Praised as “a prophet of risks,” US economist Paul Krugman gained a great deal of attention during his recent trip to China and Taiwan. Krugman predicted the 1997 to 1998 Asian financial crisis and the current global recession and won the Nobel Memorial Prize in Economics last year. On his trip to Beijing, Shanghai, Guangdong and Taipei, Krugman was treated as a celebrity, with his speeches attracting large crowds that caused a lot of discussion and “Krugman frenzy.”
Krugman, a self-described liberal, has always assumed a harsh and critical attitude toward neo-conservatism. He has been open about his political affiliations in the US and he often lashes out at Republican policies. Krugman has been referred to as a reincarnated Keynesian, an advocate of socialist state projects and agendas and a controversial champion of the extreme left-wing with liberal political and economic views for his state-market ideology.
With viewpoints like these, one can become baffled by the prevailing Krugman worship in Taiwan.
In Taiwanese politics, the economic beliefs and policies of the major political parties have never had anything to do with Keynesianism. Instead, they are based on neo-conservatism, something Krugman denounces.
Furthermore, Taiwan’s traditional economic education places heavy emphasis on neo-conservative principles, which has influenced the nation’s economic values. As a result, students, the public, media outlets and technocrats call for “respect for market mechanisms” and criticize government interference in the market because of this education. This is the reason there is no room for Keynesianism and left-wing politics in Taiwanese society.
However, that may be changing now that former Democratic Progressive Party (DPP) legislator Luo Wen-chia (羅文嘉) has proposed the “second Dangwai,” or “outside the party,” movement to add center-left elements to the ideology of “pro-localization.”
British economist John Keynes developed a theory about respect for market mechanisms, government intervention and the distinction between “market” and “state.” Krugman says that US Democratic politicians should follow the New Deal policies initiated by late US president Franklin D. Roosevelt to carry out social justice by setting fairness as the foundation of freedom.
Krugman’s theory can be explained in terms of the spirit of the New Deal: When the unequal distribution of economic growth leads to high levels of social injustice, the government should correct the situation through tax reform and social security to build a competitive society with equal opportunities.
This government correction flies in the face of the neo-conservative economic values prevalent in Taiwan.
Vice President Vincent Siew (蕭萬長) said that amid the global financial crisis, Taiwan increased demand and raised economic figures by adopting economic stimulus measures, adding that Taiwan was a good example of Keynesianism. However, if we examine the way the government handled the financial crisis in light of Keynesian theories of building a social security through tax reforms, the government just cited one part of the theories to prove the effectiveness of their policies. It does not really believe in Keynesianism at all.
Just 2 percent of Taiwan’s population holds 70 percent of the nation’s wealth and the gap between the rich and poor has increased by 58 percent. The problem of economic inequality has become very serious and needs to be solved. The financial crisis stems from the collapse of the global financial system, which became possible after neo-conservatives lifted financial constraints. Now that our entire nation is crazy about Krugman, the government should take all of his concerns into consideration instead of just part of them.
I truly hope that the “Krugman frenzy” is not just a belief bubble created by the media, banks and the government. I also hope that the frenzy will not be like the egg tart craze that swept through Taiwan a few years ago, when swarms of people started up egg tart stores, most of which went bust.
If the government believes in Krugman’s theories, obviously it needs to do much more. Just reading the economist’s book and listening to his speeches are not enough.
Jeff Wu is a doctoral candidate in economics.
TRANSLATED BY TED YANG.
Concerns that the US might abandon Taiwan are often overstated. While US President Donald Trump’s handling of Ukraine raised unease in Taiwan, it is crucial to recognize that Taiwan is not Ukraine. Under Trump, the US views Ukraine largely as a European problem, whereas the Indo-Pacific region remains its primary geopolitical focus. Taipei holds immense strategic value for Washington and is unlikely to be treated as a bargaining chip in US-China relations. Trump’s vision of “making America great again” would be directly undermined by any move to abandon Taiwan. Despite the rhetoric of “America First,” the Trump administration understands the necessity of
In an article published on this page on Tuesday, Kaohsiung-based journalist Julien Oeuillet wrote that “legions of people worldwide would care if a disaster occurred in South Korea or Japan, but the same people would not bat an eyelid if Taiwan disappeared.” That is quite a statement. We are constantly reading about the importance of Taiwan Semiconductor Manufacturing Co (TSMC), hailed in Taiwan as the nation’s “silicon shield” protecting it from hostile foreign forces such as the Chinese Communist Party (CCP), and so crucial to the global supply chain for semiconductors that its loss would cost the global economy US$1
US President Donald Trump’s challenge to domestic American economic-political priorities, and abroad to the global balance of power, are not a threat to the security of Taiwan. Trump’s success can go far to contain the real threat — the Chinese Communist Party’s (CCP) surge to hegemony — while offering expanded defensive opportunities for Taiwan. In a stunning affirmation of the CCP policy of “forceful reunification,” an obscene euphemism for the invasion of Taiwan and the destruction of its democracy, on March 13, 2024, the People’s Liberation Army’s (PLA) used Chinese social media platforms to show the first-time linkage of three new
Sasha B. Chhabra’s column (“Michelle Yeoh should no longer be welcome,” March 26, page 8) lamented an Instagram post by renowned actress Michelle Yeoh (楊紫瓊) about her recent visit to “Taipei, China.” It is Chhabra’s opinion that, in response to parroting Beijing’s propaganda about the status of Taiwan, Yeoh should be banned from entering this nation and her films cut off from funding by government-backed agencies, as well as disqualified from competing in the Golden Horse Awards. She and other celebrities, he wrote, must be made to understand “that there are consequences for their actions if they become political pawns of
RSS