Krugman

I enjoyed the recent New Yorker profile on Paul Krugman. I didn’t realize he was essentially apolitical until the Bush administration. By the end of that administration I was sick of reading Krugman, he was predictable–we all knew at that point (actually years before) what a disaster Bush was, on so many levels. But I’ve enjoyed reading him again on things like the health care debate and, in particular, financial regulatory reform.

I thought this was a particularly interesting point on how Krugman really made a name for himself:

One implication of Krugman’s theory was that, contrary to economic orthodoxy, industrial policy might have its benefits. If the location of a new industry was essentially arbitrary, then a government, by subsidizing and protecting its emergence, could enable it to gain such a lasting advantage that other countries would find it difficult to catch up.

It goes on to point out how he found the arbitrary nature of the location of industry “deeply disturbing and troubling”. What it made me think of what some people are calling China’s Green Leap Forward. I mostly complain about China, but I admire them in this respect, if they can apply Krugman’s theory to what they are trying to do, and leverage their advantages in engineering, cheap labor, and infrastructure, they could corner the market on what will (hopefully) be one of the biggest developing industries of the 21st century.

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