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The Accidental Theorist and Other Dispatches from the Dismal Science
In this wonderfully cohesive set of sharp and witty essays, Paul Krugman tackles bad economic ideas from across the political spectrum. In plain English, he enlightens us on the Asian crisis, corporate downsizing, and the globalization of the American economy, among other topics. The writing here brilliantly combines the acerbic style and clever analysis that has made Krugman famous. Imagine declaring New York its own country and you get a better picture of our trade balance with China and Hong Kong. Try reducing the economy to the production of hot dogs and buns and you’ll understand why common beliefs about the impact of production efficiency on labor demand are wrong. This is a collection that will amuse, provoke, and enlighten, in classic Paul Krugman style. "[Paul Krugman] writes better than any economist since John Maynard Keynes." — Rob Norton, Fortune "[Paul Krugman is] probably the most creative economist of his generation." — The Economist
Winner of the John Bates Clark Medal
Winner of the John Bates Clark Medal
206 pages, Paperback
First published May 6, 1998
About the author
Paul Krugman
328 books1,512 followersPaul Robin Krugman is an American economist, liberal columnist and author. He is Professor of Economics and International Affairs at the Woodrow Wilson School of Public and International Affairs, Princeton University, Centenary Professor at the London School of Economics, and an op-ed columnist for The New York Times. In 2008, Krugman won the Nobel Memorial Prize in Economics for his contributions to New Trade Theory and New Economic Geography.
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Displaying 1 - 29 of 58 reviews
April 4, 2013
It's impossible to read these twenty-year-old essays and not feel like many of them haven't aged a day. Whether you agree with them or not, or whether you even like the infamously acerbic Krugman or not, to a remarkable extent the logic behind the majority of these columns still feels fresh and relevant. I'm a big fan of his for a few reasons: I learned a lot of macro from his writings in grad school, I enjoy his lucid writing style, and I share his social-democratic political leanings with an appreciation for free trade and strong markets. All of these elements are here (though he's still in his "criticize both sides equally" phase; the first few essays have a slight hippie-punching feel to them before he gets around to deflating conservative myths), and out of his pre-George W. Bush books this might be the strongest of the lot due to its wide range of subjects and compact ability to educate and entertain.
Krugman's mission in this assortment of Slate columns is popularization, taking on a Carl Sagan-ish role of accessibly discussing contemporary economic issues. And, much like Sagan, in addition to simply explaining what simple concepts are he also wants his readers to respect the idea of rigor, and to have an appreciation of how difficult it is to make true intellectual progress when it comes to seemingly-simple economic questions. Complicated subjects like inequality ("An Unequal Exchange"), inflation (like "A Good Word For Inflation"), technological progress ("Technology's Wonders"), unemployment ("What Is Wrong With Japan"), and commodity speculation ("How Copper Came a Cropper") have clearly presented numbers and reasoning, with an eye towards teaching the reader how to know when someone is grounding their analysis in facts or opinion. He's of course unsparing in his criticism of people who he thinks are fools or liars, but even if you don't like Krugman because of his tone, facts don't lie; it really is truly remarkable that a guy like Newt Gingrich is even stupider today than he was back in 1995.
One of the main takeaways from this this essay collection, above and beyond whether you agree with any specific column or not, is that it really helps to have a consistent framework for thinking about economic issues. Is globalization good or bad? Should the US reduce the trade deficit? What are the effects of inflation on interest rates? Can we reduce unemployment to zero and have fast growth like we did in the 60s? One well-thought-out theory can be worth dozens of unsorted facts. Not every essay is as strong as it could be, but even a blunt and infuriating essay like "In Praise of Cheap Labor" is more sophisticated than its critics admit, and looks stronger every day that formerly closed countries like China develop and transform their sweatshops into boring Western 9-to-5s. He hasn't ever written a big profession-shaking epic like his hero Keynes, and at this phase in his career he probably won't ever get around to it, but his guiding ethos of progress through and with - not instead of - capitalism remains a worthy philosophy to subscribe to.
Krugman's mission in this assortment of Slate columns is popularization, taking on a Carl Sagan-ish role of accessibly discussing contemporary economic issues. And, much like Sagan, in addition to simply explaining what simple concepts are he also wants his readers to respect the idea of rigor, and to have an appreciation of how difficult it is to make true intellectual progress when it comes to seemingly-simple economic questions. Complicated subjects like inequality ("An Unequal Exchange"), inflation (like "A Good Word For Inflation"), technological progress ("Technology's Wonders"), unemployment ("What Is Wrong With Japan"), and commodity speculation ("How Copper Came a Cropper") have clearly presented numbers and reasoning, with an eye towards teaching the reader how to know when someone is grounding their analysis in facts or opinion. He's of course unsparing in his criticism of people who he thinks are fools or liars, but even if you don't like Krugman because of his tone, facts don't lie; it really is truly remarkable that a guy like Newt Gingrich is even stupider today than he was back in 1995.
One of the main takeaways from this this essay collection, above and beyond whether you agree with any specific column or not, is that it really helps to have a consistent framework for thinking about economic issues. Is globalization good or bad? Should the US reduce the trade deficit? What are the effects of inflation on interest rates? Can we reduce unemployment to zero and have fast growth like we did in the 60s? One well-thought-out theory can be worth dozens of unsorted facts. Not every essay is as strong as it could be, but even a blunt and infuriating essay like "In Praise of Cheap Labor" is more sophisticated than its critics admit, and looks stronger every day that formerly closed countries like China develop and transform their sweatshops into boring Western 9-to-5s. He hasn't ever written a big profession-shaking epic like his hero Keynes, and at this phase in his career he probably won't ever get around to it, but his guiding ethos of progress through and with - not instead of - capitalism remains a worthy philosophy to subscribe to.
