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Paul Krugman and the Green-Eyed Monster

The hypocrisy of those who defend Paul Krugman against charges of hypocrisy.

Last week, Gawker got the scoop on the terms of New York Times columnist Paul Krugman’s new position with the City University of New York. A letter from the university offers to pay Krugman $225,000 for his first nine months of work, in exchange for which he has no responsibilities except to “play a modest role in our public events.” Translation: we’re paying you $25,000 per month to go to a couple of cocktail parties. Nice work if you can get it.

Add to that the money Krugman is paid by the Times, the sales of his books, and presumably a few sideline consulting jobs like that sweet gig he got from Enron, and it’s clear that Krugman is well within the top “one percent” his allies and readers keep railing against.

But here’s the kicker. The purpose of Krugman’s six-figure no-show job is to “contribute to the build-up” of a new institute for the study of—drumroll, please—income inequality.

You know what? Paul Krugman will be in a great position to contribute to scholarly research on inequality—as a case study.

The hypocrisy is so obvious no one could evade it, right? Wrong. Legions of lefties have come out to defend Krugman’s one-percenter deal. Of course, they say, it’s perfectly natural that talented people with lots of accomplishments and big awards are paid very well. Why shouldn’t they be rewarded for their skills and reputation?


[P]eople on all sides of all debates should want the smartest people representing their sides, and in our society, the smartest people, particularly in academic fields, tend to be paid the most.

Or as Michael Tomasky puts it:

We live in a capitalist system. I don’t hear conservatives complaining about that too often, or about the crazy compensation earned by hedge-fund people or top corporate officers, whether they’re creating jobs or destroying them. If those people deserve to make what the market will pay them, why doesn’t Paul Krugman? You don’t have to sacrifice personal income just because you care about poor people.

Which, of course, is precisely the argument made by those who say income inequality is not the problem: that it’s normal, natural, and right for people to get paid for offering work that has a greater economic value. Except that this is precisely what Krugman and Tomasky and all the rest have been arguing against.

Note, by the way, that little cop-out phrase: that this is the way things work “in our society” because “we live in a capitalist system.” But that’s the question, isn’t it? Whether this ought to be the way things work on our society and whether we ought to let free markets set wages and profits, as opposed to having them regulated and redistributed by the state.

So why the cop-out? To allow an escape hatch for people who belong to the same caste of college-educated, upper-middle-class intellectual types as Krugman. Slate’s Reihan Salam gets to the crux of the issue.

As Krugman has made clear on more than one occasion, his quarrel is not with members of the top 5 percent or even with members of the top 1 percent. The real problem, in his view, lies with the top 0.01 percent, a category dominated by executives, especially those who work in finance…. [H]e has made it absolutely clear that he sees this threat as separate and distinct from the wage gains experienced by upper-middle-income professionals.

Fine, then, it’s not hypocrisy. It’s special pleading.

The argument is: people get paid for unusual skills and accomplishments, and it’s no crime to ask for whatever the market will bear—if you’re somebody like me. After all, I’m just barely in the one percent! But if you’re really, really rich—say, the top 0.1%—well, then you don’t deserve it.

To maintain this argument requires that you don’t reflect too much on who is actually at the very top, which as I catalogued, includes people with a lot more accomplishments than Paul Krugman. Sure, he’s an academic superstar who has won a bunch of big fancy prizes. But the people at the very top—guys like Jeff Bezos and Steve Jobs and Harold Hamm (the godfather of the fracking revolution)—have actually built something other than a theory.

So this is the worst kind of special pleading. It says: let’s allow free rein to economic ambition for guys like me who push around words and paper—but not for the people who build whole new industries out of nothing.

This is an interesting lesson about the psychology of envy. We usually regard envy as something that the poor feel toward the rich. But the green-eyed monster rarely glares more viciously than when the well-off look upon the fortunes of those who make even more than they do.

Recently, a friend told me what it’s like to work for a very successful commodities trader, describing how one of the cardinal rules of the firm is that you never discuss your compensation with your coworkers. Don’t ask and don’t tell. The rule was put in place by the founder of the firm to head off this psychology of envy. The message is: focus on your own work and don’t worry about others. It’s pretty good advice, especially because I know enough about the firm to assure you that anyone who works there is doing very well for himself and has no grounds to complain. Yet even there, the green-eyed monster has to be reined in.

Or you can unleash it. That’s the upshot of President Obama recent executive orders to reduce inequality by “forcing federal contractors to let their workers discuss their earnings with one another and to disclose more information about what their employees earn.” It’s a Pandora’s Box of vicious office politics.

Again, we’re mostly talking about salaried, white-collar workers living off a flow of money from the federal government. These people are doing relatively well, particularly in this economy, when government money generally means better pay, better benefits, and more job security than everyone else. But that’s not enough. Apparently you also have to monitor your coworkers to make sure you’re getting your equal share and nobody’s sticking his head too high above the herd.

That’s what this is all about. “Inequality” is the word the left uses, but it’s not what they really mean. If they did, they might wonder about bigger problems, like why big cities are turning into two-tier class societies. And maybe they would be just a wee bit embarrassed to accept six-figure salaries for which they do no work.

But “inequality” is just a pleasant, self-flattering placeholder to disguise the ugliness of their real motive: envy of anyone who has more than them.

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