Scott Sumner  

Is Paul Krugman now too conservative for our textbooks?

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In order to do this post properly, I'd need a huge collection of every edition of various economics textbooks. Because I don't have that sort of collection, I'll rely on second hand sources and hope for the best. Please correct any errors you find.

In the third edition of Mankiw's excellent textbook, he quotes Paul Krugman defending child labor (as a lesser of evils) in the context of international trade agreements:

Could anything be worse than having children work in sweatshops? Alas, yes. In 1993, child workers in Bangladesh were found to be producing clothing for Wal-Mart, and Senator Tom Harkin proposed legislation banning imports from countries employing underage workers. The direct result was that Bangladeshi textile factories stopped employing children. But did the children go back to school? Did they return to happy homes? Not according to Oxfam, which found that the displaced child workers ended up in even worse jobs, or on the streets -- and that a significant number were forced into prostitution.

That all seems pretty unobjectionable to me. Who favors child prostitution? (Apparently, lots of people favor policies that lead to child prostitution.)

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I'm told that this Krugman comment was removed from later editions. In the 4th edition it was replaced with an article by Virginia Postrel, which emphasized that most parents don't want their kids to work, and that economic growth was the most reliable way of eliminating child labor. Once again this is very sensible, and perhaps less controversial. I'm told that still newer editions also dropped even that discussion.

I'm also told that another popular textbook by Hubbard and O'Brien had a defense of child labor, which was removed in later editions.

Now I'm working on my own textbook. I had included some comments similar to the Krugman quote above, and got so much pushback from various sources that it had to be deleted before the book was even published. I don't want to make too much of this in terms of the textbook, which I still think will be excellent. We can work around these minor issues. I'm more worried about what it says about the profession. (Textbooks reflect the preferences of the professors that require them, not the students that buy them.)

I'm really happy that I lived through the 1980s and 1990s, which was a sort of golden age of economics. As I get older (and grouchier and more reactionary), I am increasingly dismayed to see economics enter a new dark age, sort of like 1930-66. I doubt I'll live long enough to see the end of this one, but younger free market economists should not lose hope. Truth always wins out in the long run. (A cynic would say, "Yeah, that's mostly because, as Richard Rorty pointed out, truth is sort of defined as what wins out in the long run.")

Eventually the field will come back to its senses.

PS. The new textbook will utilize "never reason from a price change" as a teaching tool for prices, interest rates and exchange rates.

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CATEGORIES: Labor Market , Regulation

COMMENTS (33 to date)
Tim Worstall writes:

As I've found out at first hand (with a slightly different exact example) there's much of this sort of standard economic thinking which is too conservative even for a magazine like Forbes.

Will Comp writes:

Krugman's comment might have been removed because he changed his mind:

Ronald M Bass writes:

has anyone seen any sign that the economics profession, or society in general, is coming to its senses? there are lots of good ideas around about what to do, but not so many good ideas on how to get them done. think tanks need to work more on implementation strategies to get their good ideas into practice.

Hazel Meade writes:

It seems like this reflects the preferences of the publishing industry rather than the economics profession. What's strange is why publishers would be so resistant to publishing an argument in favor of child labor. Controversy can be bad for business (sometimes) but surely in educational materials it's more important to get accurate information (and real arguments) into textbooks than it is to avoid offending hypersensitive parents and students. What they are doing is sort of an oblique method of book burning.

Lorenzo from Oz writes:

Do folk remember that the second great achievement of the women's movement in the US was Prohibition?

Having achieved women's suffrage, the next target was the demon drink. As we know, that didn't turn out so well.

Well, we have just had major advances in female participation in just about everything, and now we are hip deep in a new wave of condemnation of the demon domination, an endless search for sin (sinful words, sinful jokes, sinful shirts, sinful games, sinful statues ...) and demands that only righteous emotions be allowed in the public space. Such as, no discussion of trade-offs in child labour.

There may be a pattern here. But I forget, criticise men and it's feminism, criticise women and it's misogyny. See, sin is everywhere.

Jon Murphy writes:

Anecdotally, I've heard similar complaints from friends who blog for various conservative organizations. One was chided for writing a post on the wage gap, explaining that much of it is explained by economic factors and not discrimination.

Lorenzo from Oz writes:

The US publishing industry is 78% female.

John Ruf writes:

Hello Mr. Sumner

When is your textbook going to come out do you think? I vaguely recall reading that it will be released this/next summer?

Also, what will it cover? Is it a principles of economics book?

Lorenzo from Oz writes:

The patterns of cognitive traits among men and women are diverging in prosperous countries just as presumptive sex roles are disappearing.

Women are statistically more risk averse than men, more agreeable (so conformist), more likely to see disagreement as a threat (i.e. higher in neuroticism--dreadful term, but it's the scholarly usage), more people-(so emotion)-focused. These changes in cognitive patterns in relevant populations (e.g. a publishing industry that is 78% female) aren't going to have effects?

