The conscience of a liberal

Why do you study economics? For making big money? For learning to be a CEO? For changing our society? The author believes that economics should be used to improve the living standard of people. This book focuses on the health care and income inequality. These issues happen to be the concern of HK people as well. Perhaps we may get insights from it.

In his book, Krugman finds out that it is the institutions and norms that account for the unique income inequality and the under provision of health insurance/care in the United States. Under the “small government big economy” principle, people believe that the welfare state is illegitimate as high tax and the extensive provision of free lunch remove the incentive to work and innovate. People tend to argue that:

“life may be unfair, but it’s not the job of the government to ride the world of injustice. If some people can’t afford health insurance, this argument would assert, that’s unfortunate, but the government has no business forcing other people to help them out through higher taxes. If some people inherit genes that make them vulnerable to illness, or acquire conditions at some point in their lives that make it impossible for them to get medical insurance from then on, well, there are many strokes of bad luck in life. The government can’t fix them all, and there’s no reason to single out these troubles in particular (p.214-215).”

But is it morally right to let it be like that?

At the end of his book, the author declares that:

“I believe in a relatively equal society, supported by institutions that limit extremes of wealth and poverty. I believe in democracy civil liberties, and the rule of law. That makes me liberal, and I’m proud of it (p.267).”

What is your believe?

Krugman, Paul (2009). The conscience of a liberal. NY: W.W. Norton & Company, Inc.