Monday, September 12, 2011
Krugman, invasions by aliens, Keynes and hole digging.
Anti-Keynsians have been putting their foot in it big time recently by taking Keynes’s parable about pointless hole digging seriously.
Keynes made the point that the multiplier works even if the form of spending that sparks of a “mulitiplier episode” is pointless, like having people dig holes and fill them up again all day. At the same time he made it perfectly clear (for the benefit of the humourless) that he did not actully favour pointless hole digging.
Krugman, making the same point, gave as an example, spending money on defending the world from an invasion by aliens from outer space: an invasion which in the even turns out to be a false alarm.
Unfortunately a number of less than sophisticated folk have taken Keynes’s hole digging and Krugman’s hypothetical alien invasion seriously.
Two examples of these humourless economists are thus.
1. Wall Street Journal Op Ed article (para starting “The authors are careful….”).
2. The Cobden Centre
The moral is: keep humour, irony and words with more than two syllables out of debates on economics, else those simpletons will get the wrong end of the stick.
Actually economics is so complicated that it’s VERY GOOD IDEA to keep humour and all unnecessary words and syllables out of it.