The Real America!
links for 2007-10-22

A Gathering of the Clans...

Economic historians, historians of economic thought, practitioners of political economy, and others are painting themselves blue with woad and practicing with staves after reading Stanford's David Kennedy's trashing of Paul Krugman.

Here is Gavin Kennedy:

Adam Smith's Lost Legacy: I treat what David Kennedy has written as they stand. That he quotes Francis Amasa Walker (1840 – 1897!) for his criterion of what constitutes and economist in 2007 suggests he is seriously out of touch, and that he associates Adam Smith with laissez faire supports this conclusion. Adam Smith was not the author of what passes today as ‘classical doctrines’ (an impossibly broad tent covering Malthus, Ricardo and Marx, from among which I would snatch Adam Smith).

The sentence including, “Adam Smith, whose fabled “invisible hand”, gives the game away. David Kennedy, a professor of American history, refers to the ‘fable’ of the invisible hand, but it wasn’t a fable of Adam Smith’s making; for Smith it was merely a handy metaphor when explaining why opening a domestic market to foreign goods for consumption would lead to higher domestic investment, partly by the foreign products competing with domestic products and partly by the risk avoidance of local merchants preferring to invest their capital locally. As the arithmetical whole is the sum of its parts, if local merchants invest locally instead of abroad, domestic capital formation will be higher than otherwise.

For 18th-century readers of Wealth Of Nations (Book IV.ii.9: p456), who were not economists – more likely to be legislators and people who influence them – he summed this process after clearly explaining it by using a common 17th-18th-century literary metaphor of the invisible hand (see Shakespeare’s ‘Macbeth’, Defoe’s ‘Moll Flanders’ or ‘Colonel Jack’, or Voltaire’s Oedipe: 'Tremble, unfortunate King, an invisible hand suspends above your head’; and ‘an invisible hand pushed away my presents’, etc.,).

The fable of the invisible hand has passed through the string of tenuous development.... Its origins are located in the environs of 51st Street, Chicago, and which has been propagated all over American academe, via its graduates and the media, until the fable is now regarded as the reality.... I would expect an historian to know this, or at least to be interested in it...

Here is Mark Thoma:

Economist's View: New York Times Review of "The Conscience of a Liberal": where's a decent reviewer when we need him? As Krugman notes in his response, David Kennedy is wrong about the history of prohibition, and the other "error" is a pretty trivial slip of writing 1964 instead of 1965. If those are the best examples of Krugman's errors Kennedy (as an historian himself) can come up with, then you have to conclude that Krugman is on pretty solid ground with the historical story he tells.

The review also ignores a lot of evidence from political scientist Larry Bartels on values voting that supports Krugman's position.... The values voting conclusions aren't things Krugman simply asserts - as you might conclude from the review - Krugman reviews solid evidence before coming to this conclusion.... [Kennedy] does not tell us about nor bother to try to rebut the careful, detailed discussion of right-wing institutions and their common funding sources that comes before this statement. Krugman's statement is a summary of this evidence, and to focus on the summary statement rather than than the evidence that supports it is not much of a rebuttal.

It's too bad that Kennedy chose to argue that, in essence, "Democrats have problems too" -- as though that somehow excuses Republicans for issues like racial politics -- rather than dealing with the evidence Krugman presents concerning the political and economic changes that produced the New Gilded Age...


Angry Bear: The NY Times review of The Conscience of a Liberal starts off with a brief resume of its author – Paul Krugman. This is followed by a really stupid statement: "And yet maybe Krugman is not really an economist..." Who is Mr. Kennedy thinking of when he says “most modern economists”? The know-nothing nitwits over at the National Review? They religiously believe in laissez faire. This is followed by attacks not only on the book but also the author...

Alex Tabarrok:

Marginal Revolution: Krugman Badly Reviewed: It will not surprise readers to know that I'd enjoy a good smash of Paul Krugman's book Conscience of a Liberal but historian David Kennedy's negative review in the NYtimes is more trash than smash.  First, there is a bizarre attempt to argue that Krugman is not an economist because he is not laissez-faire!... At this point I was willing to forgive. Unfortunately, the rest of Kennedy's review has very little meat.  If the best that historian Kennedy can say against Krugman's "factually shaky" history is that "Kansas, whatever its other crimes and misdemeanors, is not customarily regarded as the birthplace of Prohibition; the Voting Rights Act passed in 1965, not 1964." then maybe Krugman is on to something.  (For the record, the first point is arguable the second point is a trivial error.)

Worse yet, Kennedy agrees with Krugman when Krugman is wrong.... I don't understand the divisions within the liberal fold which explain Kennedy's review (he is no right-winger) but I know something is up when Tyler says "The Conscience of a Liberal is um... not that polemic.  It's not that shrill."  While liberal Kennedy says "Like the rants of Rush Limbaugh or the films of Michael Moore, Krugman’s shrill polemic may hearten the faithful, but it will do little to persuade the unconvinced or to advance the national discussion of the important issues it addresses."

My ultimate response to Kennedy's review?  I bought the book.

If David Kennedy had any arrows, I would suggest that he start practicing the longbow...