Monday, November 21, 2011

Paul Krugman's Wife as a Hater of Free Markets

That's the only conclusion that can be reached by reading her recent rant at the INET blog.

Paul Krugman's wife, Robin Wells, is a former research Professor of Economics at Princeton University. In her post at INET, she comments on the walkout of Occupy Wall Street sympathizer-students from the EC10 course taught at Harvard by Greg Mankiw.

Among her comments:
I am sure that many of us who have taught introductory economics or who have written an intro economics textbook (a much smaller subset, and I fall into both) felt a pang of sympathy for Greg when we heard about the walk-out. If you have ever faced a large lecture hall of restive intro econ students, or coped with a voluble student with an ax to grind, you can feel some solidarity: we are Greg Mankiw too.

But just how far should that sympathy extend? Is Mankiw simply the target of fuzzy-minded youth who are more intent on making a statement than engaging in reasoned inquiry? Or, is Mankiw – and much of the profession, for that matter – getting a needed reality check about the need to re-orient the way we teach economics?...

Compared to past years, instructors need to acknowledge the limits of free markets earlier in their courses. Students should understand the difference between the conceptual importance of free markets and their real world limitations. Explain that much of the current economic distress arises from markets that don’t behave competitively -- the labor and financial markets...

The dramatic rise in U.S. income inequality compels us as instructors to address it. While international trade and educational differences have clearly contributed to some of the rise, it’s clear that they are only partial explanations: they can’t explain the explosion of income gain at the top 1% of the income distribution, and particularly at the top 0.1%. We shouldn’t extol the benefits of markets while ignoring today’s highly skewed distribution of the benefits...

Again, I want to emphasize that we make the distinction between communicating the importance of free markets as an intellectual building block and the frequent mis-use of free market concepts when it comes to making real world policy choices.
Got that? Apparently, free markets are a theoretical construct that has limitations in the real world and the financial crisis was caused by free markets, and this needs to be taught sooner in college courses.

Yes, forget about the Federal Reserve and their driving interest rates below market levels as a cause of the housing boom and eventual bust, just blame it somehow on free markets. Forget about minimum wage laws and years of unemployment benefits, which intensify unemployment. In the mind of Wells, markets don't clear--at least when it comes to unemployment.

Yes, in the mind of Wells, free markets caused the current crisis, even though the crisis is at the very points where free markets are not in play and central planning is.

After setting up her strawman that free markets are to blame for the crisis, she calls for more government planning of the economy and that such planning should be taught sooner in econ courses. Yes, this is the message she sees in the student walkout. This is the "needed reality check" Krugman's wife hopes the economics teaching profession gets from the walkout: Diss free markets sooner!


  1. And let's not forget that poor must endure the rifle-butt end of the drug war, while a free market in private neighborhoods and schools would instanteously solve most of the problems related to excessive use of intoxicating drugs.

  2. If she didn't believe this she wouldn't have her position in life.

  3. Two peas in the same pod, what could one expect?

    Now if only the Harvard intro economic students will engage in more meaningful debate, perhaps between them and their professors outside of the classroom. Get Tom Woods or Bob Murphy to moderate. Make it a charitable event to raise funds.

  4. Having a PhD in economics in the Soviet Union was like having one in the US now: you've got to believe in central planning and that free markets are evil. And that our war in Afghanistan is going great, and that we'll be a superpower forever...

  5. I have come to the conclusion that the statements against the free market by main stream economists is merely job security. Without a central bank and without government meddling in economic matters, how many of these people would have a job?

    I think I remember Mises saying something along these lines in HA, but I can't remember exactly what he said; I'm sure it was more eloquent. Anybody have a link or chapter for my own re-study?

  6. A Harvard professor talking about expanded the power of the state. Fancy that.

  7. Free markets are a theoretical construct. Let's try them.

  8. Ah, yes! Those darn "policy choices"; they'll get you every time.

    What's a poor, free-moral agent to do when they're really nothing more than part of a "policy choice"?

    You've got to love the sleight-of-mind employed by her.

  9. My econ professors always told me (when pressed) that the mathematical models are just approximations and don't really reflect real life. Now actual markets only have "conceptual importance". What are you really learning in a mainstream university econ program?

    Not one of these people will even briefly entertain the idea that central banking is creating a Soviet like privileged class of individuals who are hooked into the main vein.

  10. Sounds like Pelosi blaming "Laissez Faire" policies. If this has been their idea of hands-off, I cringe to think of what their hands-on "solution" is.

  11. Well said! What it shows is that Robin Wells doesn't even know the definition of a free market (i.e. The array of voluntary exchanges that take place in society between two people or between groups of people represented by agents of goods and/or services). And of course that doesn't work!?! One needs the government bureaucrat in order to figure out how these exchanges should take place!

    Amazing how some of these people managed to get degrees or even jobs!!!

  12. 'Limitations' relates to 'free markets' in a similar manner as 'flames' relates to 'water'.

    Free markets are by definition markets without limitations.

    If you see a limitation in a market - it is not a free market.

    I think it is simple enough, no need to try to find a black cat in a dark room, especially when it is not there.

    This 'free market limitations' is the kind of bullshit all those 'professors' spend their lives on.