Krugman & Gould, Conclusion

Taleb (above) also, on October 19th, put his response to Krugman's dissing of Gould in twitter form: "How econ models fragilize (or how Krugman blames others yet does not understand much risk & economics)."

Daniel Davies then took up the twittering cudgels on behalf of Krugman, telling Taleb "your stuff always has one or two things in in that just can't be stood up."

Tweet fight! A wonky tweet fight about economic and evolutionary theory, but a tweet fight still. It came to my attention through Salmon's column, here.

And with that, I have said most of what I want to say on all this, except for three points: who is Daniel Davies? how much of a Ricardian is Krugman really? and, where do I stand on the underlying Krugman/Taleb debate over trade?

1. Davies? I don't know. His twitter account has nearly 3,000 followers, though.

2. Krugman and Ricardo. Here I admit my earlier reference was rather slighting. I said Friday that Krugman accepts Ricardo's theory "as essentially true, and his own Nobel Prize winning work has come from advancing understanding of the mathematical details that go with it."

Depends on what you mean by "essentially," and what you mean by "details." Krugman believes that Ricardo's theory requires at least one important qualification. Ricardo suggested that specialization and comparative advantage begin with differences in the countries involved that lend themselves to one sort of production rather than another: differences in the qualities of soil, or of climate, or the shape of a coastline amenble to navigation, or the like. Surely such differences exist, but Krugman's work has largely been aimed at making the point that economists don't need them in order to model the process of specialization. Specialization would happen anyway even if it had to work at first on accidents or or the results of a flipped coin. "We'll try the wine thing, we'll let you make clothes, if this comes up heads."

In Krugman's words, "both the embodied trade in resources - which allows countries in effect to trade abundant resources for scarce - and the ability, through trade, to concentrate industries (possibly arbitrarily) to achieve larger scale lead to higher purchasing power than countries would otherwise have." So Krugman is in a sense more Ricardian than Ricardo was.

3. Where do I stand? I'm not a great admirer of either Krugman or Taleb. I'm actually happy with the thought that they are taking each other down a peg.

I've expressed my own quarrels with Taleb in Proxy Partisans in a two-part discussion back in January 2009. I think the whole "fat tail" thing is a valid enough insight, but hardly as earth shaking as Taleb has often made it out to be, and his denigration of the contributions of other scholars (like Scholes or Merton) is both unjustified and tiresome.

Much the same thing is also often said of Gould, that the anti-gradualist "punctuated equilibrium" element of his thought, even among those of his colleagues who think it valid, is less momentous than he made it out to be while making his name.

I've also written about Krugman before: indeed, earlier this month in this very blog. So far as I can tell, he is right about trade, but wrong in his irrational fidelity to Keynsian fiscal rostrums especially in his more popular writings.

The most enjoyable fights are those where you hope they both lose.

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Jamesian Philosophy Refreshed

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