Word Inflation: Disappointment Is Not Collapse

April 8, 2007

Word Inflation: Disappointment Is Not Collapse

Arnold's surprise surprises me. 0% growth for one decade during the next four in countries with plenty to eat counts as a "collapse"?

I think both Arnold and I would scoff if, say, Krugman claimed that the incomes of the poorest decile had "collapsed" because they were stagnant during one decade out of the last four. To say that it "seems like a collapse" to the poor because the income of the richest decile grew rapidly is scarcely more defensible. Whether you're talking about individuals, deciles, or countries, no improvement over a situation where you've got enough to eat and a life expectancy of 65 isn't in the same ballpark as a "collapse."

This reminds me of Austrians who say that the lack of economic calculation makes socialism "impossible," when they really mean that the lack of economic calculation makes socialism "somewhat more difficult." Free-market economists of all people should recognize the dangers of word inflation.