October 28, 2008
Krugman won the Nobel Prize in Economics just a few days after I checked this out of the library. I'd been reading his essays in the NYT for years, and his books had been on my to-be-read list for almost as long.
This set of essays is easy to read, mostly. At times the concepts can get a bit slippery to those of us that might not sufficiently remember enough about macroeconomics. They are a bit dated, however, dealing with events of the mid-to-late nineties, and I kept wondering whether and to what extent history had proved him right or wrong. For example, I believe France, whose economic planning he disparages, actually did quite well in the following years. However, they might have also shifted their planning to align more with his prescriptions.
I'd recommend the book as a pretty easy read to those that are curious about and at least somewhat conversant with economic theory. I do wish his articles were as amusing as Galbraith's, but that is perhaps asking for too much.
This set of essays is easy to read, mostly. At times the concepts can get a bit slippery to those of us that might not sufficiently remember enough about macroeconomics. They are a bit dated, however, dealing with events of the mid-to-late nineties, and I kept wondering whether and to what extent history had proved him right or wrong. For example, I believe France, whose economic planning he disparages, actually did quite well in the following years. However, they might have also shifted their planning to align more with his prescriptions.
I'd recommend the book as a pretty easy read to those that are curious about and at least somewhat conversant with economic theory. I do wish his articles were as amusing as Galbraith's, but that is perhaps asking for too much.
October 11, 2009
This collection of essays - most written around 10 yrs ago, in the late 90s - is an easy read, very accessible, but brief and cogent essays on macroeconomics. While the situations and examples are sometimes a little dated, a these were mostly magazine pieces, the ideas are still relevant for the most part. A few of the metaphors are quite brilliant for distilling otherwise boring-to-many issues (like monetary policy) for a layperson.
He writes for the NYT. He's liberal and much of this book attacks supply-side economics, but he does criticise policies from the left as well as the right. This might be a good quick read to prep yourself before holiday family visits, in case your family includes conservatives and conversation veers towards some of the issues covered...
He writes for the NYT. He's liberal and much of this book attacks supply-side economics, but he does criticise policies from the left as well as the right. This might be a good quick read to prep yourself before holiday family visits, in case your family includes conservatives and conversation veers towards some of the issues covered...
April 30, 2016
Although nearing 20 years old, and with some essays going back as far as 1995, this book remains highly relevant to the global economy today, touching on a number of issues from inequality to currency to the environment. I would highly recommend for those interested in economics.
April 11, 2019
Idk why I read this tbh. Useful when he keeps it simple and I'm always here for takedowns of supply side economics but too often he tries too hard to make himself sound more intelligent than the person he's trying to disprove. In addition, as per usual with Krugman, anything said regarding technology can be thrown in the nearest dumpster lol
July 23, 2012
I like Paul Krugman, he's really good at explaining economics, and his take on economic conservatism and health care is illuminating:
One part of the book that is confusing is that it consists of a series of columns written in the mid-1990s, and it jumps around a lot, and it's hard to remember what was going on at the time, how bad the Mexican Tequila crisis and the Asian IMF crises was, and how optimistic people were about the Internet and the New Economy, a little more context would be helpful. Also, Krugman does such a good job of refuting other economists in the book, it makes me wonder if it really is that simple, it probably isn't but without a fuller understanding of the other side, Krugman is simply TOO good of an advocate.
The reason, I believe, is that the political appeal of economic conservatism in the United States really has little to do with an appreciation of the virtues of free markets. Instead it is about the promise of something for nothing – a rejection of the idea taxes must be collected, that scarce resources must be conserved. The reason the electorate likes tax reform schemes is that they always end up being tax-cutting schemes, based on the premise that the voters pay taxes but someone else pays the benefits – even though anyone who looks at where the money actually goes quickly realizes that Pogo was right: We have met the enemy and they are us (p. 178)
...
Why can’t we seem to keep a lid on medical costs? The answer – the clean little secret of health care – is simple: We actually do get something for our money. In fact, there is a consensus among health care experts that the main driving force behind rising costs is neither greed, nor inefficiency, nor even the aging of our population, but technological progress. Medical expenditures used to be small, not because doctors were cheap or hospitals were well managed, but because there was only so much medicine had to offer, no matter how much you were willing to spend. Since the 1940s, however, every year has brought new medical advances: new diagnostic techniques that can (at great expense) identify problems that can only be guessed at; new surgical procedures that can (at great expense) correct problems that could previously only be allowed to take their course; new therapies that can (at great expense) cure or alleviate conditions that could previously only be endured. We spend ever more on medicine mainly because we keep on finding good new things that (a lot of) money can buy. (p. 186-87)
One part of the book that is confusing is that it consists of a series of columns written in the mid-1990s, and it jumps around a lot, and it's hard to remember what was going on at the time, how bad the Mexican Tequila crisis and the Asian IMF crises was, and how optimistic people were about the Internet and the New Economy, a little more context would be helpful. Also, Krugman does such a good job of refuting other economists in the book, it makes me wonder if it really is that simple, it probably isn't but without a fuller understanding of the other side, Krugman is simply TOO good of an advocate.
August 9, 2015
El libro pretende ser de "divulgación", sin embargo, me fue difícil avanzar en la lectura. Con una rápida revisión de conceptos de macroeconomía (Coursera), me fue más fácil avanzar y terminar el libro. Eso no implica, claro, que yo entienda macroeconomía ó que haya entendido todo. Pero sí me dí cuenta de lo mucho que no entendía y algunas ideas que platica en el libro son muy interesantes y cambiaron la forma en la que yo pensaba.
