That is, is the distribution of scarce resources bound to laws of reality like the falling object is bound to laws of physics? Or, is economics a cultural/political subject that can be shaped any way we like.
If economics is like physics, Ferguson is right, and we're screwed.
If economics is like cultural studies, Krugman's right, and, with some deft movin' and shakin', we'll be good as new soon.
I know what I suspect--that Ferguson is right; but I don't know if what I suspect is correct, because if Krugman is correct, then what I suspect is just a function of my cultural biases.
Postscript: you probably know Krugman. He's always on with Stephanouosuosplous on Sunday morning and has an influential column in the NY Times. If you don't know Ferguson, you really should. He's the "conservative" to Krugman's liberal, but he really is a serious intellectual. As far as "ethos" goes, this is a draw.
PPS: If you haven't watched PBS's documentary, The Ascent of Money, hosted by Ferguson, you've missed out:
UPDATE: read more from the Freakonomics blog. Anybody know enough about "deflation" to convince me that Krugman's view isn't insane? Rising interest rates means, in Krugman's interpretation, that "fears of deflation" are diminishing.
Deflation: an increase in the real value of money.