(Credit: David Smith)
When Friedrich von Hayek became a Nobel Laureate in economics in 1974 he said: "The Nobel Prize confers on an individual an authority which in economics no man ought to possess." The truth of this is demonstrated daily by the case of Paul Krugman.
Krugman and his supporters whip out his Nobel Memorial Prize in Economic Sciences like a Top Trump of Diego Maradona. It is awarded annually — so why the special fuss about a prize Krugman won four years ago? His Nobel is being used to intimidate opponents. Any opposition to Krugman with his Nobel Prize is opposition to science itself.
Why Krugman generates so much opposition isn't hard to fathom. From his perch in the New York Times he says one ridiculous thing after another. In the British context Krugman's risible thesis is that the economy is struggling because the government isn't spending enough money, that austerity is driving us back into recession, and that the solution to our debt crisis is to borrow and spend even more money.
But there is no austerity. British government spending has fallen from record highs by only about 1 per cent since the coalition took office. This has tipped us back into recession? Most private sector companies could save that by switching to cheaper copier paper.
Krugman argues that we need vast government spending to get us out of the recession. But Britain is running a budget deficit of more than 8 per cent of GDP, one of the highest in the developed world. The government is spending more than 400 million borrowed pounds every day; the national debt is increasing by more than £5,000 every second.