Paul Krugman, the American economist and 2008 Nobel Laureate in Economics, was the keynote speaker today at the ‘Speaking in Freedom’ conference held at the Money Museum. The event, organized by the Bank of Portugal, commemorated 50 years since the Carnation Revolution of April 25, 1974.
During the conference, Krugman addressed the tariffs imposed by the administration of Donald Trump, noting Portugal’s slightly higher exposure compared to the average European country, while also suggesting that the impact would be mitigated due to its membership in the European Union.
“As this trade war unfolds, as all this madness develops, we must ask how exposed this country is… Portugal is probably a little more exposed than the average European country. But, considering the historical context, I believe we shouldn’t be too concerned,” he stated.
Krugman first visited Portugal in 1976, shortly after the revolution, as part of a group of MIT students invited by the Bank of Portugal.
He recalled a nation that was very poor and backwards, pointing out that during the complex revolutionary process, there was no assurance that Portugal would eventually become a democracy.
“The democratization of Portugal wasn’t achieved in a day. It was a very turbulent period… The previous fascist regime had been overthrown, but what would replace it? There was much concern, and many people here, in Washington, and in Moscow thought that Portugal might become a communist state,” he emphasized.
Krugman noted that democratic governments, besides ensuring freedom, must also address other “more mundane” necessities, such as the economy.
The economist contrasted the nation he encountered in 1976 with the present, reflecting on areas like infrastructure and health.
“I think most people here have no idea how the roads, the energy grid, and telecommunications were in 1976 because, my god, they were really terrible. And they have improved tremendously,” he said.
Krugman remarked that although Portugal is poorer than some Northern European economies, it has made “an enormous convergence in quality of life” and managed to avoid the marginalization “that has befallen many peripheral regions.”
On another note, he expressed concern about the aging population, considering it a significant issue for Western societies due to the decline in the active-age population.
Returning to the Portuguese revolution, Paul Krugman stated that he often recalls this “very happy story” and the “difficult choices” Portugal made “to be a democracy, a free society, a decent country.”
“Sometimes I tell this story to myself to feel a bit better about what’s happening at home,” he added.
Krugman even confessed that the flight back from Portugal to his home almost scares him.
“The times are so terrible in the United States that I almost fear going back,” he remarked.
