Krugman’s blog, 7/3/13

There were two posts yesterday.  The first was “Nobody Pays Any Attention To What I Say:”

Or that’s what people keep telling me. Actually, one of the odd but revealing things about modern conservatives is the way they alternate between paranoia about the vast left-wing conspiracy and insistence that people who disagree with them are part of a tiny fringe with no real following. Joe Scarborough thinks (or thought — has he updated?) that I was all alone in questioning deficit panic; the fairly large anti-me industry has been insisting for around a decade that I’ve lost all credibility except among credulous New York liberals.

So, on the general principle that if I am not for myself, who will be for me: that left-wing rag the Wall Street Journal has a new assessment, based on some supposedly objective criteria (but not including Twitter followers) of the most influential business thinkers. They see a big change since the last time they did this, five years ago. Back then, business strategy gurus — authors of books on reengineering the search for excellence in the total quality six-sigma chaos, and all that — dominated the list. This time, the top thinkers are:

1.Paul Krugman
2. Joseph Stiglitz
3. Bill Gates
4. Michael Porter
5. Thomas Friedman
6. Eric Schmidt
7. Richard Branson
8. Malcolm Gladwell
9. Robert Reich
10. Jack Welch
11. Muhammad Yunus
12. Niall Ferguson
13. Michael Dell
14. Howard Gardner
15. Jimmy Wales

Let me say, the fact that Joe Stiglitz is up there makes me more optimistic about the world; as I’ve written in the past, he’s an insanely great economist, in ways that you really can’t comprehend unless you do economic modeling, but until now I would never have envisioned him having the kind of reach he now does.

Something else, which the WSJ doesn’t emphasize, is that the list isn’t just heavy on economists; it’s heavy on liberal economists. I don’t think that’s an accident, and I don’t think it’s purely political. The fact is that in an era of markets gone massively bad, conservative economists don’t have much to offer except excuses.

Obviously it’s not completely one-sided; going down the list a bit further I see proof that PT Barnum was right. But still, iinteresting.

The second post of the day was “Unprecedented Globalization:”

A couple of weeks ago I posted a chart showing the long-term trend of world trade in manufactures relative to world production. The paper I took the chart from, however, only went up to 2000. And I decided to update it for the next edition of Krugman Obstfeld Melitz. And it’s pretty striking:

You see the interwar trade decline; the growth in world trade after World War II didn’t return to 1913 levels of globalization until around 1970. But since then, trade has grown incredibly. Interestingly, the big tariff cuts in GATT rounds had already happened; what we’re looking at here is trade liberalization in developing countries plus containerization, and the emergence of massive vertical specialization (iWhatevers being made in many stages in different countries).

No special moral here — and no, it doesn’t actually make the world flat, because services account for most value added and are still mainly not tradable. But it’s quite a picture.



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