The economic consequences of canceling Keynes

How the right tried to ban useful economics — twice.

View in browser|nytimes.com Continue reading the main story June 1, 2021 Tim Gidal/Picture Post and Hulton Archive, via Getty Images By Paul Krugman Opinion Columnist These days it often seems that you can't turn on your TV without encountering a well-paid, influential figure being given copious airtime to explain how he's being "canceled" by our oppressive woke culture. Yes, some people really have been victims of unjustified smears, but the widespread exploitation of the "cancel culture" meme by people who are doing fine does some genuine harm. For one thing, all this whining on the part of privileged people has the (intentional) effect of distracting public attention from the enormous real injustices facing many Americans. It also makes it hard to talk about serious cancellation, which happens all the time. What should we be talking about when we talk about cancellation? It certainly doesn't mean saying mean things — I'm not "canceling" Bitcoin advocates when I suggest that much of what they say is "libertarian derp." It also doesn't mean ignoring points of view that have little claim to be taken seriously; The Times is under no obligation to publish guest essays by people claiming that satanic pedophiles control the Democratic Party. But there is a real phenomenon in which powerful interests try to block the dissemination of ideas they find threatening, for whatever reason. In fact, it happens a lot. So let me talk about one example I know a fair bit about: attempts to cancel Keynesian economics. I say "attempts," plural, because it has happened twice: an overtly political attempt to block the teaching of Keynesian economics in the 1940s and '50s, and a subtler freezing out of Keynesian ideas in the decades leading up to the 2008 financial crisis. Continue reading the main story ADVERTISEMENT John Maynard Keynes's theory that depressions were caused by inadequate demand, and that governments could cure them with deficit spending, was accepted by many American economists in the late '30s and early '40s. And in 1947, when the economist Laurie Tarshis published one of the first economic principles textbooks embodying the new doctrine, many schools decided to adopt it. But then came an organized smear campaign, with many university trustees and donors demanding that orders for the book be canceled. This campaign was successful, at first: Sales of Tarshis's book dwindled. It wasn't until a year later, when Paul Samuelson's "Economics" somehow slipped through, that Keynesianism became a staple of undergraduate courses. Right-wingers continued to complain — William Buckley's "God and Man at Yale" was, to an important degree, a screed against the horrible fact that Yale professors were teaching Keynes. But the blockade was broken for the time being. Round two was, as I said, subtler. In the 1970s some economists began arguing that Keynesianism must be wrong, because the phenomena Keynes described couldn't happen in an economy of perfectly rational individuals and perfectly functioning markets. Continue reading the main story ADVERTISEMENT You might consider this a weak critique — but in the culture of economics, with its demand for rigorous modeling, it carried weight. Defenders of Keynes, uneasy about a theory that relied on plausible descriptions of behavior rather than ineluctable mathematics, lacked all conviction; enemies of Keynes were filled with a passionate intensity. Just a few years into the anti-Keynesian backlash, influential economists were ridiculing the whole doctrine, declaring that whenever anyone engaged in Keynesian theorizing, "the audience starts to giggle and whisper to one another." Many economists privately continued to find Keynesian ideas persuasive. But it soon became common knowledge that major journals would not publish anything overtly Keynesian. During my own early career, I and others simply took it as a fact of life that if you wanted to get tenure, you would have to build your publication record in subfields that steered clear of the core issue of depressions and how they happen; you could sometimes smuggle some Keynesian material into your papers, but only if it came wrapped in a model that seemed to be mainly about something else. So Keynes had in effect been canceled. Then came the 2008 crisis and its aftermath, which demonstrated that Keynes had been right all along. The slump reflected a collapse in demand; governments that responded with deficit spending were able to mitigate the downturn, while those that practiced fiscal austerity made it worse. And the anti-Keynesian theories that had dominated the journals for several decades proved perfectly useless. Continue reading the main story ADVERTISEMENT It may also be worth noting that current policy debates continue to be conducted largely in a Keynesian framework. Critics of President Biden's policies, most famously Larry Summers, aren't disputing the stimulative effect of deficits — on the contrary, they're contending that the stimulative effect will be too big for the economy to handle. But the years of Keynesian cancellation had a heavy cost. Many economists entered the crisis ignorant of basic concepts that had been worked out many decades earlier, because you couldn't publish those concepts in the journals or teach them in many (not all) graduate programs. This intellectual impoverishment, I'd argue, weakened and distorted the policy response: We had a much worse, much more prolonged slump than we might have had if the ideas needed to fight the slump hadn't been suppressed. So yes, cancellation can be a serious issue and should be fought. Unfortunately, making that case is harder than it should be when so many privileged people conflate the real thing with not being invited to fancy dinner parties. Quick Hits My colleague Branko Milanovic thinks discussion of inequality was canceled. Some economists certainly tried. But I plead innocent. International macro stayed relatively sane. Feedback If you're enjoying what you're reading, please consider recommending it to friends. They can sign up here. If you want to share your thoughts on an item in this week's newsletter or on the newsletter in general, please email me at krugman-newsletter@nytimes.com. Facing the Music Free your mind.YouTube Mandolin Orange, renamed and better than ever. IN THE TIMES The Luckiest Workers in America? Teenagers. Teens are picking up jobs — and higher wages — as companies scramble to hire. But that trend could have a downside. By Jeanna Smialek and David McCabe News Analysis Our Digital Pasts Weren't Supposed to Be Weaponized Like This A recent firing at The Associated Press is the latest example of the way in which our digital pasts are never far from the present, despite what early internet evangelists thought. By Kashmir Hill Talk Ancient Rome Will Never Get Old. Take It From Mary Beard. "What the Romans are teaching is always at that meta level of what it might be like to take a view different from your own." By David Marchese Seminary Built on Slavery and Jim Crow Labor Has Begun Paying Reparations The Virginia Theological Seminary is giving cash to descendants of Black Americans who were forced to work there. The program is among the first of its kind. By Will Wright SUBSCRIBE TODAY New York Times Opinion highlights a range of perspectives and voices. This work is made possible with the support of subscribers. Please consider supporting The Times with this special offer. 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On Tech: The human toll of bearing witness

Smartphone videos are tools for bearing witness and holding the powerful to account. But they come at a cost.

