Three Worth Reading for April 8, 2010
Mark Thoma Sends Us to Julie Hotchkiss of the Atlanta Fed on Layoff, Hiring, and Unemployment Rates

Hoisted from the Archives: Tyler Cowen Thinks Naomi Klein Believes Her Own Bulls--- (April 8, 2010)

Tyler Cowen Thinks Naomi Klein Believes Her Own Bulls--- : October 04, 2007:

He reads her book. He doesn't think it meets minimum intellectual standards. I think he is right: now I can borrow Tyler's ideas and have an informed view:

Shock Jock - October 3, 2007 - The New York Sun: Rarely are the simplest facts, many of which complicate Ms. Klein's presentation, given their proper due. First, the reach of government has been growing in virtually every developed nation.... [T]he reach of government has been shrinking in India and China, to the indisputable benefit of billions.... [I]t is the New Deal — the greatest restriction on capitalism in 20th century America and presumably beloved by Ms. Klein — that was imposed in a time of crisis.... China was falling apart because of the murderous and tyrannical policies of Chairman Mao, which then led to bottom-up demands for capitalistic reforms.... [T]he reader will search in vain for an intelligent discussion of any of these points. What the reader will find is a series of fabricated claims, such as the suggestion that Margaret Thatcher created the Falkland Islands crisis to crush the unions and foist unfettered capitalism upon an unwilling British public.

The simplest response to Ms. Klein's polemic is to invoke old school conservatism... reject[ing] the idea of throwing out or revising all social institutions at once. Indeed the long history of conservative thought stands behind moderation.... That tradition does advise a scaling down of free-market ambitions, no matter how good they may sound in theory, and is probably our best hedge against disasters of our own making. Such a simple — indeed sensible — point would not have produced a best-selling screed....

The clash between democratic preferences and policy prescriptions is, if anything, a problem for Ms. Klein herself. Ms. Klein's previous book, "No Logo" (2000), called for rebellion against advertising and multinational corporations, two institutions which have proved remarkably popular with ordinary democratic citizens. Starbucks is ubiquitous because of pressure from the bottom, not because of a top-down decision to force capitalism upon the suffering workers in a time of crisis.

If nothing else, Ms. Klein's book provides an interesting litmus test as to who is willing to condemn its shoddy reasoning. In the New York Times, Nobel Laureate Joseph Stiglitz defended the book: "Klein is not an academic and cannot be judged as one." So nonacademics get a pass on sloppy thinking, false "facts," and emotional appeals? In making economic claims, Ms. Klein demands to be judged by economists' standards — or at the very least, standards of simple truth or falsehood. Mr. Stiglitz continued: "There are many places in her book where she oversimplifies. But Friedman and the other shock therapists were also guilty of oversimplification." Have we come to citing the failures of one point of view to excuse the mistakes of another?

With "The Shock Doctrine," Ms. Klein has become the kind of brand she lamented in "No Logo." Brands offer a simplification of image and presentation, rather than stressing the complexity, the details, and the inevitable trade-offs of a particular product.... Klein... admitted that brands were never her real target, rather they were a convenient means of attacking the capitalist system more generally. In the same interview, Ms. Klein also tellingly remarked, "I believe people believe their own bulls---. Ideology can be a great enabler for greed."

When it comes to the best-selling "Shock Doctrine," that is perhaps the bottom line on what Klein herself has been up to.

Five points:

  1. Margaret Thatcher did not create the Falklands War in order to crush unions and implement the rest of a domestic program that could barely get 40% of the vote, but she did take advantage of it--of the popularity generated by a short victorious war--to do so. There is only a very small amount of moral fault there: had she provoked the war for domestic political purposes there would be a great deal of fault, but she did not.

  2. Tyler is right: Stiglitz ought to know better, for degrading the level of the debate is in your long-run interest only if you are one of the bad guys. And we are not.

  3. Some governments can be trusted to run mixed-economy social democracies: those of Western Europe, of the British Dominions, of the islands and peninsulas off the coast of East Asia, and of California, Oregon, Washington, Wisconsin, Minnesota, New York, and New England come to mind.

  4. Other governments cannot be trusted to run mixed-economy social democracies: Ghana and Zimbabwe and Egypt and Cuba and China and Mississippi come to mind. We do not know even much about how to predict which governments will fall into which category. We do not know how to change governments from one category to another. We do not have alternatives to recommend to governments that cannot run effictive mixed-economy social democracies.

  5. And so the best advice really is Keynes's response to Trotsky: "Granted his assumptions, much of Trotsky's argument is, I think, unanswerable.... But what are his assumptions? He assumes that the moral and intellectual problems of the transformation of Society have been already solved--that a plan exists, and that nothing remains except to put it into operation.... An understanding of the historical process, to which Trotsky is so fond of appealing, declares not for, but against, Force at this juncture of things.... All the political parties alike have their origins in past ideas and not in new ideas and none more conspicuously so than the Marxists. It is not necessary to debate the subtleties of what justifies a man in promoting his gospel by force; for no one has a gospel. The next move is with the head, and fists must wait..."

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