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Tuesday, October 14, 2008

Glib Idealising that is, in fact, empirically and theoretically sound, not that anyone will notice.

My conclusion is that Krugman, like most people and most scientists, uses baseless assumptions to generate a flawed model using slipshod methods, and then projects his own biases onto the model to arrive at an obviously wrong conclusion.

But I'll give him credit for this:

"gut feelings are not a sound basis for policy." - Krugman, The Role of Geography in Development

I suppose I should make at least one counterpoint to what he suggests- and bear in mind that that's not a research paper.

There are no "winners" and "losers" in the geographical distribution of industry unless one subjectively labels industrial concentration as the winner. The individuals in the "backward" agricultural region would have equally high benefits (buying power + clean air etc.) as those in the industrial agglomeration, if there were a relatively easy way to move between the two. AKA a rational market.

There's not. Sheeple tend to stay where they are, which is why they're called sheeple and there are no rational markets.

1) I disagree that they are disadvantaged, though "losers" may be an appropriate term for someone who stays at an economic disadvantage for irrational reasons. That was redundant, but I don't want anyone complaining because they don't understand what I'm saying.

2) The correct solution is to lower mobility barriers for the people involved, not to try to decentralize industry.

2.5) Technological progress is about making the markets more efficient and removing said barriers.

2.6) The logical conclusion is to fire all the economists and socialists and bureaucrats.


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