Hazel Meade writes:

Some people see demons everywhere. For some people, the demon is feminism.

Alan Goldhammer writes:

Lorenzo from Oz wistfully writes,

The US publishing industry is 78% female.

If only the same was true about academic economists.

Ray writes:

Krugman is now a political pundit.

Jason Childs writes:


You might be pleased to know that the Canadian edition of Hubbard and O'Brien still uses the child labour (Baden soccer ball manufacturing) example.


Scott Sumner writes:

Tim, Sad!

Will, Actually, that article does not provide a shred of evidence that he changed his mind. Indeed it does not even mention child labor. The views in the article you link to are 100% consistent with what he said earlier.

The question of improving working conditions is completely different from banning child labor. Even back then he probably favored improved working conditions for child labor.

The point of the earlier Krugman piece was that attempts to ban child labor actually make the children worse off. Which is clearly just as true today as when he wrote it. So no, that article does not show that he changed his mind.

Hazel, You said:

"It seems like this reflects the preferences of the publishing industry rather than the economics profession."

I don't agree. They want to sell books. These changes reflect the pushback from economists. That's probably why some textbooks started with the example, and later dropped it.

Lorenzo, On the plus side, I see women as being less susceptible to the alt-right message.

Thanks Jason.

jj writes:

Scott, I'd like to hear more about the pushback against including this in your textbook. Don't you think that reducing child prostitution (on the margin) would have been one of the most valuable contributions your textbook could have made? Instead, another generation of students soft of heart and head will become the policymakers of the future.

jj writes:

I should add: don't take this as a personal indictment as I know nothing of how the publishing industry works.

Mark writes:


Paul Krugman has reversed his views on minimum wage, which seems rather related, so I strongly suspect he has changed them on this matter as well.

This hesitance on the part of publishers may reflect a lack of confidence of economists in their own discipline; where the science challenges political sensibilities, they yield to the latter. I wonder if genetics textbook publishers come into similar conflicts regarding discussions on human genetics? I don’t think earth science textbooks walk on egg shells around climate change, though that may be because on that issue students’ political sensibilities are more concordant with than challenged by the consensus of the field.

To tie things together, I think a poll showed that among Econ students, the most popular economics blog was Krugman’s blog. I don’t that bodes well for the willingness of students (and therefore up and coming economists) to put aside political preconceptions for the sake of sound economic analysis.

*On Lorenzo’s claim, I don’t think there’s any evidence for it, but I must admit I would be amused to see someone make that claim ironically, since it is so common these days for people to attribute whatever they perceive to be wrong with a field to the fact that it is ‘too male.’

Quite Likely writes:

So as more of a Keynesian I have basically the mirror image view of which were the good and bad times for the economics discipline. What do you make of the better economic performance when the ideas you disapprove of were more in fashion? Is the idea that they just got lucky?

Scott Sumner writes:

jj, Let me just say that instructors who might adopt the book don't want that sort of example.

Mark, I see no relationship between the minimum wage debate and the child labor debate. In fact, they are almost opposites. In one case the left doesn't think a government policy will cause unemployment, in the other case they hope a government policy will cause unemployment.

Quite Likely, Good question. I focus more on cross sectional evidence, which is more statistically significant. Free market economies such as Taiwan, Hong Kong, South Korea and West Germany almost always did far better than communist economies with similar cultures.

Ditto for Chile vs. Argentina, or dozens of other comparisons I could make.

I would add that the US did far better under Clinton than Obama. And the US did far better during the 1920s than the 1930s. Even Hoover was far more interventionist that Harding/Coolidge

The period after WWII was relatively good almost everywhere. The Soviet Union grew far faster during the 1960s than the 1980s, but no one would say that's because they were more Keynesian during the 1960s. The world economy slowed after the possibilities of the industrial revolution were mostly exhausted (around 1973).

Here's an easy way to see the problem. Look at a picture of Lindbergh's airplane from 1927, and then a Boeing 747 from 1970. Then go to an airport and look at a modern 747 from 2018. That's why growth slowed.

So yes, it was partly luck.

Alex writes:

Maybe its not political correctness but rather that some realities of the world that are too ugly are better left outside for cosmetic reasons in order to sell more books. Just like when you go to see a movie and all the people that appear are so pretty, even though the real world is not like that.

Radford Neal writes:

"The new textbook will utilize "never reason from a price change" as a teaching tool"

I hope you'll change your mind about this. You don't seem to realize that this phrase means nothing to someone who doesn't already know what you mean by it. In other words, it completely fails to communicate anything.

I think what you really mean to say is "prices can change for more than one reason", from which most people will realize that from a price change alone one cannot infer the reason for the change. Of course, from a price change plus some other information, one may well be able to infer the reason.

