Email this review


On the evidence of the lively collection of essays at hand, there's nothing dismal about the social science practiced by Stanford University professor Krugman (Peddling Prosperity, 1994, etc.). 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.

Pub Date: March 22nd, 1996
ISBN: 0262611333
Page count: 218pp
Publisher: MIT