November 4, 2019
ithout any recourse to a penumbra of mind numbing equations and a plethora of jargons, Paul Krugman in this collection of 30 odd concise essays demonstrates that the proverbial 'dismal' science can in fact be anything but dismal! Covering a wide repertoire of topics from environment to egregious speculation; from downsizing to inflation, "The Accidental Theorist" speaks out, nay pours forth with candor, vigour and vibrancy.
March 14, 2015
Una colección de ensayos de los años 90 cargados de ironía y mucho sentido del humor al momento de explicar conceptos de la teoría económica a la luz de algunos de los hechos más destacados de la política norteamericana de la época y de las grandes crisis monetarias del mismo periodo ( México, Argentina, Asía, UK, Suecia)
Un libro muy divertido, que muestra que la economía en las manos apropiadas se puede volver mucho más que la "dismal science".
Un libro muy divertido, que muestra que la economía en las manos apropiadas se puede volver mucho más que la "dismal science".
June 21, 2015
This is a kickstart of Paul Krugman books in my list. It feels fresh as never thought that it was written almost two decades ago. Every point highlighted seems very fresh as exactly what has he predicted, happened. While reading this book, my subconcious mind had read it as it is been reviewed in TheEdge news. Remarkably, interesting and full of insight. Thanks to Prof. Meruoane who recommendes me to Paul Krugman's book. More adventure to come!
October 2, 2017
Sure, it is a bit dated; but that does not make it wrong. Being a selection of articles it lacks a consistent theme. However, it is worth a read and is very readable.
Overall, I enjoyed it; but I would be hesitant to suggest it. My reason for being hesitant to suggest it is that it really doesn't address any particular issue. What it provided me was a new insight into how to communicate economic information without jargon.
Overall, I enjoyed it; but I would be hesitant to suggest it. My reason for being hesitant to suggest it is that it really doesn't address any particular issue. What it provided me was a new insight into how to communicate economic information without jargon.
June 11, 2015
There are some good nubs in this book but it is very dated. Mostly we spend our time seeing Krugman joust with windmills and strut with straw knights of bygone theories, at least it's a short read.
August 12, 2009
Very few economists write well. Very few journalists and politicians understand economics. Therefore, the public remains remarkably ill-informed about economic matters and this has realworld consequences: policy decisions are not infrequently based on misinformation and inept reasoning, and this can and does hurt the country’s economic health. A Nobel Prize-winning economist and New York Times columnist, Krugman writes very well and pulls no punches: he is, as my economist brother says, “a younger Galbraith [in tartness and felicity of style:] who, unlike Galbraith, is also a first-rate economist.” The father of “speculative attack [of financial markets:] theory,” Krugman often zaps the conventional wisdom, names names, and is not afraid to call a bonehead a bonehead.
The chapters are short and sweet because most were originally reviews or columns written for magazines and newspapers. This makes the book easy to read but hard to summarize—the latter because each piece focuses on a very specific newsworthy-at-the-time topic. So I will give tidbits of Krugman’s ideas and observations; for the whole tamale, read the book.
On one point Krugman bangs the table over and over again: DO YOUR HOMEWORK. Everyone loves to have an opinion about matters economic, he says, but few take the trouble to really think about what they’re saying on the subject.
*Doing Economics. “A real economist starts not with a policy view but with a story about how the world works. That story almost always takes the form of a model—a simplified representation of the world, which helps you cut through the complexities. Once you have a model, you can ask how well it fits the facts.” “The act of putting your thoughts together into a coherent model forces you into conclusions you never intended, forces you to give up fondly held beliefs.” “The world rarely gives us clean natural experiments.” “If you want to be truly informed about economics (or anything else), you must go back to school—and keep going back, again and again.” “Simplistic ideas in economics often become badges of identity for groups of like-minded people, who repeat certain phrases to each other, and eventually mistake repetition for self-evident truth.” “Shibboleths make people feel good. Not only are they an alternative to the pain of hard thinking, but because so many people repeat them, they offer a reassuring sense of community.”
*“Vulgar Keynsians.” “Inevitably there are those who follow the letter of the innovator’s ideas but misunderstand their spirit, who are more dogmatic in their radicalism than the orthodox were in their orthodoxy. And as ideas spread, they become increasingly simplistic—until what eventually becomes part of the public consciousness, part of what ‘everyone knows,’ is no more than a crude caricature of the original.”
*The Power of the Fed. “Instead of an invisible hand pushing the economy toward full employment in some unspecified long run, we have the invisible hand of the Fed pushing us toward its estimate of the noninflationary unemployment rate over the course of two or three years. To accomplish this, the board must raise or lower interest rates to bring savings and investment at that target unemployment rate in line with each other.” “You may quarrel with the Fed chairman’s judgment…but you can hardly dispute his power. Indeed, if you want a simple economic model for predicting the unemployment rate in the United States over the next few years, here it is: It will be what Greenspan wants it to be, plus or minus a random error reflecting the fact that he is not quite God.” [This book was written in the late 1990s.:]
*Supply-side Economics. “Supply-side economics is a crank doctrine pure and simple, yet it has been the official ideology of the Republican Party for seventeen years.” “You have to turn to Marxism to find a forecasting fiasco on the same scale [as Supply-sider forecasting when Clinton took office:].” Why, then, does the Supply-sider nonsense persist? Because 1) “It appeals to the prejudices of extremely rich men,” who can subsidize any number of think tanks and third-rate economists to justify their position, and 2) “It offers self-esteem to the intellectually insecure”—those who don’t understand economics but want to convince people that they do. “Because economics touches so much of life, everyone wants to have an opinion. Yet the kind of economics covered in the textbooks is a technical subject that many people find hard to follow. How reassuring, then, to be told that it is all irrelevant…” “Human nature being what it is, it is too much to expect someone whose career or sense of self-worth is based on his identification with some doctrine to abandon that doctrine merely because it has been falsified by events.” And finally: “The history of economic doctrines teaches us that the influence of an idea may have nothing to do with its quality—that an ideology can attract a devoted following, even come to the corridors of power, without a shred of logic or evidence in its favor.”
