All capitalism is to some extent wasteful, but America, says Krugman, is especially so.
Is American capitalism inherently wasteful?
Paul Krugman: Well capitalism … is always somewhat wasteful. As is . . . Well you know all systems are wasteful. But ours has some serious . . . everything from the vast sums that insurance companies spend trying to not cover people who are likely to have high costs and so on. I’m not sure. I don’t think the differences are as large. If you asked how different philosophically is American capitalism from French capitalism, it’s much less than people imagine. There are big differences in the policies, but those are more historical legacies than the fundamental philosophies. So no, I’m certainly not an America basher on these things. In many ways our, you know, entrepreneurial spirit is . . . is something very admirable. And we do . . . The fact of the matter is we do do a lot to take care of the less fortunate; just not enough by my standards.