The Economics Show The Wolf-Krugman Exchange: the crisis of trust
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Jun 6, 2025 
In a thought-provoking discussion, Nobel Prize-winning economist Paul Krugman shares insights on the eroding trust in U.S. trade policies and governance. He and Martin Wolf delve into the consequences of abandoned agreements and unpredictable policies. They also explore the fragility of international alliances in light of recent conflicts and the alarming rise in anti-science sentiment affecting academic innovation. Their dialogue touches on the modern political landscape, intertwined with a unique connection to music's role in shaping trust and emotional resonance.
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Eroding Trade System Principles
- The US under Trump abandoned fundamental trade system principles, including non-discrimination and rule-bound tariffs.
- This marks a drastic political shift resembling arbitrary despotism, undermining long-term economic and political stability.
Political Arbitrary Power Returns
- Arbitrary political discretion in tariffs mirrors abuses from early English political history.
- This undermines business planning due to unpredictable government actions, fundamentally shaking economic foundations.
US Governance Faces Revolutionary Shift
- The broader systemic upheaval in US governance challenges the age-old constitutional rule of law.
- This could represent a revolutionary or counter-revolutionary moment in US and global history.
