Paul Krugman and the Limits of Hubris

October 12, 2014 • Climate Change & Mitigation, Daily Email Recap

Paul Krugman and the Limits of Hubris 

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Economist Paul Krugman evidently feels irked and irritated by the notion that there might be limits to economic expansion: he has followed up his New York Times op-ed of September 18 (“Errors and Emissions” to which I replied here) with a new piece titled “Slow Steaming and the Supposed Limits to Growth” . It’s interesting to examine his latest assertions and arguments one by one, as they reveal a great deal about how economists think, and why they tend to disregard physical science when it comes to questions about finite resources and the possibility of infinite economic growth on a small planet.

Mr. Krugman begins by noting: “We seem to be having a moment in which three groups with very different agendas-anti-environmentalist conservatives, anti-capitalist people on the left, and hard scientists who think they are smarter than economists-have formed an unholy alliance on behalf of the proposition that reducing greenhouse gas emissions is incompatible with growing real GDP.” He omits mentioning a fourth group-ecological economists like Herman Daly, who take the position that, in the real world, the laws of physics and ecological limits trump economic theory. For Krugman, only mainstream economists are to be trusted; everybody else is prone to misconceptions. He seems perplexed why so many people are coming to the same mistaken conclusion from different directions.

Could it be that they are all recognizing an unavoidable physical reality?

Next Mr. Krugman fires a volley at physicist Mark Buchanan’s recent essay, Economists are blind to the limits of growth. Back in the 1970s, Krugman’s mentor, Bill Nordhaus, led mainstream economists in denouncing the classic book Limits to Growth. Unfortunately for Krugman, Nordhaus’s attack looks in retrospect like mere hand-waving: analysis of relevant data from the last 40 years shows that the most pessimistic scenario from the 1972 Limits to Growth study is tracking reality quite closely.

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