What I Think Tank

Robert Murphy vs Paul Krugman

with 6 comments

I wanted to use Robert Murphy of the Austrian School of Economic vs Paul Krugman the Nobel Laureate King of Keynesianism as the title for this post, but I was afraid that it might be a little bit too long, although it does give you a better idea of what the essence of this is.

Paul Krugman, for anyone who has ever read his pieces in the New York Times or has seen the attempts of Austrians to argue against his positions, will know that he at times has taken some swings after Austrians, for instance calling Austrian Theory “a theory that I regard as being about as worthy of serious study as the phlogiston theory of fire“. While he may very well be right to think so, one could question why he won’t debate anyone of the Austrian School. Peter Schiff has repeatedly challenged Paul Krugman straight out, saying for instance that he should return his Nobel Prize, because he doesn’t understand economics, and Andrew Schiff, Peter’s brother, has even tried to come in contact with Krugman to make arrangements for such a debate. All Krugman would have to do was to meet up and slaughter Peter Schiff in front of everyone, with the world as his witness. Instead, Paul Krugman tries to take easy jabs now and then, with pompous comments like “I do know that I keep being told that Peter Schiff has been right about everything; so, how’s that hyperinflation thing going?

The latest attempt at luring Paul Krugman out of his cave comes from Robert Murphy, a fairly ‘recent addition’ to the long line of scholars in the Austrian School of Economics, one who at several occasions has taken on Paul Krugman’s arguments in his articles and seems to be well acquainted with the content of a possible debate.  What is unique with his attempt is its appeal to emotions and moral conscience. Currently, only 5 days after the challenge has been made, almost 29,000$ has been put into the pot to see a debate between Robert Murphy and Paul Krugman happening.

“Why is there money involved?” I hear you ask. The idea is to raise as much money as possible that will be donated to the Fresh Food Program of FoodBankNYC.org.

Food Bank For New York City works to end hunger and increase access to affordable, nutritious food for low-income New Yorkers through a comprehensive group of programs that combat hunger and its causes.

There is a hunch, however: The money will only be donated if and when Paul Krugman accepts to debate Robert Murphy for one hour. These are the terms:

See Paul Krugman debate Robert Murphy on Keynesian versus Austrian business cycle theory! Moderated by Ezra Klein, or another moderator of mutual choosing.

If this objective is met, then the money (after 5% to The Point) will go to the Fresh Food Program at FoodBankNYC.org.

Why the Food Bank For New York City? Well, why not? It’s as good a cause as anything else, and since Krugman just happens to write in the opinion pages for The New York Times it probably just fits the occasion, not to mention that this would be a very nice present in the upcoming holiday season for the hungry men, women and children of New York. If 100,000$ were to be raised, that means 95,000$ cash in food for the hungry, and all Paul Krugman would have to do is meet up at the Mises Institute in Alabama, skewer Robert Murphy like a sow at the buffet, cash the money for FoodBankNYC and get back on his plane home. Even his supporters and academic equals would hound on him to accept.

That is why it will be quite hard to see how Paul Krugman could ignore this offer if it becomes big enough. Think about it, how could anyone ever say “No, I will not be ‘tricked’ into doing something I have regarded as too easy for all these years, because I do not care enough to do something that could feed the hungry of New York”? Unless, of course, it is an awful (or even evil) person, or at the very least wishes to be regarded as one by everyone else.

What do I think? It’s quite unique and it could get huge. I urge everyone to put down some money, even if it’s just a small amount. Everyone can afford 10$, and for Americans it’ll even be tax deductible. Remember, you will not lose the money unless Paul Krugman accepts the challenge. But will he? While it might be hard to see how he can ignore this, I’m quite certain the odds for you keeping your money is high. No matter how big it gets, he’ll act like this doesn’t exist, that he hasn’t had the time to read all the comments and mails he receives that urges him to accept, because he’s such an important person and hasn’t had time for that, or he’ll disregard it as some kind of hoax/set-up/scam if he ever actually gets faced with it. Let’s be frank, he’s somewhat of a coward when it comes to debating Austrians.

