The Economics Show The Wolf-Krugman Exchange: America vs the world
46 snips
Dec 10, 2025 
Paul Krugman, a Nobel laureate economist and Substack writer, joins FT's Martin Wolf to dissect the implications of the recent U.S. national security strategy. They discuss how the U.S. criticized Europe while downplaying threats from Russia, pushing 'patriotic' far-right politics. Krugman questions whether the U.S. truly prioritizes Latin America and explores whether Europe can achieve military and industrial independence. They also tackle the competitive landscape with China and how the U.S. inadvertently strengthens its rival.
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Steps Toward European Defense Autonomy
- Europe should increase defense spending, remove duplication, and mobilize manpower to gain security autonomy.
- Martin Wolf suggests a coordinated European industrial and defense push, citing Airbus and Rheinmetall as precedents.
Tech Lag Is Narrow, Solvable
- Europe's technological lag is concentrated in information industries, not across the board.
- Martin Wolf notes productivity metrics and everyday tech adoption suggest solvable gaps with the will to act.
Civilization Rhetoric Is Racialized
- The NSS frames Europe's 'civilizational crisis' in racial terms and promotes support for 'patriotic' (far-right) parties.
- Paul Krugman finds this racial framing astonishing and likens its echoes to Nazi rhetoric.
