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"Pop internationalists" — people who speak impressively about international trade while ignoring basic economics and misusing economic figures are the target of this collection of Paul Krugman's most recent essays. In the clear, readable, entertaining style that brought acclaim for his best-selling Age of Diminished Expectations, Krugman explains what real economic analysis is. He discusses economic terms and measurements, like "value-added" and GDP, in simple language so that readers can understand how pop internationalists distort, and sometimes contradict, the most basic truths about world trade.All but two of the essays have previously appeared in such publications as Foreign Affairs, Scientific American, and the Harvard Business Review. The first five essays take on exaggerations of foreign competition's effects on the U.S. economy and represent Krugman's central criticisms of public debate over world trade. The next three essays expose further distortions of economic theory and include the complete, unaltered, controversial review of Laura Tyson's Who's Bashing Whom. The third group of essays highlights misconceptions about competition from less industrialized countries. The concluding essays focus on interesting and legitimate economic questions, such as the effects of technological change on society.
In a baker's dozen pieces (previously published in Foreign Affairs, Harvard Business Review, and other blue-chip journals), the author gleefully corrects what he construes as major errors corrupting public discourse on the economics of international trade. Using statistical data readily available from US government agencies, Krugman dismisses as "a dangerous obsession" the widely accepted notion that countries (like corporations) are in win-lose competition with one another. He goes on to make a persuasive case for the proposition that domestic productivity is the key determinant of growth in employment and living standards throughout a world that is appreciably less interdependent than commonly believed. Among other unfortunate consequences, the author argues, the simplistic doctrine of global rivalry has the power to cloud the minds of appointive and elected officials, who may use it to misallocate resources, impose trade restrictions, or commit other policy blunders. While he characterizes the export/import game's stakes as relatively small, Krugman is at frequent pains to support, if not advance, the free-trade cause. In aid of this objective, he takes on some influential high-profile peers (Paul Kennedy, Edward Luttwak, Robert Reich, et al.) and documents precisely how their anecdotal evidence and figures fail to add up. Covered in equally iconoclastic fashion are NAFTA (a political rather than a commercial alliance, in the author's convincing opinion), the unsustainable gains logged for Asia's newly industrializing nations, and the reality that technology has a greater impact on job rates than trade.
An informed and informative audit of the all-too-conventional wisdom that, as per Gresham's law, can drive common sense from the marketplace of ideas.
|1||Competitiveness: A Dangerous Obsession||3|
|2||Proving My Point||25|
|3||Trade, Jobs, and Wages||35|
|4||Does Third World Growth Hurt First World Prosperity?||49|
|5||The Illusion of Conflict in International Trade||69|
|6||Myths and Realities of U.S. Competitiveness||87|
|7||Economic Shuttle Diplomacy: A Review of Laura D'Andrea Tyson's Who's Bashing Whom?||105|
|8||What Do Undergrads Need to Know about Trade?||117|
|9||Challenging Conventional Wisdom||129|
|10||The Uncomfortable Truth about NAFTA||155|
|11||The Myth of Asia's Miracle||167|
|13||The Localization of the World Economy||205|