Krugman Says Aliens Could End Recession
The battle between Keynesian economics and free-market, Austrian economics continues in Paul Krugman’s latest description, nee rebuttal, of 19th century political economist Frédéric Bastiat’s Broken Window Fallacy. In a recent blog post, economist and Mises Academy instructor Dr. Robert Murphy takes aim at Krugman’s latest attempt to validate government interference in the economy by stating that a hypothetical invasion by aliens could end the current recession in a mere 18 months.
Basically, what Krugman is saying is that if we suddenly became aware that an alien attack were imminent, then the government would create economic stimulus by financing the building of weaponry and other tools to fight off the invasion. All of this “stimulus” would create jobs, which is a good thing, even though the job creation would be the result of
Keynesian economists continue to promote the broken window fallacy and vow that government intervention will solve, not create, economic chaos. Free market economists, on the other hand, believe that people and economies are only truly free if they operate without artificial intervention.