*Government “Waste.” “The political appeal of radical conservatism has always been based on a fundamentally untrue vision of what the federal government is and does.” To wit: in fiscal 1994, 82.2% of the federal budget was spent on services most Americans not only approve but take for granted: social security (21.6%), defense (18.9%), interest on debt (13.7%), Medicare (9.7%), Medicaid (5.8%), federal worker pensions (4.2%), veteran’s benefits (2.6%), transportation—e.g., interstate highway system (2.6%), unemployment insurance (2%), and administration of justice (1.1%). Review of these numbers makes it apparent that if there is a government spending problem it is not bureaucratic waste but the elderly. “An honest advocate [oxymoron?:] of smaller government would campaign not against elitist bureaucrats but against nice middle-class retirees in their Florida condominiums.”
*Technological “Progress.” “The change in how Americans lived between 1917 and 1957 was immensely greater than the change between 1957 and the present.” “The idea that we are living in an age of dramatic technological progress is mainly hype; the reality is that we live in a time when the fundamental things are actually not changing very rapidly at all.” “The techno-hype that surrounds us has some real costs. It causes businesses to waste money, it causes politicians to seek high-tech fixes…when they should be getting back to basics.”
*Currency Attacks. Third-world economies can be devastated by the speculative attacks of ruthless financiers who gamble on exchange rates. “Knowing that eventually the currency would drop in value, investors would try to get out of it in advance—but their very effort to get out of a weak currency would itself precipitate the collapse of the fixed rate. Understanding this, sophisticated investors would try to get out still earlier…”—causing a “self-fulfilling currency crisis.” “These days there really are investors who not only move their money in anticipation of a currency crisis, but actually do their best to trigger that crisis for fun and profit.” These Krugman suggests calling “Soroi” [after George Soros:]. How defeat the attackers? Either float the exchange rate (so there will be no fixed rate to attack), or fix the rate unequivocally (so attackers will be unable to influence it). “An imperfectly credible fixed exchange rate combines the worst of both worlds: You forsake the policy freedom that comes with a flexible rate, yet you remain open to devastating speculative attacks.”
*The Great Green Tax Shift. “When it comes to the environment, we do not expect the free market to get it right." “Most upper-middle-class Americans are sentimental about the environment, as long as protecting it does not impinge on their lifestyle.” Solution: pollution tax, which could eventually replace the income tax as the government’s primary source of revenue. “The Great Green Tax Shift—a shift away from taxes on employment and income to taxes on pollution and other negative externalities—has everything going for it.” “The idea of pollution taxes is one of those iconic positions, like free trade, that commands the assent of virtually every card-carrying economist.” BUT: it is very difficult to implement because of the “Three I’s”: Ignorance, Interests (e.g., energy companies), and Ideology.
*Democracy and the Free Rider Problem. “The free-rider problem arises whenever some valuable good or service is not ‘excludable’—that is, whenever the benefit cannot be restricted only to those who pay for it.” [Why should an individual pay for something when he can get it for free by letting someone else pay for it?:] “The free-rider problem is the most important reason all sane people concede that we need a government with some coercive power…” Unfortunately: the democratic process is itself a victim of the free-rider problem. “Everybody’s business is nobody’s business” (says Samuel Popkin)—which leaves politicians wide open to special interests. “Any practical politician comes to believe that betraying the public interest [in exchange for lobbyist dollars:] on small issues involves little political cost, because voters lack the individual incentive to notice.” “There is ultimately no way to make government by the people truly be government for the people. That is what rat choice teaches, and nobody has yet proved it wrong—even in theory.”
*“Success” in America. “You could even argue that American society in the 1990s is an engine that maximizes achievement yet minimizes satisfaction…. Modern America…is a hugely unequal society in which anyone can achieve awesome success, but not many actually do. The result is that many—perhaps even most—people feel that they have failed to make the cut…”
*Nice Turns of Phrase. Krugman is adept at turning a phrase. Here are some out-of-context examples: “A simple story is not the same thing as a simplistic one.” “It is precisely because he was so serious that his ideas were so foolish.” “…an emotionally satisfying fiction…” “In America anything that can happen, does.” “If we focus on small problems that make headlines, we will ignore bigger problems that don’t.” “Put simply, conservatives don’t want the public to know too much, because they fear it would hurt them politically.” “When the hopes of hundreds of millions are at stake, thinking things through is not just good intellectual practice. It is a moral duty.” “The startling thing about computers is not how fast and small they have become but how stupid they remain.” Of the Fed: “…a group of charisma-impaired economists.” “Unfortunately, economics is not only about what you want—it is also about what you can get.” “While hypocrisy has its uses, it also has its dangers—above all, the danger that you may start to believe the things you hear yourself saying.” “Most bigthink books about history…turn out to offer little more than strained analogues mixed with pretentious restatements of the obvious.” “There is something special about the way the French political class discusses economics. In no other advanced country is the elite so willing to let fine phrases overrule hard thinking, to reject the lessons of experience in favor of delusions of grandeur.”