Since people believe it is often possible to figure out reasons that things happen, and are aware that a change in something is often a good clue about what's happening, they will take "never reason from a price change" as being obvious nonsense, if they interpret it as "ignore the fact that a price changed when trying to reason about what's happening". And why wouldn't they interpret it that way? It's the most obvious interpretation of the phrase.

I realize that you've become very attached to the phrase, but really, it doesn't work.

Weir writes:

The reality of unintended consequences and the existence of trade-offs.

Those are the two (related) lessons that students won't be allowed to learn anymore. That's the consequence when the effects of a high minimum wage go unmentioned, when child sex workers are no longer spoken of.

Call it the Panglossian trend. It's simply too much for our tiny minds to cope with, that we might be able to hold two ideas in one mind at the same time.

Another variation on this is the idea that if a policy is good, then every consequence of that policy will itself be good, with no down-sides.

The policy is right, and therefore all the consequences of that policy will be excellent too. Not a mix of good and bad. Not something that reasonable people can discuss and debate. No debate is permissible, because the policy is simply true.

Prakash writes:

Must reading for these matters (making the perfect the enemy of the good) is this piece.

The golden nugget is reproduced below.

"The Copenhagen Interpretation of quantum mechanics says that you can have a particle spinning clockwise and counterclockwise at the same time – until you look at it, at which point it definitely becomes one or the other. The theory claims that observing reality fundamentally changes it.

The Copenhagen Interpretation of Ethics says that when you observe or interact with a problem in any way, you can be blamed for it. At the very least, you are to blame for not doing more. Even if you don’t make the problem worse, even if you make it slightly better, the ethical burden of the problem falls on you as soon as you observe it. In particular, if you interact with a problem and benefit from it, you are a complete monster. I don’t subscribe to this school of thought, but it seems pretty popular."

James writes:

"The new textbook will utilize "never reason from a price change" as a teaching tool"

You might also consider "Never use a model to guide policy decisions without first looking at that model's track record in forecasting the effects of policy decisions."

It's actually remarkable how in economics students, especially in macro, are made to learn one model after another just for the sale of learning models with very little discussion as to how reliable each model is in forecasting the effects of government policies. Maybe your book can be an antidote to this.

The Original CC writes:
PS. The new textbook will utilize "never reason from a price change" as a teaching tool for prices, interest rates and exchange rates.
I think this alone will make it better than most econ books out there. This is one of the most important lessons from micro, and yet so few students grasp it.

(I think it's a great way to phrase it, too.)

Miguel Madeira writes:

In the talk about child labor, there is a thing that seems to be usually ignored: the adults who are not employed because of child labor. If you ban child labor, in principle you create more adult labor (or better wages, if the supply of adult labor is limited).

Todd Ramsey writes:

It's not all dark age. For example, a theory previously considered "crackpot", NGDP targeting, is now increasingly embraced by Very Serious mainstream economists.

robc writes:

Look at a computer from 1927(okay, 1936) vs 1970. Look at one from 1970 to today.

I don't think your explanation is universal.

Alex Tabarrok writes:

Modern Principles of Economics, my textbook with Tyler Cowen, continues to discuss how Harkin's proposed legislation threw thousands of children out of garment work and into worse jobs.

Scott Sumner writes:

Radford, You said:

"I think what you really mean to say is "prices can change for more than one reason", from which most people will realize that from a price change alone one cannot infer the reason for the change. Of course, from a price change plus some other information, one may well be able to infer the reason."

No, that's only an explanation for what it means, not the actual meaning. In the book I explain what it means, so students should have no trouble understanding it. As for its usefulness, other bloggers and financial reporters now use the phrase.

You often read people saying "Higher interest rates will lead to . . . ." or "a weaker dollar will lead to . . . " which is utter nonsense, a misuse of S&D theory. That's the point.

Prakash, Interesting example.

Thanks Original CC.

Miguel, That's false, it's called the lump of labor fallacy.

Todd, Good point.

robc. No, not universal, it just applies to 90% of the economy. In the field of information tech there's been awesome progress. But we used to have awesome progress in the other 90%.

Alex, That's good to know.

Miguel Madeira writes:

"Miguel, That's false, it's called the lump of labor fallacy."

Well, one of the two - or we assume that banning child labour does not raise wages (perhaps because thera are many people in worse jobs wanting to work in the factories), and in this case "lump of labor" is not a fallacy (if the wages remains constant, the demand for labor will remain constant, I think); or the banning of child labor raises wages (if the supply of labor is limited), and, in these case, have the effect of raising wages.

john hare writes:

I think "Reasoning from a price change is misleading" might be a better phrase for those that are not going beyond the sound bite. The discussion of the best phrase depends on which audience you are connecting with. It also depends on whether the sound bite affected mass audience has any influence on policy. If not, why worry about reaching them?

TMC writes:

"Mark, I see no relationship between the minimum wage debate and the child labor debate."

His point may be that both of these government interventions hurt the ones it is supposed to help.


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