When Krugman is Right

An edited version of a lunch talk given to the annual meeting of Civitas, a Canadian non-partisan society for people interested in conservative, classical liberal and libertarian ideas.

This spring, the New Yorker ran a terrific poem called, appropriately enough, Poem by Donald Goetsch. It is a cleverly self-referential but ultimately moving treatment of how it came to be about what it ended up being about. To paraphrase it, what might a talk titled “When Krugman is Right” be about?

It might be about my brush with Paul Krugman. I first saw him in action in a seminar he delivered when I was a grad student at Yale. Reconstructing the timing from his online c.v., it must have been when he himself was a grad student at MIT. He was obviously really good: My classmates and I paid him what I’ve always thought the sincerest form of flattery: We were bitterly envious. 

Or, “When Krugman is Right” might be about Krugman’s views. For this talk, I read his last 10 New York Times columns. For the record, I agreed with the one where he says that President Obama is not responsible for higher gas prices. Most of the rest were about the need for more fiscal and monetary stimulus, including a deliberate increase in the target inflation rate for a few years. I don’t agree with that. It’s hard to see how anyone who lived through the 1970s could.

Still, Watson disagrees with Krugman. So what? Watson is known, a little, by Canadian conservatives. Krugman has a Nobel Prize, several best-selling books, dozens of academic articles in the very best places and, for 12 years now, a regular column in the New York Times. True, it’s not as if he’s Stiglitz. But still.  

In the end, this talk is about teams. To a certain extent, we conservatives are a team. And Krugman, who now here assumes a symbolic as well as a corporeal existence, is not on our team. The question I want to ask is: What courtesies and attention do we owe people who are not on our team? My answer is: quite a lot. And probably more than many of us have shown them lately.

Some of us, on our team, are strong, even prickly individualists, which means one of our core beliefs is that we don’t necessarily like teams. Even as prickly individualists, however, we are a kind of team. When we’re here together in the locker room, as it were, we have our disagreements, which are often spirited. But when we’re out on the ice playing the other teams arrayed against us, we go into the corners for each other and we watch each other’s backs.

What do we owe our team? And what do we owe the other teams? Let me talk about team loyalty in three areas: politics, history (the sequel) and rethinking liberalism.


The state of politics these days makes you believe in regress. And of course, as conservatives do believe in regress, things can get worse.

Why would anyone in their right mind go into politics? As David Brooks wrote recently in the New York Times:

Candidates enter politics wanting to be authentic and change things. But once the candidates enter the campaign, they stop focusing on how to be change-agents. They and their staff spend all their time focusing on beating the other guy. They hone the skills of one-upsmanship. They get engulfed in a tit-for-tat competition to win the news cycle. Instead of being new and authentic, they become artificial mirror opposites of their opponents. Instead of providing the value voters want – change – they become canned tacticians, hoping to eke out a slight win over the other side.

Was It Always Thus?

I recently downloaded the Lincoln-Douglas debates. Reassuringly to us, perhaps, Lincoln and Douglas spent the first two or three of their seven debates accusing each other of lying about each other’s positions.

The medium is the message, however, or at least their debates’ format is my message. Each debate was three hours: a one-hour lead-off by one of the candidates; a 90-minute rebuttal; and then a half-hour rejoinder by the first speaker. The arguments were complex and detailed. The language was often complex and detailed. Both men, but especially Lincoln, used humour and even wit. (When was the last time wit made an appearance in Canadian politics? We’ve been wit-free – witless, you might say – for decades now.) Ten thousand to 12,000 people came from miles around, many from states neighbouring Illinois, to listen attentively. They had to listen attentively or they couldn’t hear. Moreover, the debates were printed (and widely read) in the newspapers.

You can’t come away from reading these debates – our own Confederation debates would leave the same impression – without thinking 19th-century people were better than we are. There’s no question 19th-century politics was often nasty and partisan. Lincoln was called the most awful things in his presidential campaigns. Politics then had moments every bit as dreary and dispiriting as politics now. But, in part because of the greater time and space available for discussion, politics also had this wonderful bedrock of substantive argument that seems to have gone missing these days. 

What do we have? Question Period. Or, to be more accurate, Dodge-the-Question Period. Or Throw-the-Question-back-at-Them Period.

