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Ferguson raps Nobel laureate on healthcare argument
By Cho Jin-seo
After their latest encounter in Seoul, in a long-running battle of debates, Harvard historian Niall Ferguson claimed a victory over his nemesis Paul Krugman, a Nobel laureate in economics at Princeton University.
In an e-mail response to The Korea Times on Friday, Ferguson said Krugman’s argument “collapsed” during the debate and he seemed to be living in a “parallel universe” away from the real world.
The two renowned scholars have clashed over the U.S. monetary policy recently. As a Keynesian, Krugman wants a more expansionary program to fight the fear of depression, while Ferguson is calling for a more balanced budget.
“His argument collapsed when he said investors should not worry about U.S. fiscal policy because all that is needed is for healthcare costs to be brought under control,” Ferguson said. “As that appears politically impossible, I don’t feel very reassured." During Wednesday's debate, Krugman had said that the U.S. budget can restore soundness by fixing the country’s health care program.
“In short, professor Krugman appears to have retreated into a parallel universe, where the simplicities of his introductory economics course at Princeton are more important than the complexities of the real financial world,” Ferguson said.
The two have been engaged in a war of words since April 2009, when they argued about the U.S. interest rate. The scope of the debate has expanded to a wider range of economics. It is generally viewed that Krugman represents the Keynesian camp, while Ferguson is more of a traditionalist.
Challenges were often made in the form of personal attacks. Krugman, an American, has used New York Times and his blog to attack Ferguson, once calling his archenemy a “poser” for his frequent appearances in the media. Ferguson, a Brit, took advantage of the Financial Times columns to fight back against the “patronizing” Nobel Prize winner. On Wednesday, he used a new term, “vulgar Keynesian,” on Krugman.
Ferguson also complained on the fairness of The Korea Times article published on Thursday. Right after the debate, the Times reporter was only able to get comments from Krugman, in which he labeled Ferguson’s logic as “all weak” and said there had been no point for argument with him.
“The result was that you published Krugman’s ‘sour grapes,’ with no comment from me,” Ferguson said.
He also said Krugman’s view is too confined to the United States.
“For what it’s worth, I think we saw very clearly how indifferent Paul Krugman is to the international consequences of reckless fiscal and monetary policy in the United States,” he said.
“The surge in emerging market equities and commodities shows just how inflationary U.S. policy already is. Running even larger deficits and doing even more quantitative easing will not solve the problem of the long-term unemployed in Michigan, which is a structural problem. It will just inflate new bubbles and cause more currency volatility.”
Krugman’s law and a canine verdict
The Harvard professor had also proposed “Krugman’s law” during the debate, that “the first person to say the other guy lost the debate has lost the debate.”
The talk had been moderated by Shin Hyun-song, a fellow Princeton professor of Krugman but a college friend of Ferguson’s. As expected, Shin told The Korea Times that there was no winner or loser.
But the organizer of the event, Maeil Economic Newspaper, disagrees. It went a step further with an off-color twist.
“’You need to study more.’ A great Nobel Prize winner humiliated like a dog in Korea,” read the top-story headline of the daily’s website on Wednesday, in an attack to Krugman.
The article instantly received dozens of protesting comments from readers, who thought the debate was productive and the headline too sensationalist. The headline and the comments were all removed the next day with no explanation from the paper.
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