Paul Krugman is right (to a degree), and some readers never thought I’d say that!

Paul Krugman, the Nobel Laureate economist who writes op-ed’s for the NYT’s, delights in ideological conflict with conservatives.  And there are whole hosts of blog sites that routinely spar back with him, such as this Austrian post.  So I generally disagree with him.  Yet his post earlier this week has a lot of merit to it.  Krugman takes Mr. Trump to task for highlighting the importance of manufacturing jobs, and asks the great question as to why aren’t other jobs lauded?  Why don’t we care about retail, for example?

I’ve asked a similar question, since Amazon continues its creative destruction of Sears, JC Penney and Macy’s.  What’s interesting to me about Mr. Krugman is he only asks this question once the Republican party (in the form of Mr. Trump) is stealing the union/manufacturing job issue that the Democrats have owned for years.  But he certainly is right that all jobs are important.  I hope he’ll join me in castigating politicians who attack entry-level service jobs as somehow unworthy of dignity, since they’re “hamburger-flipping jobs.”  God values all work that serves others*, and all work is beneficial.  We were created in God’s image, and God is a worker (John 5:17).  Likewise, the work of the stewardship of creation was before the fall.  So yes, work is good, and jobs are good.  But if a job is not serving customers well, then those laborers should seek to gain employment in  industries that do serve others well.

* Obviously there are some jobs that are not beneficial to others, e.g., working at marijuana store in Colorado.  I doubt God is too happy with that line of work.


Hat Tip to Al Mohler,

24 thoughts on “Paul Krugman is right (to a degree), and some readers never thought I’d say that!”

  1. Interesting post, I never really thought of the ramifications of online stores like Amazon. It is interesting that the loss of retails jobs is never brought to light.

  2. “I hope he’ll join me in castigating politicians who attack entry-level service jobs as somehow unworthy of dignity, since they’re “hamburger-flipping jobs.” God values all work that serves others*, and all work is beneficial. ”

    If all jobs, including entry-level service jobs, are worthy of dignity, then it necessarily follows that those who work in such positions should earn wages reflective of that very dignity.

    If God values all work that serves others, and yet we don’t because we do not support living wages, then it would seem that we are going against God’s wishes.

    1. “If all jobs, including entry-level service jobs, are worthy of dignity, then it necessarily follows that those who work in such positions should earn wages reflective of that very dignity.”
      In no case does it necessarily follow. Saying all work has inherent dignity is not connected to how much each line of work contributes toward the social product. Ultimately, the combined social product is all that can be consumed, irrespective of the dignity that goes into making said product. Ever since John Bates Clark’s great works of the late 1800s, economists have known that the competitive market system has a tendency toward factor (including labor) remuneration (pay) equal to its marginal product. Or as we might say, “the worker is worth his/her wage.” Entry-level positions are therefore paid according to what they produce. While the dignity of all work is high, the output of all work is not. Eventually, however, low-skill workers gain new skills and earn additional remuneration–at least if they are not priced out of the market by proponents of so-called “living” wages.

      1. “Entry-level positions are therefore paid according to what they produce.”

        Nonsense. There used to be something of a connection between worker productivity and worker wages. Like 8-track tapes and maroon bell bottoms, that connection is long gone. Increased productivity flows upward. As labor unions have declined in number and influence, due to right-to-work laws, workers have not been able to stem the tide.

        What about this statement: “If God values all work that serves others, and yet we don’t because we do not support living wages, then it would seem that we are going against God’s wishes.” If God values the work, shouldn’t we as well?

        What are you going to be put first: economic theory or the Bible? Is this another example of how modern conservatism goes against biblical principles? Can you serve God and mammon? Don’t think so.

        Here is a link to a more poignant example of how so-called Christians have put ideology over faith, thereby further diluting an already tepid Christian faith.


