When he isn’t giving us his Theology of Holy Keynesianism, Paul Krugman now is claiming that “protectionism,” or at least the protectionism managed by brilliant people like him, can “make the world as a whole better off” (emphasis his). (This came from his February 1 post, and I guess I am sorry I missed it….)

Now, Krugman allegedly won his Nobel Prize for “trade theories,” and one of the things I pointed out in my “Krugman in Wonderland” article in Forbes.com was that he pretty much dressed up Mercantilism in a new suit to make it look more sophisticated.Of course, Krugman has a rejoinder for anyone who would doubt his brilliance:

What’s the counter-argument? Don’t say that any theory which has good things to say about protectionism must be wrong: that’s theology, not economics.

So, Krugman’s “Stimulus Uber Alles” nonsense is science, but whenever one speaks of protectionism being bad, that is “theology.” This is interesting, for protectionism always is about government blocking mutually-beneficial gains from trade in order to benefit producers that are higher-cost and less efficient than the producers being targeted for government attacks.

(I would add that theology once was called “Queen of the Sciences,” but that was before people like Krugman decided that theology was something in the realm of what Mises called “metaphysics.” Mises also noted that Keynesians were declaring any free market economics to be “metaphysics,” so I guess Krugman is keeping up a proud tradition.)

How does he get away with this? Well, according to The Great and Wise One, the rules have changed:

The right argument, I think, is in terms of political economy. Everything I’ve just said applies only when the world is stuck in a liquidity trap; that’s where we are now, but it won’t be the normal situation. And if we go all protectionist, that will shatter the hard-won achievements of 70 years of trade negotiations — and it might take decades to put Humpty-Dumpty back together again.

But there is a short-run case for protectionism — and that case will increase in force if we don’t have an effective economic recovery program.

You see, in our present situation, there no longer is the Law of Scarcity or the Law of Opportunity Cost. How do we know that? Krugman has decreed it, and woe to the person who denies the Truth.

(Hat Tip to Jim May)