So I do not keep my hopes up high, but I’m as hopeful as ever. Let me make it clear that I’m not necessarily thinking this is gonna be some kinda “blood-fest” where “my Austrian guy” will shred the “Keynesian fool” to pieces. While I may think Paul Krugman is a fool, he’s also a smart one, even if he doesn’t know economics – like his “Princeton brother” over at the Federal Reserve. I’m actually hoping for an informative, educational and interesting debate where you would truly see two different ways of understanding the world try to make their cases and reveal weaknesses in each others sides, and perhaps give the audience something to think about. I for one enjoy listening to a spoken debate much more than seeing two sides battle each other over blog posts in a chaotic fashion. It’s much more dynamic and real, even if it might be viewed as unfair to some, since a lack of charisma will shine through a lot easier and will appear to weaken the power of the argument. I do have to admit my opinion that I do not find Robert Murphy to necessarily be the most charismatic of speakers, at least not compared to a person like Peter Schiff, who with his many comedic metaphors and stories would render Paul Krugman a dull zombie, but he is a genius, and while he may not have the speechcraft of a politician, it should be noted that Paul Krugman really isn’t the most eloquent speaker around either, at least not from what I’ve seen of him, so I think it’s much more fair and honest this way (not to mention more likely to happen). They’re not embarking on any political campaigns after all. Sadly, though, it will not gather the same publicity as it would with Peter Schiff, but you give some and take some.

I nonetheless think Robert Murphy is more than well up for the task, and he has at the very least found a very interesting and powerful way of making this happen. Time will tell if it will ever become a reality.

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6 Responses

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  1. I like your style, man. Where are you from?

    I was half-joking about the Keynes conspiracy. But it seems to me that there is a direct correlation between the birth of his economic theories and the rapid expansion of western government.

    What I find interesting about Keynes is that, at least from the pieces I’ve read by him, he more or less seems to advocate government intervention only in extreme cases. For instance, he argues that, if the economy is in bad enough shape, it might make sense to ignore the broken window fallacy. But it doesn’t seem like he would advocate for that kind of intervention, ya know, all the time. Just in times of extreme shit-fan-hitting.

    Obviously the arguments against Keynes are far and wide-spread, but I think my biggest is that it seems very fake, for the lack of a better word. ‘Creating demand’ doesn’t seem real to me. People have infinite demands; why should you have to create demand? The only scenario where I could maybe bend a little would be in deflationary periods, but those are so rare that it’s kind of a moot point. But the idea that you can just give people a bunch of money which literally came from nowhere and that somehow their increased demand will get the economy rolling good enough to out-weigh the side effects of the artificial demand creation…… yeah, I’m just not buying it. I feel like, as with most governmental policies, it attempts to distort reality, and physics tells us that for every action there is a reaction. The reaction to un-needed government spending is higher future taxation or the de-valuation of the currency; one of these two(or a combination) are an inevitability.

    It absolutely frightens me that our currency, literally, is held up by the ignorance of the masses. Nobody can honestly think we can collect $43,000 or whatever it is from each person in the country in taxes to pay back our debt. So the only other option is currency de-valuation. I have no idea when that will start happening but I’m not looking forward to it.

    Jack Clutch

    October 28, 2010 at 1:42 am

    • Thanks! I’m from Norway: the stronghold of modern socialism; the country that gives Michael Moore wet dreams.

      I think there are many things that are forgotten or misunderstood with Keynes. He died already in 1946, which means that his theories spread without his control after the war. Hayek, who knew Keynes personally, has even said in interviews (http://www.youtube.com/watch?v=Oqhe4K1Jz-8) that Keynes was an opponent to inflation. Seems to me to be kinda ironic (although as Hayek said, Keynes wasn’t very consistent or logical), but after the war, when the crisis was over all, governments kept on with their inflationary policies… a lot. So this would be against Keynes’ intentions. The way I understand it is that he wanted to have a careful government in good times, and only have it spend massively when the public will not. But then again, you should only judge something by its result and not the intentions, and we know very well the result of his works today.

