Economics as social artifact Jun 10, 2010
Krugman's book is less an auto-biographical account of how he came to hold certain liberal views and much more a brilliant short essay on the nature of economics and its anthropogenic basis. In short, our current economic system did not fall out of a tree, full-formed like an apple, but, rather, is the result of human action -- intellectual, political, moral.
He simply destroys the notion that there is, apart from society, some pure Newtonian economic realm that we ought not touch. In short, the invisible hand is invisible for a very good reason. It doesn't exist. If there is any hand at work, it is our human hand, and we ignore this ontological fact at great peril to our well being.
The important implication of this participatory view of economics is the observation that our middle class life after WWII was not the result of the economy's separate and natural maturation, but, rather, was the result of human intervention during The New Deal, a period he says that is called by economists The Great Compression.
We created our middle class by political action and decision during The Great Compression. And it has been by political action and decision that our middle class way of life is being dismantled by neo-liberal forces who have worked very determinedly to create "movement conservatism" to achieve this dismantling, the end of which is to return to the times of McKinley and the Gilded Age.
He makes the case that if we do not like what is taking place economically to us in the US, we must organize politically to make the necessary economic changes to restore a healthy middle class.
Mere hope is not a method.