This is a must-read book. Solid economics made easy—and fun. Krugman concludes with a piece in which he looks back from the year 2096, and discusses the five major trends that observers in 1996 should have foreseen but didn’t.
Read the book.
The chapters are short and sweet because most were originally reviews or columns written for magazines and newspapers. This makes the book easy to read but hard to summarize—the latter because each piece focuses on a very specific newsworthy-at-the-time topic. So I will give tidbits of Krugman’s ideas and observations; for the whole tamale, read the book.
On one point Krugman bangs the table over and over again: DO YOUR HOMEWORK. Everyone loves to have an opinion about matters economic, he says, but few take the trouble to really think about what they’re saying on the subject.
*Doing Economics. “A real economist starts not with a policy view but with a story about how the world works. That story almost always takes the form of a model—a simplified representation of the world, which helps you cut through the complexities. Once you have a model, you can ask how well it fits the facts.” “The act of putting your thoughts together into a coherent model forces you into conclusions you never intended, forces you to give up fondly held beliefs.” “The world rarely gives us clean natural experiments.” “If you want to be truly informed about economics (or anything else), you must go back to school—and keep going back, again and again.” “Simplistic ideas in economics often become badges of identity for groups of like-minded people, who repeat certain phrases to each other, and eventually mistake repetition for self-evident truth.” “Shibboleths make people feel good. Not only are they an alternative to the pain of hard thinking, but because so many people repeat them, they offer a reassuring sense of community.”
*“Vulgar Keynsians.” “Inevitably there are those who follow the letter of the innovator’s ideas but misunderstand their spirit, who are more dogmatic in their radicalism than the orthodox were in their orthodoxy. And as ideas spread, they become increasingly simplistic—until what eventually becomes part of the public consciousness, part of what ‘everyone knows,’ is no more than a crude caricature of the original.”
*The Power of the Fed. “Instead of an invisible hand pushing the economy toward full employment in some unspecified long run, we have the invisible hand of the Fed pushing us toward its estimate of the noninflationary unemployment rate over the course of two or three years. To accomplish this, the board must raise or lower interest rates to bring savings and investment at that target unemployment rate in line with each other.” “You may quarrel with the Fed chairman’s judgment…but you can hardly dispute his power. Indeed, if you want a simple economic model for predicting the unemployment rate in the United States over the next few years, here it is: It will be what Greenspan wants it to be, plus or minus a random error reflecting the fact that he is not quite God.” [This book was written in the late 1990s.:]
*Supply-side Economics. “Supply-side economics is a crank doctrine pure and simple, yet it has been the official ideology of the Republican Party for seventeen years.” “You have to turn to Marxism to find a forecasting fiasco on the same scale [as Supply-sider forecasting when Clinton took office:].” Why, then, does the Supply-sider nonsense persist? Because 1) “It appeals to the prejudices of extremely rich men,” who can subsidize any number of think tanks and third-rate economists to justify their position, and 2) “It offers self-esteem to the intellectually insecure”—those who don’t understand economics but want to convince people that they do. “Because economics touches so much of life, everyone wants to have an opinion. Yet the kind of economics covered in the textbooks is a technical subject that many people find hard to follow. How reassuring, then, to be told that it is all irrelevant…” “Human nature being what it is, it is too much to expect someone whose career or sense of self-worth is based on his identification with some doctrine to abandon that doctrine merely because it has been falsified by events.” And finally: “The history of economic doctrines teaches us that the influence of an idea may have nothing to do with its quality—that an ideology can attract a devoted following, even come to the corridors of power, without a shred of logic or evidence in its favor.”
*Government “Waste.” “The political appeal of radical conservatism has always been based on a fundamentally untrue vision of what the federal government is and does.” To wit: in fiscal 1994, 82.2% of the federal budget was spent on services most Americans not only approve but take for granted: social security (21.6%), defense (18.9%), interest on debt (13.7%), Medicare (9.7%), Medicaid (5.8%), federal worker pensions (4.2%), veteran’s benefits (2.6%), transportation—e.g., interstate highway system (2.6%), unemployment insurance (2%), and administration of justice (1.1%). Review of these numbers makes it apparent that if there is a government spending problem it is not bureaucratic waste but the elderly. “An honest advocate [oxymoron?:] of smaller government would campaign not against elitist bureaucrats but against nice middle-class retirees in their Florida condominiums.”
*Technological “Progress.” “The change in how Americans lived between 1917 and 1957 was immensely greater than the change between 1957 and the present.” “The idea that we are living in an age of dramatic technological progress is mainly hype; the reality is that we live in a time when the fundamental things are actually not changing very rapidly at all.” “The techno-hype that surrounds us has some real costs. It causes businesses to waste money, it causes politicians to seek high-tech fixes…when they should be getting back to basics.”
*Currency Attacks. Third-world economies can be devastated by the speculative attacks of ruthless financiers who gamble on exchange rates. “Knowing that eventually the currency would drop in value, investors would try to get out of it in advance—but their very effort to get out of a weak currency would itself precipitate the collapse of the fixed rate. Understanding this, sophisticated investors would try to get out still earlier…”—causing a “self-fulfilling currency crisis.” “These days there really are investors who not only move their money in anticipation of a currency crisis, but actually do their best to trigger that crisis for fun and profit.” These Krugman suggests calling “Soroi” [after George Soros:]. How defeat the attackers? Either float the exchange rate (so there will be no fixed rate to attack), or fix the rate unequivocally (so attackers will be unable to influence it). “An imperfectly credible fixed exchange rate combines the worst of both worlds: You forsake the policy freedom that comes with a flexible rate, yet you remain open to devastating speculative attacks.”