View in browser|nytimes.com Continue reading the main story June 1, 2021 The human toll of bearing witness Glenn Harvey By Shira Ovide Bystander smartphone videos, like the one that Darnella Frazier took a year ago of the murder of George Floyd, have provided powerful documentation of acts of racism or police brutality. Phones and social media have also empowered people to tell their own stories and helped bring more attention to the mistreatment of Black Americans. But Allissa V. Richardson, a professor of journalism and communication at the University of Southern California, says that it's enough already. Videos like the ones of the deaths of Floyd and Eric Garner in 2014 are important legal and historical records, Dr. Richardson said, but those videos can repeatedly re-expose crime victims, their family members and witnesses to their worst moments. And they can make it seem like Black Americans need to provide proof of racist violence to be believed. "We in the public don't need these videos anymore," Dr. Richardson said. "They belong in the realm of the families and juries." Technology puts in people's hands the tools to bear witness, hold the powerful accountable and better understand our world. Dr. Richardson is asking us to balance those benefits against the costs of what happens to the people involved after the recordings end. Talking to her broadened my thinking, and I hope her comments do the same for you. Continue reading the main story ADVERTISEMENT Dr. Richardson, who wrote the book "Bearing Witness While Black," put the current era's bystander videos of police violence in historical context. She said there is a long track record of Black Americans forcing awareness of racist violence, including Ida B. Wells's accounts of lynchings, Mamie Till Mobley's insistence on showing the public her son's mutilated body and civil rights marchers' beatings in Selma, Ala., in 1965. In the past, however, Dr. Richardson said that Black Americans were sometimes able to choose for themselves whether and how to tell their stories publicly. That control is now more elusive. Philonise Floyd, a brother of George Floyd, has written about how he saw his brother die a thousand times in the last year. Frazier and Ramsey Orta, who recorded a video of Garner's death, have spoken about the toll the experience took on them. And Dr. Richardson said that photos or videos of violent attacks against mostly white Americans, including the 2017 mass shooting in Las Vegas, aren't typically replayed on endless loops. She also said that the videos of police violence against Black Americans create a cruel feedback loop in which future victims are expected to provide visual documentation of violence against them. "How many times do people need to see the same thing reiterated?" Dr. Richardson said. We can't ignore the benefits of technology that let people show their points of view to the world. But we also can't overlook the unintended consequences when life — particularly our darkest moments — is so public. Continue reading the main story ADVERTISEMENT Jeffrey Middleton, a judge in Michigan, recently attracted attention for lamenting that no one asked defendants or crime victims if they wanted to be in court proceedings that were webcast publicly. "Some of these have become embarrassing, perhaps humiliating," Judge Middleton said last month. I asked Dr. Richardson what we should do to mitigate the hurt of violent videos. She has written that news organizations should not show videos of people's death without the permission of the families, and that they should be more judicious about how often images of racist violence are shown. As for the general public, she suggested reconsidering watching or sharing videos of violence against Black Americans. It might be more productive to take actions like pushing for police reform laws or supporting political candidates whose policies you agree with. "We should celebrate the people who have the bravery and the presence of mind to record them," Dr. Richardson told me about bystander videos. "We should question the system that requires them to record them in the first place." If you don't already get this newsletter in your inbox, please sign up here. Continue reading the main story ADVERTISEMENT SUBSCRIBE TODAY If you've found this newsletter helpful, please consider subscribing to The New York Times — with this special offer. Your support makes our work possible. Before we go … The rural-urban digital divide: Politicians focus a lot on increasing internet access in unconnected rural areas. But my colleague Eduardo Porter writes that with limited taxpayer funds, making internet service more affordable and relevant in highly wired urban areas might bring more bang for the buck. Why can't we move past our long digital histories? Internet evangelists once predicted that being constantly online would make people more empathetic and forgiving about one another's past mistakes. My colleague Kashmir Hill explores why the opposite has happened. Here's why your Uber is probably more expensive: It's economics 101. There's more demand from riders than supply of drivers, and Uber and Lyft are paying drivers more and passing that cost on to you, my colleague Kate Conger reported. (Supply and demand imbalances are why lots of stuff, including lumber and rental cars, are more expensive right now.) Hugs to this Why did the moose cross the road? (You know how this joke ends.) Check out this great article with video clips of deer, a GIANT alligator, and coyote and badger buddies using tunnels and overpasses created for animals to safely cross major roads. We want to hear from you. Tell us what you think of this newsletter and what else you'd like us to explore. You can reach us at ontech@nytimes.com. If you don't already get this newsletter in your inbox, please sign up here. You can also read past On Tech columns. Continue reading the main story Need help? Review our newsletter help page or contact us for assistance. You received this email because you signed up for On Tech with Shira Ovide from The New York Times. To stop receiving these emails, unsubscribe or manage your email preferences. Subscribe to The TimesGet The New York Times app Connect with us on: Change Your EmailPrivacy PolicyContact UsCalifornia Notices The New York Times Company. 620 Eighth Avenue New York, NY 10018

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