Krugman Gets Informed, Changes His Tune On TPP

from the it's-not-about-free-trade dept

Tue, Mar 4th 2014 5:08am — Mike Masnick

Late last year, we were dismayed by a Paul Krugman opinion piece in the NY Times in which he judged the TPP based on how it might impact free trade, saying he didn't understand why people were so upset about it. After lots of people called him out on that, including other economists who highlighted that the problems of TPP have little to do with "free trade" but with exporting questionable regulations and giving up corporate sovereignty, Krugman admitted to knowing little of the details and promising to spend more time reviewing them.

He's now done so and put forth a revised opinion on the TPP, in which he more or less admits that it's not a very good agreement. He doesn't think it's horrible, just like he didn't think it was wonderful before. He basically shifted from lukewarm support to lukewarm disapproval of it. However, at least he now recognizes that it's not about trade, but about helping out a few big companies:

What the T.P.P. would do, however, is increase the ability of certain corporations to assert control over intellectual property. Again, think drug patents and movie rights.

Is this a good thing from a global point of view? Doubtful. The kind of property rights we’re talking about here can alternatively be described as legal monopolies. True, temporary monopolies are, in fact, how we reward new ideas; but arguing that we need even more monopolization is very dubious — and has nothing at all to do with classical arguments for free trade.

Now, the corporations benefiting from enhanced control over intellectual property would often be American. But this doesn’t mean that the T.P.P. is in our national interest. What’s good for Big Pharma is by no means always good for America.

He then wonders why the Obama administration is so gung ho on the deal, and thinks they've been sold a bill of goods, believing the bill must be good because it has been labeled as a free trade agreement, with no one bothering to really think through the details.

So what I wonder is why the president is pushing the T.P.P. at all. The economic case is weak, at best, and his own party doesn’t like it. Why waste time and political capital on this project?

My guess is that we’re looking at a combination of Beltway conventional wisdom — Very Serious People always support entitlement cuts and trade deals — and officials caught in a 1990s time warp, still living in the days when New Democrats tried to prove that they weren’t old-style liberals by going all in for globalization. Whatever the motivations, however, the push for T.P.P. seems almost weirdly out of touch with both economic and political reality.

While I think Krugman underplays the potential downsides of a TPP agreement, at the very least his assessment this time actually involved taking the time to look at what's actually happening. His initial assessment was much more like what he now accuses TPP supporters of doing: just taking conventional Beltway wisdom, combined with a 1990s time warp.

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community.

Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis.

While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: economics, free trade, paul krugman, tpp, trade agreement

26 Comments

If you liked this post, you may also be interested in...

Reader Comments

Subscribe: RSS

View by: Time | Thread

kenichi tanaka (profile), 4 Mar 2014 @ 5:24am

Paul Krugman is an idiot. Huffington Post writes about him as much as they write about President Obama, lapping up both of these fools as the Messiahs who will save this country from itself.

I hope Techdirt isn't following on the same path.
[ link to this | view in thread ]
Anonymous Coward, 4 Mar 2014 @ 5:27am

Krugman: "Is this a good thing "

Yeah, that's all the peons need to be told.
[ link to this | view in thread ]
Pragmatic, 4 Mar 2014 @ 5:37am

Re:
Uh, two articles just called him out for spouting crap, so no, it's not.

Krugman isn't always wrong but in this case he is, I'm not sure why. Please don't tell me he believes in this "free market" nonsense. If he does, it explains everything.
[ link to this | view in thread ]
PaulT (profile), 4 Mar 2014 @ 5:51am

Re: Re:
"Uh, two articles just called him out for spouting crap, so no, it's not."

Not to mention that what the Huffington Post has to say has no bearing on this article, since it's not mentioned or linked to anywhere. If all he has to criticise is hyperbole relating to a completely different site, then I suspect he has no point at all.
[ link to this | view in thread ]
Anonymous Coward, 4 Mar 2014 @ 5:56am

Re:
Not really, but on this, he's shown that he is, in fact, a human, and not an EconomoBot. Which is always useful from an expert on a subject - admitting that you were, in fact, wrong on something.
[ link to this | view in thread ]
Anonymous Coward, 4 Mar 2014 @ 6:02am

Foreign inventors and authors are able to engage in business activities within the US and eligible to secure the benefits of US law. US businesses attempting to engage in business in foreign countries in many instances are ineligible to secure the same benefits as the nationals of other countries. There is no requirement that other countries, as sovereigns, are entitled to craft their own sets of national laws...but then they should expect to pay the price by having a business climate that discourages foreign investment, perhaps the most critical need for emerging climbing out of third world status.
[ link to this | view in thread ]
Anonymous Coward, 4 Mar 2014 @ 6:06am