      Right. I’ve always used the comparison to a smoker when it comes to government spending. When we know that government regulation and gross government spending are causes of economic turmoils, saying that more government interventions in the economy will cure the turmoils is like saying that a guy, that is completely unable to feel a buzz from smoking and now has health problems from smoking 40 a day, should start smoking 120 a day to help him get over the health problems and perhaps feel that buzz again from more nicotine. Indeed, he may get that buzz again, but that’s not gonna help him much when he gets used to smoking 120 a day. When the buzz is over all he’s left with is a fast approaching death. If he really wanted to tackle his health problems he should stop smoking entirely and let his body naturally expel all the tar from his lungs and get over the nicotine addiction. Increased government spending is not gonna let us do that.

      It always angers me when you hear people say “gold only has value because we believe it has value” and then go on to defend their paper money. The extreme ignorance of such statements on business programs on television networks is beyond all reason. Fiat currencies are only backed by the belief in the system, which is based on public ignorance. If people knew how it has no value, and that the little value it’s imagined to have is constantly being stolen by government through inflation, they would surely wish to price their things differently. If people had a choice, they wouldn’t be using fiat currencies at least, that’s for sure.

      Morten Rolland

      October 28, 2010 at 3:02 am

  2. Other than just being a pussy, why do you think PK chooses not to debate Austrians?

    Jack Clutch

    October 27, 2010 at 3:23 am

    • I think there is a number of reasons… Some might think that he is afraid of “losing” and made fun at, but I don’t think he is of the opinion that he will ever be made to look like an idiot, because it would make little sense for him to continue making jabs at Austrians if he didn’t think they’re an easy target. Time and time again he has seemed to think it’s “obvious” that Austrians are wrong. He doesn’t give Austrians much credit at all. And that might just be it – he doesn’t think that it’s worth his time debating someone who in his mind is obviously so wrong. By debating someone you’re saying they deserve to be listened to and present a fair case, and so I don’t think he wishes to give anyone of the Austrian School the honor of his presence. I think this is part of this ‘intellectual snobbery’ which seems to be very usual among intellectuals and federal politicians in America these days, and is something I find fascinating. I will probably write about it.

      But there is also the fact that he has been somewhat “chased down” by Austrians – not only by people who wishes to debate him, but I read a very funny article lately (which had actually been written already in early august: http://www.americanthinker.com/2010/08/paul_krugman_gives_up_1.html) about how Paul Krugman was beaten into submission by commentators who seemed to be very Austrian-ish, at least from the look of it, on his New York Times website. It became such an annoyance of his that he started blocking comments that he deemed to be nothing but “whiners”, when they had done nothing but discuss the economics he presented. A sense of defeat, indeed. It seems to me he doesn’t handle the direct debate very well, which could explain why he avoids it. Which is a pity, because I’d personally really enjoy the debate.

      And all of this put together – along with him being “a pussy”, as you so nicely put it – is why I think he will never take Robert Murphy up on that challenge, yet it’ll become a bigger and bigger torn in his side as the number grows for that campaign. It will be truly fun to see how it will pan out, especially when the number gets simply too big for him to ignore. At this point he probably just hopes it won’t become big enough to care about.

      Morten Rolland

      October 27, 2010 at 6:12 am

      • Obviously you cannot reason with people who feel like they are above your logic, but it seems silly that he holds such a low view of Austrian theories. Especially considering that, before Keynes, Austrian theory was more or less mainstream.
        It’s like creationists vs evolutionists. I don’t think there are many evolutionary biologists who would refuse to debate creationists; they would likely see it as an easily winnable debate.
        I think you’re onto something in that maybe he’s just not a good debater.
        Maybe he’s a good writer/philosopher but just isn’t quick enough on his feet to debate. So, to avoid having to do so, he places himself on some sort of pedestal where he is not even willing to entertain the ideas of ‘lower’ theories.
        Obviously my opinions are skewed, but it seems to me that as more and more people in the general public become active in politics, they are also beginning to read and understand more and more about economic theories. And it seems to me that most of this new blood is way more Austrian-leaning than Keynes-leaning (case #1: the TEA party). Of course, that sorta plays into the liberal notion that the masses are idiots and only the elite, super-educated few have the capacity to lead and organize our society, so of course the stupid ‘citizenry’ would go for Austrian principles and reject Keynes because they are too stupid to understand him.
        I’m still pretty sure Keynes was part of some conspiracy of governments to write ‘rational’ arguments for the expansion of economic power in centralized governments. But hey, that’s just me.

