This is a great example. I'm glad he spelled out the Hayek point.
His blog is kind of like a mini-NY times column. There's not the interaction with readers that other blogs have, so it's a way of posting quick thoughts. That's not the dynamic on my blog, for example.
That means he'll write quick dismissals of Hayek and The Road to Serfdom sometimes - he's sharing his view after all.
The usual suspects cry bloody murder and just assume Krugman is in the dark. He's not that naïve, and this is a good example. He knows there are counter arguments. He's read them. He evaluates them to be weak, and the point of "well what was his point?" that Krugman makes is a good one. "Welfare states will go Stalinist unless people keep them from going Stalinist" is a pretty vacuous statement as an analytical statement (if it's a call to action or something like that it's less vacuous, but RTS is usually treated like an insightful analytic statement about the modern welfare state).
I for one try to avoid talking about RTS because I honestly don't feel like I can get a straight answer from anyone. When they are arguing against critics they it doesn't argue welfare states go Stalinist, but when talking amongst themselves that always seems to be what they think it does say. And it's impossible to discuss the book without getting accused of arguing in bad faith by someone, so I avoid that and talk about other things Hayek has written that don't raise quite the same hackles.
Add this to his discussion the other day about price distortions, and I think people need to start accepting he's not as naïve as some people suggest.
He just thinks you're wrong.