Biographical Introduction
eople who read these reflections may wonder how I arrived at the understanding that socialism has failed. I am describing the whole experience in another book, but here a brief glance at the intellectual road I traveled may be helpful. It has not been so winding a road as some may think.
I stated the aim of my political activities in two articles in the Masses in 1916: not to reform men, or even primarily reform the world, but to “make all men as free to live and realize the world as it is possible for them to be.” In this the years have brought no change.
The yearly growth rate of the US consumer price index (CPI) fell to 0.4 percent in April from 2 percent in April last year while the annual growth of the producer price index (PPI) plunged to –1.2 percent last month against 2.4 percent in April 2019.
Furthermore, the yearly growth rate of the import price index fell to –6.8 percent in April from –0.2 percent in April last year.
Even those fortunate enough to have escaped infection by the Wuhan coronavirus will by now have noticed one of the virus’ many secondary effects: the disruption of the supply chain. Sick workers at meat plants, closed restaurants, hoarding, and the sudden spike in demand for things like ventilators, masks, and comestibles with long shelf lives have thrown the global flow of goods and services into disarray. Shelves are empty, crops are rotting in the fields—supply and demand are no longer matched, and the global economy is tying up in knots.
It has been a long time since I read anything by Paul Krugman, and seeing his most recent column simply reminds me why I’ve not missed anything.
Politicians and government health officials’ justification for decreeing shutdowns of vast swaths of American life has been deterring the spread of COVID-19. According to Federal Reserve chairman Jerome Powell, almost 40 percent of households earning less than $40,000 per year have a member who has lost their job in recent months.
Economics has lost its way and the study has become both impotent and lacking in relevance. It’s easy to see how and why once we recognize that proper economic thinking takes place two steps beyond the apparent. Noneconomists typically take none of these steps, while modern economics has lost the ability to go beyond the first.
This can, I think, be explained by economics’s increasing adoption of and reliance on mathematical and equilibrium models, which typically disallow the second step.
What are the steps?
