Economists on the Run

Paul Krugman has never suffered fools gladly. The Nobel Prize-winning economist rose to international fame and a coveted space on the New York Times op-ed page by lacerating his intellectual opponents in the most withering way. In a series of books and articles beginning in the 1990s, Krugman branded just about everybody who questioned the rapid pace of globalization a fool who didn t understand economics very well. Silly was a word Krugman used a lot to describe pundits who raised fears of economic competition from other nations, especially China. Don t worry about it, he said: Free trade will have only minor impact on your prosperity.

Now Krugman has come out and admitted, offhandedly, that his own understanding of economics has been seriously deficient as well. In a recent essay titled What Economists (Including Me) Got Wrong About Globalization, adapted from a forthcoming book on inequality, Krugman writes that he and other mainstream economists missed a crucial part of the story in failing to realize that globalization would lead to hyperglobalization and huge economic and social upheaval, particularly of the industrial middle class in America. And many of these working-class communities have been hit hard by Chinese competition, which economists made a major mistake in underestimating, Krugman says.

It was quite a whoops moment, considering all the ruined American communities and displaced millions of workers we ve seen in the interim. And a newly humbled Krugman must consider an even more disturbing idea: Did he and other mainstream economists help put a protectionist populist, Donald Trump, in the White House with a lot of bad advice about free markets?

via getpocket.com