*The Great Green Tax Shift. “When it comes to the environment, we do not expect the free market to get it right." “Most upper-middle-class Americans are sentimental about the environment, as long as protecting it does not impinge on their lifestyle.” Solution: pollution tax, which could eventually replace the income tax as the government’s primary source of revenue. “The Great Green Tax Shift—a shift away from taxes on employment and income to taxes on pollution and other negative externalities—has everything going for it.” “The idea of pollution taxes is one of those iconic positions, like free trade, that commands the assent of virtually every card-carrying economist.” BUT: it is very difficult to implement because of the “Three I’s”: Ignorance, Interests (e.g., energy companies), and Ideology.
*Democracy and the Free Rider Problem. “The free-rider problem arises whenever some valuable good or service is not ‘excludable’—that is, whenever the benefit cannot be restricted only to those who pay for it.” [Why should an individual pay for something when he can get it for free by letting someone else pay for it?:] “The free-rider problem is the most important reason all sane people concede that we need a government with some coercive power…” Unfortunately: the democratic process is itself a victim of the free-rider problem. “Everybody’s business is nobody’s business” (says Samuel Popkin)—which leaves politicians wide open to special interests. “Any practical politician comes to believe that betraying the public interest [in exchange for lobbyist dollars:] on small issues involves little political cost, because voters lack the individual incentive to notice.” “There is ultimately no way to make government by the people truly be government for the people. That is what rat choice teaches, and nobody has yet proved it wrong—even in theory.”
*“Success” in America. “You could even argue that American society in the 1990s is an engine that maximizes achievement yet minimizes satisfaction…. Modern America…is a hugely unequal society in which anyone can achieve awesome success, but not many actually do. The result is that many—perhaps even most—people feel that they have failed to make the cut…”
*Nice Turns of Phrase. Krugman is adept at turning a phrase. Here are some out-of-context examples: “A simple story is not the same thing as a simplistic one.” “It is precisely because he was so serious that his ideas were so foolish.” “…an emotionally satisfying fiction…” “In America anything that can happen, does.” “If we focus on small problems that make headlines, we will ignore bigger problems that don’t.” “Put simply, conservatives don’t want the public to know too much, because they fear it would hurt them politically.” “When the hopes of hundreds of millions are at stake, thinking things through is not just good intellectual practice. It is a moral duty.” “The startling thing about computers is not how fast and small they have become but how stupid they remain.” Of the Fed: “…a group of charisma-impaired economists.” “Unfortunately, economics is not only about what you want—it is also about what you can get.” “While hypocrisy has its uses, it also has its dangers—above all, the danger that you may start to believe the things you hear yourself saying.” “Most bigthink books about history…turn out to offer little more than strained analogues mixed with pretentious restatements of the obvious.” “There is something special about the way the French political class discusses economics. In no other advanced country is the elite so willing to let fine phrases overrule hard thinking, to reject the lessons of experience in favor of delusions of grandeur.”
This is a must-read book. Solid economics made easy—and fun. Krugman concludes with a piece in which he looks back from the year 2096, and discusses the five major trends that observers in 1996 should have foreseen but didn’t.
Read the book.
September 4, 2022
Before I get into criticizing like crazy, I did get some value and some enjoyment out of this book. Krugman has a lot of interesting things to say and is a decent, if noticeably academic, writer. He enjoys the unexpected and is a good enough sport to write a lovely speculative-future retrospective, looking back at the century from the far-off year of 2096. There’s good here. Now, on to the bad.
This essay collection says it’s entry level but is wrong. This is literal: the introduction says that this collection is meant to explain and popularize economics for the public. The problem is that it assumes the public already knows a certain amount about economics, which is a kind of myopia common to teachers that can make it difficult for an expert to explain concepts to a beginner. To make things worse, each entry is too short to fully explain itself, usually only a few pages. If you’re fresh out of school and actually remember the contents of your Econ 1100 class, this is fine; if you’re the average American looking to learn a little more about how the world works, you’re in for a lot of googling. That, combined with the frequent commentary on current events of 25 years ago, ensures that I fully understood perhaps a bit over half of this without additional research. Not a great sign for a book that is explicitly meant to make a subject accessible to the public, which brings me to my main reaction to this book. It just doesn’t do that, because it’s a collection of Slate columns and not a book written to that purpose.
It also definitely assumes the audience already knows who Paul Krugman is. Krugman is an enormously accomplished and very high-profile economist and a prolific writer. He went on to win a Nobel Prize. He’s famous! Many people do know who he is. However, entry-level and accessible to the public means the nominal target audience for this book may not have ever heard of him. I had heard the name but didn’t know any details about him before reading. This means that he fails to convincingly establish credibility, likely because he assumes he doesn’t have to.
I don’t like his tone, either. It’s smugger than it deserves to be; why should someone who isn’t in economics listen to him over any of the dozens of other economists he slams? (This book takes endless potshots at everyone—not just politicians, but also other economists and figures laypeople won’t be familiar with.) All Krugman manages to establish is that he has no patience for anything he considers “silliness,” which he usually seems to find self-explanatory. (Also not great for a guy writing to explain economics to the masses.) He makes many excellent points and well-supported arguments in these essays—I even agree with some of his opinions—but a lot of that gets lost under his attitude. And sometimes he’s wrong, because he’s taken economic models and data and written a bunch of opinion pieces. (Man, the article on how technology isn’t as amazing as everyone thinks is so confident. Hilarious how he thinks having no microwave in his kitchen is a convincing argument for why he’s an expert on tech not being very useful. That’s just evidence that you personally don’t use it to its potential, dude.) He isn’t arrogant, but he can be insufferable.
