It’s rather kind of him to lay out his political philosophy so succinctly so I can vomit once and get on with my life.
In all seriousness, I don’t believe any of his facts are in dispute, nor his interpretation of the facts. His description of the “Middle Class America” era (mid ’40s to late ’70s) is, as far as I’m aware, dead on. And I’m certainly in agreement with him that politics has played a more forceful role than economics in shaping people’s lives in the last century — though in my view for the worse pretty much whenever politicians get involved, and in Krugman’s view for the better when FDR gets involved and for the worse only when too many Republicans get involved.
But what he’s never been able to convincingly explain is why reducing inequality is the virtuous aim we should be striving for, and why this will cure the ills of society. And here Hayek’s The Road to Serfdom, one of the influences of the “Thatcherite Britain” to which he refers, offers some thoughts on why that is an insufficient answer:
That a government which undertakes to direct economic activity will have to use its power to realize somebody’s ideal of distributive justice is certain. But how can and how will it use that power? By what principles will it or ought it to be guided? Is there a definite answer to the innumerable questions of relative merits that will arise and that will have to be solved deliberately? Is there a scale of values, on which reasonable people can be expected to agree, which would justify a new hierarchical order of society and is likely to satisfy the demands for justice?
There is only one general principle, one simple rule which would indeed provide a definite answer to all these questions: equality, complete and absolute equality of all individuals in all those points which are subject to human control. If this were generally regarded as desirable… it would give the vague idea of distributive justice a clear meaning and would give the planner definite guidance. But nothing is further from the truth than that people in general regard mechanical equality of this kind as desirable. No socialist movement which aimed at complete equality has ever gained substantial support. What socialism promised was not an absolutely equal, but a more just and more equal, distribution. Not equality in the absolute sense but “greater equality” is the only goal which is seriously aimed at.
Though these two ideals sound very similar, they are as different as possible as far as our problem is concerned. While absolute equality would clearly determine the planner’s task, the desire for greater equality is merely negative, no more than an expression of dislike of the present state of affairs; and so long as we are not prepared to say that every move in the direction toward complete equality is desirable, it answers scarcely any of the questions the planner will have to decide.
This is not a quibble about words. We face here a crucial issue which the similarity of the terms used is likely to conceal. while agreement on complete equality would answer all the problems of merit the planner must answer, the formula of the approach to greater equality answers practically none. Its content is hardly more definite than the phrases “common good” or “social welfare.” it does not free us from the necessity of deciding in every particular instance between the merits of particular individuals or groups, and it gives us no help in that decision. All it tells us in effect is to take from the rich as much as we can. But, when it comes to the distribution of the spouils, the problems is the same as if the formula of “greater equality” had never been conceived.
I tend to disagree with Krugman because I dispute his claims that economic inequality is intrinsically bad, that greater equality is more critically important than universal (even if inequal) increases in human prosperity, that political action is the best force with which to deal with problems of human suffering, and that any good that is ever done by government is done by one party alone. And since I like to voice my disagreements, I suspect this won’t be the last time I mention Krugman’s new blog.
[Update 9/23/07: Tyler responds.]