At least he seems to have seen the error of his ways.
[ link to this | view in thread ]
David, 4 Mar 2014 @ 6:28am

Re:
I think you misunderstand what this is about. The TPP is not about enabling US businesses in Kenya (say) to screw over Kenyans like other Kenyans can in Kenya. It is about letting US businesses in Kenya screw over Kenyans like they can screw over Americans in America.
[ link to this | view in thread ]
Rob McMillin (profile), 4 Mar 2014 @ 6:31am

Re: Re:
Krugman long ago gave up any pretense to empiricism. He spends his days shilling for Keynesianist meddling, and the Democratic Party, and wears his Nobel as an all-purpose shield against criticism. He is worse than useless, he is actively destructive.
[ link to this | view in thread ]
Anonymous Coward, 4 Mar 2014 @ 6:40am

i would suggest that the main reason those in the White House are pushing so hard is to do with a rather large portion of paper encouragement thrown at them! you need to remember who actually sponsored Obama in his push to the position he now has. you also need to remember the threat Dodd issued when SOPA was on the table about withdrawing support in certain areas for certain people. this has already been raised because of the DoJ, who are supposed to be independent in things unless law breaking is happening, have now, suddenly, decided, after all the other wins in court, that Aereo is not legal! and i'll bet that has only happened because of the corporation heads being bestest buddies with law enforcement etc. think about how DoJ went after Kim Dotcom and how the raid was a complete disaster, and done at the behest of Hollywood (Dodd having left 'official politics' to take control of the MPAA, where he's been scratching backs with his ex-mates in Congress to carry out certainly potential illegal activities!!)
[ link to this | view in thread ]
ReallyEvilCanine (profile), 4 Mar 2014 @ 6:42am

The White House been SOLD a bill of goods?
At first I thought it was just because I look like Dave Grohl that everyone was coming up to me, but the questions were all about where to find 8TPI 3" lag bolts, gluten-free Portland cement, interior latex matte polka-dot paint, and not a single autograph request. Then I realised I'd worn an orange T-shirt when I went to Home Depot.

It's just like that, only in reverse.
[ link to this | view in thread ]
Richard (profile), 4 Mar 2014 @ 6:42am

Re:
Foreign inventors and authors are able to engage in business activities within the US and eligible to secure the benefits of US law. US businesses attempting to engage in business in foreign countries in many instances are ineligible to secure the same benefits as the nationals of other countries.

Whereas in the 19th century

US inventors and authors were able to engage in business activities within Britain and eligible to secure the benefits of British law. British businesses attempting to engage in business in the United States in many instances were ineligible to secure the same benefits as US nationals.

The US is indulging in "do as I say - not as I did".
[ link to this | view in thread ]
MRK, 4 Mar 2014 @ 6:50am

"So what I wonder is why the president is pushing the T.P.P. at all. The economic case is weak, at best, and his own party doesn�t like it."

Krugman is openly a strong supporter of the democrats, and so it should be no surprise that he can't wrap his head around the idea that Obama isn't honest, and actually makes some dirty deals just like everyone else in washington.
[ link to this | view in thread ]
franktalk, 4 Mar 2014 @ 6:57am

Krugman Changes Mind! Imagine That!
Krugman will never take a position that contradicts orchallenges the current administration. He is a Democrat Hack.

Krugman historically changes positions depending on partisan party politics. For Krugman, deficits were a bad problem under Bush, but historic $4 trillion deficits under Obama were just what we needed. A recent study showed his position on debt changes over the years in lock step with whoever is in the White House: http://econjwatch.org/articles/when-the-white-house-changes-party-do-economists-change-their-tune-on -budget-deficits
[ link to this | view in thread ]
Anonymous Coward, 4 Mar 2014 @ 7:31am

Krugman is such a hack for a Nobel prize winner. More than half of the stuff he talks about, he has no clue about them.

But he talks about them anyway, because he's "famous" so he needs to have an opinion on them either way.
[ link to this | view in thread ]
Anonymous Coward, 4 Mar 2014 @ 8:07am

Re: Re: Re:
Yes, because ignoring that macroeconomic outlook worked so well for the global economy.

Oh, wait...
[ link to this | view in thread ]
zip, 4 Mar 2014 @ 8:55am

"just taking conventional Beltway wisdom"
To all the people calling Paul Krugman "an idiot" - I'd like to point out that success in life is much more about siding with the people in power than about being right. Krugman is often wrong, but in virtually every case he just follows the herd. He would not have had such a successful career had he taken contrary positions.

