The best of Paul Krugman vs Reddit

Nobel prize-winning economist fields questions from "The Front Page of the Internet". What could go

Paul Krugman has a new book coming out, which means he is doing a lot of thing that one doesn't normally see from a Nobel Prize-winning economist. First he debated Ron Paul on Bloomberg TV, including a bizarre interlude involving inflation in third-century Rome. Then yesterday, he did a question and answer session with Reddit, the hugely popular social news site which brands itself "The Front Page of the Internet".

Under the headline IamA Nobel Prize-winning economist and New York Times columnist, Krugman – username nytimeskrugman – spent a couple of hours answering questions from Reddit users. Here are some of his best answers.

Responding to user sychosomat, who asked about the problems caused by the inability to perform experiments in economics, Krugman wrote:

Well, not being able to do experiments is a problem, but not as bad as all that. We do have statistical techniques for trying to sort out what's going on, although I'm skeptical about their power. But mainly we can look for "natural experiments", which often tell you a lot. In End This Depression I talk about how wars provide a natural experiment on fiscal policy; right now forced austerity in Europe is providing another set of natural experiments.

You may ask whether both sides in every debate won't nonetheless find ways to support their positions. My answer here is that this is not, in fact, happening. On the question of whether austerity is expansionary or contractionary, we had some alleged evidence for expansionary effects, but it was quickly shot down by the normal process of scholarly discussion. In any normal scientific debate, this would now be a settled issue.

I guess that what I'm saying here is that while the non-experimental nature of economics is an issue, the apparent inability to resolve differences that you see right now is about politics, not the inherent problems of the discipline.

Cthwaites asked how close we are to repeating the mistake in 1925, when Britain returned to the gold standard for seven disastrous years. Kurgman:

All around Europe's periphery they're doing it as we speak, er, type. The euro has served as the functional equivalent of the gold standard.

The difference for, say, Spain is that since they don't have their own currency, it's much harder to change course than it would have been for Britain under gold. But if you look at, say, Latvia, they're doing the full Churchill -- and being hailed as a role model even as they enforce a devastating slump on themselves.

Asked by Curbsidejohnman to give the best argument against austerity, Krugman replied:

I think it is to point out that if nobody is buying, nobody can sell. Austerity in a depressed economy makes the depression deeper, and that is, I believe, a point people can grasp. Of course, it's a point made easier to grasp now that the Irish and others have given us such clear examples of how bad the results of austerity can be.

Bloometal asked about Krugman's views on behavioural economics. Krugman wrote:

I think there's a lot of very good work in behavioral econ. But I don't expect a unified theory for many, many years. There are just two many ways the assumption of perfect rationality can fail, and I don't think we have enough broader understanding to put it all in one package.

That said, we can use behavioral econ even as it is, as long as we're modest about modeling. As long as we are prepared to say "this is how people actually seem to behave" without demanding general theorems -- for example the obvious reluctance to accept nominal wage cuts -- we can go a long way toward analyzing real-world issue in a way that can guide both prediction and policy.

Finally, one of Krugman's answers which works best without any context:

Shave around it every day, and get your wife to clip it fairly often.

(Oh all right, he was talking about his beard)

Photograph: Getty Images/Reddit.com

Alex Hern is a technology reporter for the Guardian. He was formerly staff writer at the New Statesman. You should follow Alex on Twitter.

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Politics doesn't just connect us to the past and the future – it's what makes us human

To those people who tell me that they’re not interested in politics, I often say: “But politics is interested in you!”

I have long been haunted by a scene in George Orwell’s great novel Nineteen Eighty-Four. Winston Smith, the hero, is forced to watch propaganda films depicting acts of war and destruction. He is moved by something he sees: a woman trying to protect a child by wrapping her arm around him as they are attacked. It’s a futile gesture. She cannot shield the boy or stop the bullets but she embraces him all the same – before, as Orwell writes, “The helicopter blew them both to pieces.”

For Winston, what Orwell calls the “enveloping, protecting gesture” of the woman’s arm comes to symbolise something profoundly human – an expression of selflessness and of unconditional love in an unforgiving world. Scenes such as this we now witness daily in footage from the besieged eastern Aleppo and other Syrian towns, people in extreme situations showing extraordinary dignity and kindness.

I read Nineteen Eighty-Four for the first time in late adolescence. I’d dropped out of sixth-form college without completing my A-levels and was commuting on a coach from my parents’ house in Hertfordshire to London, where I worked as a junior clerk for the Electricity Council. During this long daily journey – sometimes two hours each way – I started to read seriously for the first time in my life.

I was just getting interested in politics – this was the high tide of the Thatcher years – and Orwell’s portrayal of a dystopian future in which Britain (renamed “Airstrip One”) had become a Soviet-style totalitarian state was bleakly fascinating. Fundamentally the book seemed to me to be about the deep ­human yearning for political change – about the never-ending dream of conserving or creating a better society.

Nineteen Eighty-Four was published in 1949 (Orwell died in January 1950, aged 46), at a time of rationing and austerity in Britain – but also of renewal. Under the leadership of Clement Attlee, Winston Churchill’s deputy in the wartime coalition, the Labour government was laying the foundations of what became the postwar settlement.

The National Health Service and the welfare state were created. Essential industries such as the railways were nationalised. The Town and Country Planning Act was passed, opening the way for the redevelopment of tracts of land. Britain’s independent nuclear deterrent was commissioned. New towns were established – such as Harlow in Essex, where I was born and brought up.

To grow up in Harlow, I now understand, was to be part of a grand experiment. Many of the families I knew there had escaped the bomb-ruined streets of the East End of London. Our lives were socially engineered. Everything we needed was provided by the state – housing, education, health care, libraries, recreational facilities. (One friend described it to me as being like East Ger­many without the Stasi.)

This hadn’t happened by accident. As my father used to say, we owed the quality of our lives to the struggles of those who came before us. The conservative philosopher Edmund Burke described society as a partnership between “those who are living, those who are dead, and those who are to be born” – and I find this idea of an intergenerational social contract persuasive.

Progress, however, isn’t inevitable. There is no guarantee that things will keep getting better. History isn’t linear, but contingent and discontinuous. And these are dark and turbulent new times in which we are living.

A civil war has been raging in Syria for more than five years, transforming much of the Middle East into a theatre of great-power rivalry. Europe has been destabilised by economic and refugee crises and by the emergence of insurgent parties, from the radical left and the radical right. The liberal world order is crumbling. Many millions feel locked out or left behind by globalisation and rapid change.

But we shouldn’t despair. To those people who tell me that they’re not interested in politics, I often say: “But politics is interested in you!”

And part of what it means to be human is to believe in politics and the change that politics can bring, for better and worse.

What, after all, led so many Americans to vote for an anti-establishment populist such as Donald Trump? He has promised to “make America great again” – and enough people believed him or, at least, wanted to believe him to carry him all the way to the White House. They want to believe in something different, something better, in anything better – which, of course, Trump may never deliver.

So politics matters.

The decisions we take collectively as ­humans have consequences. We are social creatures and rational agents, yet we can be dangerously irrational. This is why long-established institutions, as well as the accumulated wisdom of past generations, are so valuable, as Burke understood.

Politics makes us human. It changes our world and ultimately affects who we are and how we live, not just in the here and now, but long into the future.

An edited version of this essay was broadcast as part of the “What Makes Us Human?” series on BBC Radio 2’s “Jeremy Vine” show

Jason Cowley is editor of the New Statesman. He has been the editor of Granta, a senior editor at the Observer and a staff writer at the Times.

This article first appeared in the 01 December 2016 issue of the New Statesman, Age of outrage