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Recollecting Professor Krugman by David Arthur Walters

Recollecting Professor Krugman by David Arthur Walters

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Published by davidwalters
Chapter Five in Waging War to Make Peace
Chapter Five in Waging War to Make Peace

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Published by: davidwalters on Sep 24, 2010
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09/08/2012

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Recollecting Professor Krugman 
 
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RECOLLECTING PROFESSOR KRUGMAN Waging War to Make Peace SeriesBy David Arthur Walters
Paul Krugman
Professor Paul Krugman, whose 2008 Nobel Prize in Economics "for his analysis of trade patterns and location of economic activity" astonished people who did notknow he was an economist, and classified him as a radical ideologue and columnistdevoted to liberal whining and denigrating conservatives, said that George Soros’desire to be taken seriously as an Open Society philosopher instead of as a speculatoris too ambitious. Neither Professor Krugman nor Philosopher Soros have much faithin free trade’s ability to compensate the poor for their suffering at the hands of therich in order to obtain social justice and stave off the desperation that leads waging revolution and war to make peace.Indeed, Professor Krugman has made a profession of biting the Invisible Hand for itsnatural meanness. He certainly is paid well enough for representing the opposition,many of whom found the ulterior economic motive for waging war objectionable to
 
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say the least. The pre-emptive blitzkrieging of countries, purportedly to save peoplefrom their oppressive regimes, has been the ideal military strategy since Frederick advanced it so well. The long-standing Real Politic plan underlying the shocking andawesome blitz was, first and foremost, to control the oil flow, and, secondarily, toimpose occidental republicanism on a people traditionally oppressed by orientaldespotism; if only their civilization were upgraded from its medieval backwardness,the obviously superior way of life of Western civilization as led by the United Statesof America would be safe; eventually the entire world would be made safe for Western capitalism, and duly incorporated for multicultural profiteering.Evolutionary capitalism would eliminate competition until a few multinationalcorporations beholden to international banks controlled the globe; all the rest, by nomeans inconsiderable in terms of total business done, would suck the hind teats of the whales in the shark-infested waters while thinking of themselves as free andindependent entrepreneurs. Capitalism would be perfected hence become itsprofessed worst enemy – fascism. The business of government would be business,and the business of business would be government. Utopian globalism would not berealized democratically although the myth of democracy would advance its cause; only a right-wing government could actually do the trick, making sure the means of production was privately owned and controlled, and keeping a large military presencethroughout the globe. Consumers would either consume or consume; producers would either produce or produce; citizens would vote for either business as usual orbusiness as usual. Mainstream Media would babysit; there would be plenty of pabulumto go around.One might think that Professor Krugman could win a Nobel for objecting to thatrather crudely expressed totalitarian scheme; but he seems to have left his politicalprejudices out of his economics, which is what scientists are supposed to do.Professor Krugman divined a “new” theory to explain a phenomenon of economicglobalization. An old theory, the theory of comparative advantage, held that relativedifferences in the economic environments of countries induced them to pursue theproduction of different products for their local markets, which they could thenrespectively trade with other countries, if there were surpluses, for what they mightrespectively lack. He calls this trade dissimilar-dissimilar trade. The “new” theory, thatof similar-similar trade, does not supplant old theories, but adds that economies of scale, the fact that large-scale production of diverse products is more economicalbecause less costly due to the efficiencies gained, has the effect that the localproduction for some local markets is supplanted by large-scale production for the world market, hence the same products wind up being produced and consumed, forexample automobiles, by several countries; the more efficient countries, those withclosely integrated economies of scale along the same product lines, wind up
 
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dominating world trade. The large-scale economy including cheaper transportationexplains why production is centralized and therefore more and more people live incities. In fine, world economic centers dominate world trade. George Soros, as wehave seen, believes the integrated world centers hold the world hostage; the poorerand less developed countries on the periphery getting the worst of downturns as theones in the center circle their wagons; hence the domination must be more socially i.e.economically just.Professor Krugman’s “new” theory, if we understand it rightly, rides piggy back onold theories. The theory that large-scale production is more efficient and better donein population centers is hardly groundbreaking; it is, to say the least, platitudinous. We wish that the professor had explained the role of waging war to make peace in theevolution of the temporarily increasing returns attributed to the large-scale efficienciesrealized through similar-similar trade between allies. There is no sin in platitudes if novelly expressed and accompanied by graphs depicting the results of complexcalculations.Professor Krugman may have gotten his Nobel for the same reason that PresidentObama got his, for opposing the political-economic regime of the neo-conservatives who waged war to make peace, to make the world safe for Western capitalism whether the world liked it or not – Mr. Soros might have gotten a Nobel for hisopposition to the Party of War if he had not almost brought down the Bank of England and wreaked havoc on Asian financial institutions to fund his philanthropiccontributions to open society activists. What Professor Krugman’s new scientific theory, which is more descriptive thanexplanatory, would predict, other than more of what it observes, i.e. business as usual, we do not know. We would ask him if he opposes centralization and favors thedecentralization that was promised by High Technology and Chairman Mao, but hehas been too busy with his calculations to respond to our questions.In any case, what do Nobel Prize winners in Economics really know that is of any proven practical value in a constantly changing future? This is a vital question in ourcontext of waging war to make peace; that is, if the pursuit of scarce property is afundamental motive for revolution and war, and if the broader satisfaction of needsand wants by economies of scale fosters peace. We think economists are more often wrong than right, and cannot be trusted toreliably predict anything – at least monkeys are better stock pickers. We might takethe advice of Sir Karl Popper and ask, Can economic theories be falsified, or do they tend to explain everything no matter what happens? Then they are not legitimate

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