Krugman the Isolationist?

Alex Tabarrok, my second-favorite libertarian economist (the first being Tyler Cowen) unloads on Paul Krugman for his most recent column on China, saying he has abandoned both liberalism and economics. Has he? Here's Alex's take:

Marginal revolution: Paul Krugman used to be a liberal economist; no longer. His abandonment of economics has long been plain, Krugman's abandonment of liberalism was announced in yesterday's commentary on China.

What really upset me about Krugman's column is not the bizarre economics but the illiberal politics. In the last twenty years China's economic growth has lifted hundreds of millions of people out of poverty and nearly unspeakable deprivation. China's abandonment of communism is one of the great humanitarian events of all time. And what does Krugman have to say about this improvement in well being? (I paraphrase)

'Watch out. Now is the time to panic. Their gain is your loss.'

It's hard to over-estimate how awful Krugman's column is. Consider this:

'China, unlike Japan, really does seem to be emerging as America's strategic rival and a competitor for scarce resources...'

'Strategic rival' is the kind of term that would-be Metternichs throw about to impress their girlfriends, but what does it mean? Everyone is a competitor for scarce resources. Even those nice Canadians compete with Americans for scarce resources. Are Canadians a strategic rival to be feared?

The full story is here. I come down on Tabarrok's side; I'd rather trade with China than fight them. And if we're as worried as we are about China buying an oil company, maybe that tells us more about ourselves than China. Our addiction to oil isn't healthy. As an urban planner I beat the same tired horse constantly, but I'll do it again here: almost half our oil goes to driving, and we drive wastefully and excessively because driving is underpriced. Raise the gas tax. Use congestion tolls and cordon tolls and channel the money to local governments and/or mass transit (preferably buses). Charge people market rates to park, and give the revenue to the neighborhoods where it is raised. All of this is painful, but infinitely preferable to a war with China.

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