For instance, Krugman was a staunch supporter of the Iraq invasion, believing (at least publicly) all the phony hype of Iraq's "weapons of mass destruction" and the "we will be greeted as liberators" promises (despite substantial evidence to the contrary). People who disagreed with the Iraq invasion had their careers destroyed (despite being proven right) while those who chose to run with the herd (despite being proven disastrously wrong) were rewarded -and remain rewarded- for their idiocy.

Krugman at least does backtrack somewhat when the tide of public opinion rises against him. This is why, having been called to task on his sheer ignorance of TPP, he has reversed positions, if only slightly. The sad reality, of course, is that there is a lot more money to be made (and careers to be enhanced) by supporting copyright maximalist positions than opposing them, and savvy "opinion leaders" like Krugman will always be seduced by the lure of playing dumb by supporting the the corporate interests to the greatest extent possible.
[ link to this | view in thread ]
John Fenderson (profile), 4 Mar 2014 @ 9:08am

Re: "just taking conventional Beltway wisdom"
"I'd like to point out that success in life is much more about siding with the people in power than about being right."

I suppose that entirely depends on how you define "success".
[ link to this | view in thread ]
zip, 4 Mar 2014 @ 9:32am

Re: Re: "just taking conventional Beltway wisdom"
'Success' might be defined as the difference between James Clapper (who broke the law) and Edward Snowden (who exposed the lawbreakers). Snowden being an exceptional case, of course, as the vast majority of whistle-blowers find themselves out of work and on a decidedly different career path, as complete nobodies outside of the public eye.
[ link to this | view in thread ]
Anonymous Coward, 4 Mar 2014 @ 9:59am

Re: Re:
Exactly. The american exceptionalism approach he is using, doesn't hold up to any level of scrutiny.

It is not a crusade against the heathens. It is, to a high degree, a question of controlling legislation abroad and making standards have exactly the levels where foreign competitors are disadvantaged in terms of needed investment to comply.
That includes, but is not limited to, IPs, environmental standards and worker safety.
[ link to this | view in thread ]
Mike Masnick (profile), 4 Mar 2014 @ 11:29am

Re: Krugman Changes Mind! Imagine That!
Krugman will never take a position that contradicts orchallenges the current administration. He is a Democrat Hack.

You do realize that this entire article is about him challenging the current administration's support for TPP.

So, uh, yeah.

Look, I get that some people have a visceral hatred for Krugman. I disagree with the guy on a lot, but you look pretty stupid for automatically disagreeing with everything he says.
[ link to this | view in thread ]
Anonymous Coward, 4 Mar 2014 @ 11:41am

I give Krugman, credit. At least he educated himself on the issue and revised his stance. That being said, I have no idea who Krugman is, and fail to understand why his opinions should be important to me.

I'm able to form my own opinions, myself. My opinion about TPP is it's harmful for innovation, jobs, and the global economy. It's an attempt to criminalize starting your own business, without paying the large incumbent industries royalty fees to compete against them.

Not to mention the rules and regulations in TPP, will become international corporate law. A corporate law drafted by corporations, not by citizens and their governments.

I wish more people would look into the facts and form their own independent opinions. Instead of just going along with the herd.
[ link to this | view in thread ]
bongo houzi (profile), 4 Mar 2014 @ 1:20pm

Re: Re: Krugman Changes Mind! Imagine That!
I insightfulled you even though you got a tad trolly at the end.
[ link to this | view in thread ]
Kronomex, 4 Mar 2014 @ 3:02pm

Re: Re: Re: Krugman Changes Mind! Imagine That!
Krugman Changes mind after brain rejects previous thought processes. Spin doctors hope this time the new mind will work.
[ link to this | view in thread ]
Anonymous Coward, 4 Mar 2014 @ 5:54pm

Re:
As an aside: Many normal laws regulating industry is at least partially written by corporations. I don't think the actual corporate influence on the process is the important part, it is a question of letting others balance it out that lacks almost completely in these negotiations.
[ link to this | view in thread ]
hrichards (profile), 9 May 2015 @ 6:41pm

Re: "just taking conventional Beltway wisdom"
"Krugman was a staunch supporter of the Iraq invasion,..." Why make stuff like this up when Krugman's 2003 columns are available for anyone to read? Just search on "krugman iraq war 2003" to find columns that totally disprove your accusation.

The contention that Krugman "just follows the herd" is just hilarious-- unless the "herd" doesn't include any of the Very Serious People who define the conventional wisdom in economics both here and in Europe.
[ link to this | view in thread ]