      2. Mr. Adams
        You are simply wrong on the connection to worker compensation and productivity. See this excellent video for why:

        However, let’s just do a simple thought experiment and assume you are right. That means that labor is now much more attractive relative to the cost of capital, that you can start your own business and hire all this highly productive cheap labor–skipping all the relatively higher priced capital that you won’t need–and out-compete all the existing producers. You can do so by paying them just a slight premium to their existing wage, and they’ll still be a bargain. The usual criticism of business is that they’ll drop American jobs in a heartbeat and go to China to save a nickle–and yet somehow, when workers are relatively underpaid, there is no entrepreneur in America that can step up to this unusually profitable arbitrage opportunity. So, Mr. Adams, please step up to the plate! Until you choose to put your own money where your mouth is, I refuse to accept your proposition that labor is relatively underpaid. Talk is cheap.

        Second, and more to your criticism that one must choose between economics and biblical thinking, I reject that utterly. I have published and written several articles and a book showing the tight link between economic thinking and sound theology, and I’m small potatoes compared to the numerous other great scholars that have done the same. If you have read any of these works, obviously you don’t find them compelling. So–economic science suggests workers are paid according to their contribution towards the productive output. I know you disagree with this–but give me that assumption for a moment. If I (and the discipline of economics) is correct, why would endorsing that not be considered Biblical? What Biblical principle am I violating by thinking people should be remunerated according to their productivity? You have asserted there is a break between economic theory and Biblical thinking WRT worker pay–lay out your best Biblical case to prove that assertion.

    1. Ad hominem. I used the Chairman of the economics program at GMU, a source I know personally and consider highly credible. You used a government report, that may or may not deal with all of the issues that Mr. Boudreaux identified. If you reviewed Mr. Boudreaux’s presentation, you’ll find that this statistic is highly questionable for a variety of reasons. If I can find the actual BLS report (not the summary), I’ll take a look (link currently says I don’t have access).

    2. Jeff
      I was able to review the report you referenced and stand by my point. But I want to thank you. This issue–and a more complete evaluation of your point–deserves a separate blog post for me to state why this report you’ve given is inadequate to support your claim. So thanks for giving me a fun issue to write about. Stand by for something NLT early next week.
      EDIT: Here is the response:

  3. What kind of “dean” has time to post so extensively during the workday?

    Perhaps they ought to give you more work to do, no?

    “I have published and written several articles and a book showing the tight link between economic thinking and sound theology.”

    Taking Scripture out of its proper contexts to defend contemporary conservative economic ideas is not sound scholarship. Your scholarship seems to be done in a bubble. In a real university, you would not even get hired in the first place. No, writing articles for the Cedarville magazine/mailer is NOT scholarship! Sorry. :-)


    You are attempting to defend an untenable position, which explains your flailing around.

    YOU said that “God values all work that serves others.” I believe that is biblical, and I assume you do as well, which is why you said it in the first place, I presume.

    All I am doing is taking that premise to its natural conclusions. If GOD values all labor, so should we. If GOD believes that there is dignity in work, then so should we.


    It makes ZERO sense to argue as you do. You are giving lip service to biblical principles and then advocating that which does not value labor nor provide dignity to those who labor.

    It is at the very least inconsistent and untenable. At the worst, it is hypocritical, if not immoral.

    Your argument unfortunately helps illustrate what I call Sunday theology. True practical theology should be practiced seven days a week, not just on Sundays. By not advocating that those doing dignified work should not necessarily receive a dignified wage, you are merely confirming what I sadly already think.

    1. Jeff,

      You are being slanderous and obviously incorrect.

      Purple bell bottoms are still in. How dare you insult a classic piece of faction. I demand an immediate apology!

    2. As to this comment, I may add that a short investigation into Professor Haymond’s CV shows that he taught at the Air Force Academy (I would presume you would consider this a “real university”) and has published in the likes of Journal of Public Finance and Public Choice, Public Choice, and Strategic Studies Quarterly (which I think we can agree are a caliber above “Cedarville mailers” as peer-reviewed journal articles).

