The argument he attempts to make is an argument that has been made against Keynesian economics as it relates to Austrian economics. If you look at the literature you will find book after book that compares Keynesian and Austrian economics and invariably Keynesian economics looks foolish. You will be hard pressed to find a book by a Keynesian that compares Keynesian to Austrian economics. If you spend any time on Keynesian sites, and I do, you will find that most posters have no idea what Austrian economics is. They do not even know the great economists of the past. I have even suggested to Keynesian college professors to include an alternative reading list for those interested but they have always refused. There is a systematic effort to prevent students from even hearing about Austrian economics.
All of that makes Krugman’s article laughable. I would challenge him to find 5 Keynesian economists who know anything about Hayek or Mises. But I give Krugman credit. I doubt he believes in the depths of his heart that Keynesian economics correct and he finds that Austrian economics is logical. So he protects his turf. He attacks Austrians at their strongest points before his readers can read the truth about Keynesian economist’s ignorance.
Wicked.. everyone is against him
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