Paul Krugman's Asinine Take On Supporters of the Gold Standard

Paul Krugman

Paul Krugman has outdone himself.

He specializes in writing columns for The New York Times that don't pass the logic test but his July 13, 2019 column puts him at an entirely new level that makes him appear like the Sentinelese when they fired arrows at a helicopter.

He writes of those supporting the gold standard:

Now imagine yourself as a conservative who writes about economics, but who doesn’t have the technical proficiency and originality needed to get a good job in academia, an economic policy institution like the Fed, or a serious think tank. Well, becoming a vocal gold-standard advocate opens a whole different set of doors.

Is Krugman serious?

Most leading gold standard advocates have more technical proficiency than your average Keynesian flunky. (NOTE: By technical proficiency, he is talking mathematical proficiency)

The great pro-gold Austrian school economist Ludwig von Mises in his works not only wrote on the methodology of science but was at the forefront of originality in probability theory.

Murray Rothbard earned his Bachelor of Arts degree in mathematics from Columbia University.

And Friedrich von Hayek wrote an entire book, The Counter-Revolution of Science, which discussed the inferiority complex suffered by economists like Krugman who believe that the empirical methods of the physical sciences should be used in the fields of human action.

These are not men that lacked technical proficiency but rather despite their technical proficiency rejected the use of empirical methods and mathematical methods in the social sciences.

Hayek, for example, said this:

I don't want to be unkind to my old friend, the late Oskar Morgenstern, but while I think his book is a great mathematical achievement, the first chapter which deals with economics is just wrong. I don't think that game theory has really made an important contribution to economics, but it's a very interesting mathematical discipline.

To be sure there are flakes who occasionally call for a gold standard and Krugman focuses on them:

 [W]ould-be [Federal Reserve] appointees, like Stephen Moore and now Judy Shelton, have long records of supporting the gold standard or something like it. 

But these are just flakes that I have called out (SEE: Trump's Potential Fed Nominee Throws Gold Standard Under the Bus and The Wacky Monetary Policy Thinking of Judy Shelton). That said, the domain of gold supporters is not the only place you can find serious wackiness.

Krugman's anti-gold aggregate demand world has its own share of nutjobs. And none other than Krugman has reminded us of this. He recently wrote of one such group:

Now, arguing with the MMTers generally feels like playing Calvinball, with the rules constantly changing: every time you think you’ve pinned them down on some proposition, they insist that you haven’t grasped their meaning. So I was glad to see Stephanie Kelton responding to my attempt to clarify my problems with the doctrine in a way that seems to make at least some key differences in view clear.

 The problem is that I don’t understand her arguments at all. If she’s saying what I think she’s saying, it seems just obviously indefensible. If I try to explain that, will I be told again that I just don’t get it? Are we still playing Calvinball after all?...

Krugman's claim of a proficiency problem amongst gold standard advocates should more aptly be applied to Krugman himself for his lack of proficiency in applying the deductive method. I pointed out more than a decade ago in The Strange Mind of Nobel Laureate Paul Krugman, his lack of ability to understand the basic logic of business cycle theory.

You really have to wonder if he takes himself seriously. What's behind these absurd attacks?

Does he think we will forget what he said in 1998:

The growth of the Internet will slow drastically...By 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than the fax machine's.

Yes, Paul, fire an arrow at the internet and the gold standard.

Robert Wenzel is Editor & Publisher of EconomicPolicyJournal.comand Target Liberty. He also writes EPJ Daily Alert and is author of The Fed Flunks: My Speech at the New York Federal Reserve Bankand most recently Foundations of Private Property Society Theory: Anarchism for the Civilized Person Follow him on twitter:@wenzeleconomics and on LinkedIn. His youtube series is here: Robert Wenzel Talks Economics. More about Wenzel here.