He dips into politics here and there, which is understandable due to the importance of economics on that stage (though somewhat risky when it comes to alienating the audience). This has some fascinating statements in it, because some of his thought and others’ he cites can be traced forward to the present without much difficulty. That’s pretty cool and one thing I enjoy about reading older books that discuss then-current political events.
There are some interesting ideas in here, and the short little essays are appealingly bite-sized, but there the pop science success stops. The entries are poorly written for that purpose, probably because that wasn’t their purpose when they were written. “I want to explain economics in plain English,” Krugman says, and then he fails, because this book is a collection of economics column articles from 1995-1997 and not actually written for people who don’t already know some of it. “Economics has no Carl Sagan,” Krugman laments, and it still doesn’t, because that person sure isn’t him.
This essay collection says it’s entry level but is wrong. This is literal: the introduction says that this collection is meant to explain and popularize economics for the public. The problem is that it assumes the public already knows a certain amount about economics, which is a kind of myopia common to teachers that can make it difficult for an expert to explain concepts to a beginner. To make things worse, each entry is too short to fully explain itself, usually only a few pages. If you’re fresh out of school and actually remember the contents of your Econ 1100 class, this is fine; if you’re the average American looking to learn a little more about how the world works, you’re in for a lot of googling. That, combined with the frequent commentary on current events of 25 years ago, ensures that I fully understood perhaps a bit over half of this without additional research. Not a great sign for a book that is explicitly meant to make a subject accessible to the public, which brings me to my main reaction to this book. It just doesn’t do that, because it’s a collection of Slate columns and not a book written to that purpose.
It also definitely assumes the audience already knows who Paul Krugman is. Krugman is an enormously accomplished and very high-profile economist and a prolific writer. He went on to win a Nobel Prize. He’s famous! Many people do know who he is. However, entry-level and accessible to the public means the nominal target audience for this book may not have ever heard of him. I had heard the name but didn’t know any details about him before reading. This means that he fails to convincingly establish credibility, likely because he assumes he doesn’t have to.
I don’t like his tone, either. It’s smugger than it deserves to be; why should someone who isn’t in economics listen to him over any of the dozens of other economists he slams? (This book takes endless potshots at everyone—not just politicians, but also other economists and figures laypeople won’t be familiar with.) All Krugman manages to establish is that he has no patience for anything he considers “silliness,” which he usually seems to find self-explanatory. (Also not great for a guy writing to explain economics to the masses.) He makes many excellent points and well-supported arguments in these essays—I even agree with some of his opinions—but a lot of that gets lost under his attitude. And sometimes he’s wrong, because he’s taken economic models and data and written a bunch of opinion pieces. (Man, the article on how technology isn’t as amazing as everyone thinks is so confident. Hilarious how he thinks having no microwave in his kitchen is a convincing argument for why he’s an expert on tech not being very useful. That’s just evidence that you personally don’t use it to its potential, dude.) He isn’t arrogant, but he can be insufferable.
He dips into politics here and there, which is understandable due to the importance of economics on that stage (though somewhat risky when it comes to alienating the audience). This has some fascinating statements in it, because some of his thought and others’ he cites can be traced forward to the present without much difficulty. That’s pretty cool and one thing I enjoy about reading older books that discuss then-current political events.
There are some interesting ideas in here, and the short little essays are appealingly bite-sized, but there the pop science success stops. The entries are poorly written for that purpose, probably because that wasn’t their purpose when they were written. “I want to explain economics in plain English,” Krugman says, and then he fails, because this book is a collection of economics column articles from 1995-1997 and not actually written for people who don’t already know some of it. “Economics has no Carl Sagan,” Krugman laments, and it still doesn’t, because that person sure isn’t him.
October 26, 2022
Despite being written 25 years ago the pieces here are still relevant - partly because the concepts are about the theory behind events, but also because I read this at a time when supply-side economics was the strategy pursued by a doomed prime minister and that view was eviscerated here.
The real draw is Krugman's writing, which is snappy, sharp and entertaining. Sometimes he picks on easy targets but at least there are prominent named ones, rather than just caricatures made up to be mocked. These are writings about economics rather than lessons about them but a fairly basic understanding would be enough to appreciate it, and the essays are all on the popular end of the spectrum. The experience is akin to reading colour pieces on sport - entertaining, but a commentary on events rather than an account of them.
I'm still not sure why I picked this up, being unfamiliar with Krugman, but in short bursts these were good pieces and they weren't too taxing either, but there isn't enough of a thread to make it a cover to cover read and it's also quite short.
The real draw is Krugman's writing, which is snappy, sharp and entertaining. Sometimes he picks on easy targets but at least there are prominent named ones, rather than just caricatures made up to be mocked. These are writings about economics rather than lessons about them but a fairly basic understanding would be enough to appreciate it, and the essays are all on the popular end of the spectrum. The experience is akin to reading colour pieces on sport - entertaining, but a commentary on events rather than an account of them.
I'm still not sure why I picked this up, being unfamiliar with Krugman, but in short bursts these were good pieces and they weren't too taxing either, but there isn't enough of a thread to make it a cover to cover read and it's also quite short.
January 28, 2021
Krugman’s ability to tackle famous - and often misunderstood - micro- and macroeconomic theories in a simplified but interrogative way makes this book an interesting, informative read for anyone who wishes to increase their understanding of economics.