Question: Mr. Speaker, will the Minister tell us whether he has stopped beating his spouse?

Answer: I’m glad the Honourable Member asks that, Mr. Speaker, because it reminds the House that the Honourable Member’s own spouse found his ideas as unappealing as we do and left him, which we wish we could do now. His party’s spouse policies are sadly lacking. In its years in office, they beat their spouses much more often than we beat ours. In the next election, spouses all across the country will be voting for us, not them.

Everyone has talking points and doesn’t depart from them. Under repeated cross-examination by interviewers, politicians who we suspect may be of at least average and possibly greater intelligence repeatedly appear not to understand the question. Better to seem thick, their advisers presumably have told them, than to let slip the damning sound bite.

Don Cherry, sage of unintended consequences, tells us how bulletproof equipment has, ironically, caused more and more-serious injuries in hockey than when players were less protected. New technology is doing equivalent damage to politics, too.

They had the Lincoln-Douglas debates. We have Tony Clement’s Twitter stream. Should we really welcome a new medium whose root word is “twit”? When I was young, someone “gay” was light-hearted and full of joy. Someone who was a twit, well, you didn’t want to become known as a twit. But now, we’ve got a whole new communications technology based on it. Do we really want to follow the real-time thoughts of people who think their real-time thoughts so important we should follow them? I suppose it’s possible a 140-character limit will usher in a renaissance of epigram, a new age of aphorism. But I doubt it.

Politics obviously is important and necessary and in some respects not entirely hopeless. But as practised these days, it is mainly dreary, depressing, repetitive, mind-numbing and brain-dead. Few of our politicians seem to have interesting or even authentic things to say. And even if they did, they very likely would be punished for saying them by a “Gotcha!” press and Web. Not since Trudeau père has the press let politicians say interesting things – or even obvious things everyone knows to be true. Consider the lightning speed with which discussion of abortion or, a closely related subject, Michael Ignatieff’s views on separation, was recently dismissed. Mature, educated people – and we are, at least nominally, more educated than ever – should be able to discuss such things. Yet, our politics simply can’t handle them.

The rule now in politics is “Concede nothing.” We simply can’t admit the other side is even at least partly right on anything.

History: The Sequel

It turns out history didn’t end with the Cold War, after all. We are, all of us, much of our time, still engaged in discussing how societies do and ought to work. In such an enterprise, conservatives well know, humility is warranted. Humility is our program. Societies are obviously complex. The issues are obviously complex. Paul Krugman is a very smart guy. It’s not inconceivable that on many questions he is right. That doesn’t mean we need accept his world view or detailed platform.

At the core of conservatism, or at least a certain type of conservatism, is skepticism. We need to be skeptical of Krugman. But we also need to be skeptical of ourselves. One of President Kennedy’s favourite aphorisms was from Liddell Hart: “Avoid self-righteousness like the devil – nothing is so self-blinding.”

If you don’t accept skepticism and humility on their merits, consider them as tactics. The other side is getting much better at presenting its case. The Canadian Centre for Policy Analysis’ recent study of the incomes of the top 100 Canadian CEOs was marketed brilliantly. My frequent media adversary Armine Yalnizyan is writing columns in Canadian Business, of all places. The Left is sounding much more reasonable. It’s no longer your father’s NDP.

 John Crosbie used to say that the most important thing in politics is sincerity, and once you can fake that you’ve got it made. If we are not, in fact, fair-minded, we should at least appear fair-minded. (Philosophers and priests can then debate how to distinguish the truly fair-minded from those who merely behave in a fair-minded way for expediency’s sake.) The vast majority of Canadians either has not bought into a world view or won’t admit to having done so. If they see one side in an argument behaving reasonably and the other behaving haughtily and condescendingly, that is bound to affect their judgment. It’s always frustrating to have to rebut what you regard as elementary error, but it’s best done cheerfully, thoroughly and, if possible, with humour (a lack of which is Krugman’s greatest shortcoming). Ordinary folk may be fixated by smackdowns, just as they seem fixated by reality TV, but at bottom, they know it’s a fixation that’s both unbecoming to themselves and harmful to their society.

The arguments are complex. The great thinkers of the past who engaged in them are complex. Here’s a quiz. Who was it who wrote:

“Civil government, so far as it is instituted for the security of property, is in reality instituted for the defence of the rich against the poor, or of those who have some property against those who have none at all.”?

