What really upset me about Krugman’s column is not the bizarre economics but the illiberal politics. In the last twenty years China’s economic growth has lifted hundreds of millions of people out of poverty and nearly unspeakable deprivation. China’s abandonment of communism is one of the great humanitarian events of all time. And what does Krugman have to say about this improvement in well being? (I paraphrase).
‘Watch out. Now is the time to panic. Their gain is your loss.’
It’s hard to over-estimate how awful Krugman’s column is. Consider this:
China, unlike Japan, really does seem to be emerging as America’s strategic rival and a competitor for scarce resources…
‘Strategic rival’ is the kind of term that would-be Metternichs throw about to impress their girlfriends but what does it mean? Everyone is a competitor for scarce resources. Even those nice Canadians compete with Americans for scarce resources. Are Canadians a strategic rival to be feared?
The real question is how do rivals compete? Do they compete with war or by trade? China is moving from the former to the latter but shockingly Krugman prefers the former. Exaggeration? Consider this statement:
…the Chinese government might want to control [Unocal] if it envisions a sort of
"great game" in which major economic powers scramble for access to
far-flung oil and natural gas reserves. (Buying a company is a lot
cheaper, in lives and money, than invading an oil-producing country.
So what does Krugman recommend? Blocking the bid for Unocal. In other words, support China’s fear that they may be cut off from oil and encourage the invasion of an oil-producing country.
Nothing can harm the prospects for world peace more than the vicious
idea that we do better when they do worse. The Chinese and Americans people already have enough mercantilists,
imperialists and “national greatness” warriors pushing them towards conflict, what we need on this issue are liberal economists like the wise Brad DeLong who writes:
It is very important for the late-twenty first century national
security of the United States that, fifty years from now,
schoolchildren in India and China be taught that America is their
friend, that it did all it could to help them become rich. It is very
important that they not be taught that America wishes that they were
still barefoot and powerless, and has done all it can to keep them so.
How is it that Brad DeLong and I should agree so completely? It is because neither of us has forgotten our heritage as economists. Here then is the enlightened humanity and wisdom of the first liberal economist.
Each nation foresees, or imagines it
foresees, its own subjugation in the increasing power and
aggrandisement of any of its neighbours; and the mean principle of
national prejudice is often founded upon the noble one of the love of
our own country. The sentence with which the elder Cato is said to have
concluded every speech which he made in the senate, whatever might be
the subject, ‘It is my opinion likewise that Carthage ought to be destroyed,’
was the natural expression of the savage patriotism of a strong but
coarse mind, enraged almost to madness against a foreign nation from
which his own had suffered so much. The more humane sentence with which
Scipio Nasica is said to have concluded all his speeches, ‘It is my opinion likewise that Carthage ought not to be destroyed,’
was the liberal expression of a more enlarged and enlightened mind, who
felt no aversion to the prosperity even of an old enemy, when reduced
to a state which could no longer be formidable to Rome. France and
England may each of them have some reason to dread the increase of the
naval and military power of the other; but for either of them to envy
the internal happiness and prosperity of the other, the cultivation of
its lands, the advancement of its manufactures, the increase of its
commerce, the security and number of its ports and harbours, its
proficiency in all the liberal arts and sciences, is surely beneath the
dignity of two such great nations. These are all real improvements of
the world we live in. Mankind are benefited, human nature is ennobled