Morning Must-Read: Paul Krugman: The Closed-Minds Problem
…I lived… in a world in which ideas… met in relatively open intellectual combat… [and] better ideas tended to prevail: if your model of trade flows or exchange rate fluctuations tracked the data better… you could expect it to be taken up by many if not most researchers…. This is still true in much of economics….
But people who declared back in 2009 that Keynesianism was nonsense and that monetary expansion would inevitably cause runaway inflation are still saying exactly the same thing after six years of quiescent inflation and overwhelming evidence that austerity affects economies exactly the way Keynesians said it would… founders of the Shadow Open Market Committee [Allan Meltzer] and Nobel laureates [Robert Lucas, Eugene Fama, Ed Prescott]….
This isn’t just a story about economics; it covers everything from climate science and evolution to Bill O’Reilly…. So what should those of us who really wanted to be part of what we thought this enterprise was about do?… I see three choices: (1) Continue to write and speak as if we were still having a genuine intellectual dialogue…. That’s one way to understand Olivier Blanchard’s now somewhat infamous 2008 paper on the state of macro; he was… trying to appeal to the better angels of freshwater nature. The trouble… [this] end[s] up legitimizing work that doesn’t deserve respect…. (2) Point out the wrongness, but quietly and politely. This… [is] useful to anyone who reads it. But nobody will.
(3) Point out the wrongness in ways designed to grab readers’ attention… ridicule… snark… names attached. This will get read; it will get you some devoted followers, and a lot of bitter enemies. One thing it won’t do, however, is change any of those closed minds. So is there a reason I go for door #3…. Yes–because the point is not to convince Rick Santelli or Allan Meltzer that they are wrong…. It is, instead, to deter other parties from false equivalence. Inflation cultists can’t be moved; but reporters and editors who tend to put out views-differ-on-shape-of-planet stories because they think it’s safe can be, sometimes, deterred if you show that they are lending credence to charlatans…. The inflation-cult story is, I think, a prime example…. It really would be nice not having to do things this way. But that’s the world we live in…