Thomas Dalrymple responds to Paul Krugman Slice of Labour.
Mr Krugman’s argument is not the argument in favor of labor market rigidity as above, however. He is what one might call a slice-of-cake man, where an economy is a cake to be sliced rather than a dynamic organism to be nurtured, and where supply and demand can be managed without reference to price. There may be cruder economic ideas, but I don’t know what they are. He is also, of course, a proponent of ever-greater government stimuli to the economy. In this article, he quotes John Maynard Keynes on the dangerous influence of ideas. I wish he had quoted Keynes’ eloquent words on the effects, social, psychological and economic, on the debauchment of the currency.