In his State of the Union address last month, President Obama set the stage for a coming policy debate and his re-election bid with a catch phrase. Six times, he called on Americans to “win the future.” ….
No doubt, the phrase appealed to White House political advisers and speechwriters. It is always better for presidents to focus on our future potential than the immutable past. And who doesn’t want to win? ….
Yet this catch phrase is also problematic. For one thing, “Winning the Future” was the title of a 2005 book by Newt Gingrich. …. And then there is that pesky abbreviated form of the phrase — WTF — that does not exactly inspire confidence.
More troublesome to me as an economist, though, is that calling on Americans to “win the future” misleads us about the nature of the policy choices ahead. Achieving economic prosperity is not like winning a game, and guiding an economy is not like managing a sports team.
N. Gregory Mankiw, “Economic View: Emerging Markets as Partners, Not Rivals“, New York Times, 13 February 2011.
Harvard economist Greg Mankiw goes on to explain the principle of comparative advantage and why trade is not a competitive game, with winners and losers. Everyone gains from free trade. This is an excellent column, but Princeton economist Paul Krugman long ago conveyed the same message with even better prose. Here is an abstract of Krugman’s paper.
The view that nations compete against each other like big corporations has become pervasive among Western elites, many of whom are in the Clinton administration. As a practical matter, however, the doctrine of “competitiveness” is flatly wrong. The world’s leading nations are not, to any important degree, in economic competition with each other. Nor can their major economic woes be attributed to “losing” on world markets. This is particularly true in the case of the United States. Yet Clinton’s theorists of competitiveness, from Laura D. Andrea Tyson to Robert Reich to Ira Magaziner, make seemingly sophisticated arguments, most of which are supported by careless arithmetic and sloppy research. Competitiveness is a seductive idea, promising easy answers to complex problems. But the result of this obsession is misallocated resources, trade frictions and bad domestic economic policies.
Paul Krugman, “Competitiveness: A Dangerous Obsession“, Foreign Affairs, March/April 1994.
Click on the link for the full paper. According to Google Scholar, this article has been cited 1271 times. Read (or re-read) it and be impressed. Paul Krugman is a gifted writer who breathes life into standard economics.
In praising Krugman, I do not wish to slight Mankiw. To compare of a 900-word column with a 17-page article is unfair. Ample space is needed to explain economic concepts in plain English, without jargon. That is why I enjoyed so much the articles Krugman used to write for the online magazine Slate. The short columns he now writes for the New York Times sometimes disappoint me. In Slate, Krugman was able to focus on economics. In the New York Times he often focuses on politics.