        Jack Clutch

        October 27, 2010 at 3:26 pm

      • Indeed. It seems that he prefers the work in solitude, by theorizing and researching – which as far as I know is all he did to get the Nobel Prize, but he’s not much of a teacher/debater. And I guess that’s fair enough, few professors are, but if he sticks his neck out like he does, he should be able to stand up for himself too, and not just go into a shell whenever someone challenges him on his own words. That’s when he gets the brand of a coward. He uses his fame to spread his message, but when someone comes along to debate his economics, he’ll flip them the middle finger and go home. It’s silly.

        The creationist vs evolutionary comparison doesn’t really work for me, although I know what you mean. Creationism is based in faith per definition, not science, so to say that Austrian Economics is like creationism in the sense that evolutionary biologist would see it as an easily winnable debate is to say that Keynesians can simply point out a basic logical fallacy among Austrians to win any debate… Which I guess they think they can do, since everybody seems to repeat the same crap that Austrians completely ignore empiric knowledge etc. But that is based on intellectual snobbery, not because Austrian Economics isn’t economics (actually, I think it’s a faith in government that makes Keynesianism more related to creationism in this sense, but then again, I’m not here to talk down on creationism). When we’re on the topic, there are tendencies of the same snobbery among evolutionary scientists too, but in a different way: It’s become a public relations issue around debating evolution among scientists, because that would make it look weak in the eyes of the public, and would drive the ordinary minds into thinking that maybe creationists have something good to say after all. Personally I think that’s thinking people are dumb, and I really don’t like that, and that’s the same kinda intellectual snobbery you’ll see among people from fancy universities or in public office. It’s not just liberals. You’ll see the same notion among many conservatives. They think that people aren’t responsible or smart enough to take care of their own personal lives. It’s dangerous, and that’s another thing the Tea Party has identified and rallies against. But the fact of the matter is that people aren’t stupid. People actually do get quite a bit, and they can understand when someone who is running the country think they are overly wise and distances themselves from the public and destroy people’s lives with misguided government programs, laws and regulations, and they can actually see how government indeed does damage the economy, how they created the recession and how more of the same can’t possibly be the remedy for our problems. Debt isn’t good. Taxes aren’t good. Regulations aren’t good. Government isn’t good. Even if that’s the only thing people know and care about, that means they know more than everyone on Capitol Hill.

        I like that people doubt government, and it’s even better to see people turn to Austrians and Libertarians for inspiration in understanding why they have a doubt in government. It’s the academic and intellectual road to anarchism, backed with reason and strong economics. It’s wonderful 🙂 I’m not so sure it’s only your skewed opinions that would make you think so. I think it’s becoming more and more popular to have a doubt in government. People simply wish to have some sort of power of self-determination in their lives. They wanna live their lives their own way. I think of myself as one of the new additions to “this side”. I’m fairly young and grew up in the most isolated social democratic place in the world, and I found my way to Libertarianism and Austrian Economics without the help of anyone. And by the look it, I think it happens more and more. I doubt I’m a rare case.

        I rarely dwell around with conspiracies. I’m not sure if Keynes was “hired” to create his General Theory. I think it’s easy to understand why he came to think what he did. There was a growing notion in the 20s and 30s, and definitely in the 40s, that “government could work well if done right”, and the second world war gave people the idea that government has the ability to do everything, especially when they just beat Nazism and saved the world. And thus you see this crazy social democratic experiment playing out in Europe where they think they save the world every day, and it hasn’t stopped yet.

        Morten Rolland

        October 27, 2010 at 7:53 pm


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