You might think Noam Chomsky or Karl Marx, but, in fact, the answer is Adam Smith (Wealth of Nations, Book V, Chapter 2, Part ii).

John Maynard Keynes comes in for lots of grief from our side. But Keynes was a deep, subtle, and in many ways conservative thinker. Friedrich Hayek himself respected Keynes and got along with him. A recent book on the two describes how in 1942 they either did or might have shared night-bomber watches for the Home Guard on the roof of a Cambridge college. If Hayek respected Keynes, we should be able to respect him, too, even while judging that some of his policy proposals may not have been right for 1936 and may be even less relevant to the problems of 2012.

Rethinking Liberalism

Finally, at the fundamental level of philosophy, we may profit by reconsidering some of the other team’s arguments. I’m just finishing a stimulating new book called Free Market Fairness by John Tomasi, the Brown University political theorist. It tries to create common ground between libertarians and classical liberals, on the one hand, and, on the other, the high liberals who, following in the tradition launched by John Rawls, now dominate North American university campuses.

High liberals, Tomasi argues, give moral weight to only a very limited range of economic freedoms, while libertarians regard “social justice” as an essentially meaningless phrase. As Hayek himself wrote, it “does not belong to the category of error but to that of nonsense, like the term ‘a moral stone’”. The acts of individuals can be just or unjust, but the income distribution that results from their voluntary interaction has no moral significance. It’s not a question of justice or injustice. It just is.

Tomasi believes high liberals need to recognize that ordinary people, especially as they become more affluent, place greater and greater weight on the freedom to make their own economic decisions and pursue their own economic goals. So, economic freedom should get equal billing with democratic freedom and civil rights. For their part – for our part – libertarians and classical liberals need to recognize that concern for social justice is widespread and real. Indeed, we often use it ourselves to justify free markets: They may not be built with the Rawlsian intention of making the least well-off as well-off as possible, but we never cease to argue that in fact that is what they do and are much more likely to do than the highly regulated, Tito-esque systems of the sort Rawls himself favoured.

It does seem unlikely that in the next few decades libertarians and high liberals will lie down together in peace and comity. But you never know what twists political theory will take and Tomasi’s approach is innovative and intriguing.

What do we do when Krugman is right? We do what adults should always do. We admit it.

Is it naive or utopian to think we can change the way political and philosophical debates are conducted? Probably so. But different modes of conduct certainly are possible. In January 1939, when former prime minister, former leader of the opposition R. B. Bennett left Ottawa for the last time to take up permanent residence in England, only three MPs saw him off at Union Station. Two were Conservatives but one was – surprisingly, shockingly – Tommy Douglas, whom Bennett had become friendly with and had tutored in the rules and procedures of the House of Commons after Douglas’s first election in 1935. Another surprising fact to emerge from P. B. Waite’s new biography of Bennett, where I learned about the Douglas send-off, is that despite being a micro-manager, Bennett as opposition leader from 1927 to 1930 could never be sure what the vote for or against a given measure would be. Members from all parties often voted against their leaders’ positions. 

Preston Manning recently observed that subtle or nuanced behaviour on the part of politicians is almost impossible in a media environment in which snippets of conversation can go viral. The incentives in such a system all work toward dehumanizing the participants. According to the current rules of the game, anyone videoed admitting error, uncertainty, lack of knowledge, indecision, irresolution, even partial understanding of the other person’s point of view – in short all the normal human traits – is punished in the media.

Is the situation entirely hopeless? Maybe, but maybe not. Above all, the media love novelty. Any minister who behaved in a recognizably human way, even by admitting imperfection, would attract attention. Any opposition leader who said a government had done something right and left it at that, without any “buts,” might well become a YouTube sensation. A newspaper or broadcaster that started a “Human Being Watch” and rewarded recognizably human behaviour by politicians might start a trend.

If Hayek and Keynes could disagree intensely and yet still get along, and Tommy Douglas and R. B. Bennett, too, surely we moderns can do better than we’ve been doing.


William Watson has taught in the Economics Department at McGill University since 1977. He was the department chair from 2005 to 2010. Born and raised in Montreal, he writes commentary weekly for the Financial Post section of the National Post and every other week for the Ottawa Citizen.

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