A Brief Comment on Ron Paul vs Paul Krugman

Here is a link to the discussion. My overall impression is that Ron Paul did very well, much better than his opponent (and here I'm talking just about style, not substance). While he could have talked about the capital structure, intertemporal coordination of production, and malinvestments, he talked instead about the destruction of private American savings and the Fed as an inexhaustible source of funds for political spending (especially welfare and warfare spending). Thus, he addressed genuine concerns of a lay audience while remaining intelligible to it. Krugman, on the other hand, produced nothing except for unsubstantiated statist platitudes.

As for my few bits of friendly criticism, if I were in Ron Paul's place and had his quickness of mind, I would not bring Friedman into the debate at all, but if I happened to mention him, I would not shirk from agreeing that he was indeed a "leftist" (or, to use a much more meaningful word, a statist) on monetary issues. I would use this as an opportunity to introduce von Mises as an example of a full-blooded monetary free-marketeer, and demonstrate that the pop-intellectual discourse is chock full of elementary semantic confusions.

I would also immediately counter any mention of "fiscal stimulus" with a few concise but pithy remarks concerning the fact that siphoning funds from the free market, i.e., that sector of social relations which is the sum total of mutually beneficial interpersonal transactions, guided by price signals and disciplined by the threat of incurring losses, and transferring them to the state apparatus and its clientele, i.e., that sector of social relations which is insulated from the profit and loss system and beneficial only to the transferees, can only lead to plunging the economy further into the quagmire of parasitic attitudes, calculational chaos, and prolonged investment uncertainty. Of course, if I were Ron Paul, I could actually make that concise and pithy.

Finally, I'm confident that Krugman will try to use this very short exchange of words with Dr. Paul as a pretext for not debating any other Austrian economist in the future (including especially Bob Murphy). For all his erudition and competence, I doubt that Ron Paul cares to know all the ins and outs of contemporary academic economic jargon, which makes Murphy, an academically trained "dismal scientist", an even more dangerous debate opponent for Krugman, capable of effectively preventing the latter from being able to hide behind the veil of sophistical econobabble. This, of course, is not to say that Ron Paul's performance in this debate was any less formidable. All in all, I believe that this brief exchange provided yet another illustration that the Austrians have the Keynesians on the run, and the fact that they seem to be getting more and more opportunities to demonstrate this is a hopeful sign.