In a recent NY Times article, “Financial Reform Endgame,” Paul Krugman seems to suggest that politicians should sometimes make the perfect the enemy of the good. The issue that gives rise to this suggestion is whether, in response to the recent economic collapse, the U.S. Congress should pass financial reform aimed at preventing future economic collapses even if the proposed reform fails to establish, among other things, an independent protection agency for consumers of financial products. According to Krugman, the answer is no, because passing such a defanged version of reform today, while doing little to prevent a future economic collapse, would provide society with a false sense of security, which, in turn, would prevent politicians from passing a more robust version of reform tomorrow.
So, how compelling is Krugman’s argument? It certainly seems plausible, and the conclusion is appealing in its apparent boldness. But I suspect that there are assumptions at play, which, if brought to the surface, might make one wonder about its soundness. For instance, if we follow Krugman’s rhetoric, then it seems there are times when politicians should make the perfect the enemy of the good. But when? The last line in Krugman’s article offers a clue: “No reform, coupled with a campaign to name and shame the people responsible, is better than a cosmetic reform that just covers up failure to act.” Put more generally, the perfect should be made the enemy of the good when the good being sought is only apparent. This means that Krugman’s argument is sound only if we grant him the assumption that the defanged version of reform will do (close to) no good whatsoever (i.e., not result in any appreciable reduction in the likelihood of a future economic collapse). Because Krugman has yet to make this assumption explicit, much less defend it, it seems his conclusion that no reform is better than some reform requires further support. To be fair, though, if nothing else, Krugman has given politicians a reason to be wary of unwittingly exchanging one potential enemy of the good (perfection) for another (expedience).
Causation and Responsibility
By Carolina Sartorio , University of Wisconsin at Madison
(Vol. 2, August 2007)