      You may disagree with Professor Haymond, but it is fairly hard to insinuate he doesn’t have the education or the training to speak knowledgeably about these issues, which is what I assume you were trying to say. Correct me if that was not your intent.

      It is of course another matter entirely if your believe that that his error lies solely in scriptural interpretation and not in economic interpretation, but in that case his pedigree as an economist has little to do with it and might as well be left from the discussion.

  4. Dr. Haymond,

    Interesting points.

    For what is its worth, seeing as I am a much smaller potato than you are, you are, of course, quite correct that remuneration based on productivity or ability in no way conflicts with Biblical principle. In fact the Parable of the Talents (Matthew 25:14-20), taught by Jesus himself deals with servants who are given responsibility according to the “abilities of each man”, 5, 2, and 1 talents respectively. The first two make good use of what was given. The one with 5 doubled it to 10, the one with 2 doubled it to 4. The work of the first servant was obviously more profitable, because of his ability, and thus he was entrusted with more. It is also interesting to notice that when the Master takes the 1 talent from the unproductive servant, he gives it to the first servant who was the most productive, not to the second one, even though the response to both of the first two servants is the same: “Well done, good and faithful servant. You have been faithful over a little; I will set you over much. Enter into the joy of your master”.

  5. I thought you brought up many interesting points in this article. I think it is interesting that Krugman brings these issues up while a republican (Trump) is in office even though this has been going on for years. I also found it interesting to think about how Amazon is taking away from many stores and I also like how you talked about work glorifying God. I did appreciate the comment that not all work however glorifies God.

  6. I really like that you stated how all jobs are beneficial. There is such a stigma associated with low-entry jobs and people do not realize how important those jobs are. I also think it is important to realize that people can glorify God in those fields of work if they are serving others well.

  7. Good article that points out some interesting ideas concerning the flaws in trying to protect one industry while ignoring others. Rather than focusing on protectionism in general, perhaps Trump would be better off focusing on competition in general. Countries working with a comparative advantage would allow for the most efficient outcome regardless of the industry.

  8. That’s interesting that Krugman just decided to bring this up. It’s frustrating how things have been going on for years, and people just bring something up to create even more conflicts.

  9. Very much appreciated this post: a Biblical perspective on a liberal conscience. So often it is easy to fall into the trap that its liberal vs. conservative, but both have merits and flaws to a degree. I thought it interesting when Mr. Krugman talked about the need for “villains” to blame for the loss of manufacturing jobs. For retail jobs, I might argue that the “villians” are in fact companies like Amazon, Zappos etc., but telling Americans that? They’d never go for it. These companies have helped our lives become better. When we lose manufacturing, retail and newspaper jobs, that doesn’t mean society is worse off. It usually means we are getting better because we are becoming more productive.

  10. Prager University had an interesting snippet a while ago talking about something similar to this point. There’s certainly no shame in working an entry-level job, and, perhaps most importantly, there are basic skills to be learned from a very basic occupation (diligence, work ethic, promptness, etc.). Also, your point on Amazon’s “creative destruction” is noteworthy. Walmart and Amazon have been gearing up for what looks like a classic ring match, pitting conventional shopping versus the digital age. All I can say is that consumers should be very excited about what’s in store (no pun intended) for them over the next few years. This level of competition between two market superpowers has great potential for innovation and better customer service.

  11. Very interesting post. I know we talked about Amazon in microeconomics, and the implications of their fast growing company. Innovation is a beautiful thing however it does destroy jobs in the process, but that is just how business works. Also, Krugman is correct that all jobs are important. We discuss this a lot in chapel, how ministry is important no matter what vocation God leads you to.

  12. I appreciated your point about how we can’t look at one sector of the economy with too much favor and ignore the others. That’s not how an economy works. It’s very similar to the one-sided view that Trump has on other issues like trade. I get frustrated by anyone who says that entry-level jobs aren’t as important as others. Capitalism can’t give everyone the same job otherwise it wouldn’t be capitalism.

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