Krugman: "International competition is a mostly bogus notion; class warfare is very, very real"

[phantom power]

The chart shows real GDP per working-age adult (15-64) in France, Japan, and America since 1990. The demographic correction is important: Japan has lagged economically, but a lot of that is just demography.



What’s striking here is how similar the three look. Japan lagged in the late 1990s and early 2000s, but recovered. France has lagged since 2010, largely thanks to the eurozone crisis and its misguided austerity policies. But given how much rhetoric there is about structural problems here and there, what’s striking is how little divergence there has been among advanced countries.

What this tells you, I think, isn’t just that international competition is far less important than legend has it. It also suggests that economic growth is pretty insensitive to policy: France and the US are at the extremes of advanced-country regimes, yet there’s not much difference in their long-term performance.

But does this say that policy doesn’t matter? Not at all. For while there is not, repeat not, anything like the zero-sum competition among nations so beloved of business types, there really is the question of who gets the gains. U.S. economic growth has been OK these past 25 years; US family incomes, not so much, because such a large share of growth goes to the very top.

International competition is a mostly bogus notion; class warfare is very, very real.

http://krugman.blogs.nytimes.com/2015/08/11/competitiveness-and-class-warfare/

[hifiguy]

1. Once again, Krugman cuts to the core of the issue

and tells it like it is.

[ananda]

2. Kick

So true.

[LiberalAndProud]

3. K&R because Krugman is informative and interesting.

Also uncontroversial and uncommented. Thanks for the OP.