Though some of the points raised don’t hold up as well anymore (particularly those on environmental degradation), this is the mostly a result of the book being 25 years old and therefore no longer particularly relevant in the current political climate rather than the standard of the writing.
A recommended read for anyone who has a basic grasp of economics but is looking to learn more about the fundamentals.
Though some of the points raised don’t hold up as well anymore (particularly those on environmental degradation), this is the mostly a result of the book being 25 years old and therefore no longer particularly relevant in the current political climate rather than the standard of the writing.
A recommended read for anyone who has a basic grasp of economics but is looking to learn more about the fundamentals.
January 27, 2018
There is the very real danger of reading a 20-year-old book of popular economics essays, declaring oneself an expert and becoming a cocktail party bore, which I am resisting.
Krugman is still making many of the same points (trickle-down even more thoroughly discredited) but the one more academic concept that seems like one ought to know about is NAIRU (non-accelerating inflation rate of unemployment) which suggests to me that a magic wand that would double the national economic growth rate or banish unemployment, or both, might have undesirable consequences.
Krugman is still making many of the same points (trickle-down even more thoroughly discredited) but the one more academic concept that seems like one ought to know about is NAIRU (non-accelerating inflation rate of unemployment) which suggests to me that a magic wand that would double the national economic growth rate or banish unemployment, or both, might have undesirable consequences.
January 19, 2022
Enjoyable, quick read. Comprised of columns from the mid 90s, appearing primarily in Slate. There are hints of his invective style that define his writing today, but the writing is mostly analytical and thoughtful. Some of the material is certainly dated and a reflection of events 25 years ago, but conceptual basis for the columns are quite relevant to today: I) technological pessimism, ii) ways of looking at the impact of trade on employment; iii) exchange rate policy and so on. I found “Pop Internationalism” a more enjoyable set of essays, but this is worth the time, as well.
March 23, 2019
Pros
-Good collection of articles
-Very relevant even today
Cons
-While the essays were individually profounding, I felt a disconnect between topics
-You need to understand a bit of the us economics world else you would be scouring for more explanation online like me!
Pro tip-
Most of these individual work are online and can be read free of cost :D
-Good collection of articles
-Very relevant even today
Cons
-While the essays were individually profounding, I felt a disconnect between topics
-You need to understand a bit of the us economics world else you would be scouring for more explanation online like me!
Pro tip-
Most of these individual work are online and can be read free of cost :D
October 5, 2018
Krugman argument is simple, in the economy, the most important part are:
- Employment
- Ideology is useless (right vs wrong, is political)
- Globalization
- Ilusion of growth
- Global (financial) market
- Market is complicated
- Employment
- Ideology is useless (right vs wrong, is political)
- Globalization
- Ilusion of growth
- Global (financial) market
- Market is complicated
February 28, 2024
A collection of essays about both the late 1990s and a polemic against how the political class generalises through ideology economics. A valuable read for anyone interesting in being able, as a voter, to pass the bs sniff test when scrutinising political spin.
July 29, 2018
Excelente
May 17, 2019
Very dated
March 13, 2020
It looks like Prof. Paul Krugman may certainly be interested in reading of Business Cycles in Economics book by Viktor O. Ledenyov and Dimitri O. Ledenyov!!!
July 9, 2022
Some good essays, but mostly just rambling. Very dated too
December 11, 2022
Great reading for every concerned person.
February 3, 2023
baby's first macroeconomics
actually 3.5/5 because the last essay was quite good
actually 3.5/5 because the last essay was quite good
December 14, 2022
I'm one of those supply side guys Krugman loves to hate. Yet, I rather enjoy Krugman. He's smart, annoying as myself, and reading him makes one think. I see in the reviews even a lot of his fans rated this book harshly. Largely because it is said to be dated. How are you ever going to read Smith or Ricardo if you think Krugman in 1997 is dated? If you're going to read about economics you have to add Krugman to your list. This one is short and a fun read, a look into opinion and news of the day (late 1990s.)
Let me just comment on one essay, Technology's Wonders: Not So Wondrous. His critics like to laugh at him for minimizing the internet on changing our lives and economics. This is especially true of young people who are growing up now (2020s.) Krugman has a Nobel Prize in economics, he is not stupid. What was his point? He's extensively written on this topic. In this chapter he pointed out that life changed more from 1917 to 1957 than from 1957 to 1997. Ok, was this point valid? We're still putting gas in our cars, we're still paying people to babysit our kids, we're still plugging our devices into outlets in our homes that haven't changed, we're not paying robots to be plumbers in our homes. An interesting discussion, not sure how much I agree. I would now argue that life has changed more from 1997 to present (2022), than from 1917 to 1997. MOST of this change happening in the poor world where we've lifted billions out of extreme poverty. These books have been written by others. But Krugman was writing in 1997 and no reason to laugh at his point being made at that time.
Let me just comment on one essay, Technology's Wonders: Not So Wondrous. His critics like to laugh at him for minimizing the internet on changing our lives and economics. This is especially true of young people who are growing up now (2020s.) Krugman has a Nobel Prize in economics, he is not stupid. What was his point? He's extensively written on this topic. In this chapter he pointed out that life changed more from 1917 to 1957 than from 1957 to 1997. Ok, was this point valid? We're still putting gas in our cars, we're still paying people to babysit our kids, we're still plugging our devices into outlets in our homes that haven't changed, we're not paying robots to be plumbers in our homes. An interesting discussion, not sure how much I agree. I would now argue that life has changed more from 1997 to present (2022), than from 1917 to 1997. MOST of this change happening in the poor world where we've lifted billions out of extreme poverty. These books have been written by others. But Krugman was writing in 1997 and no reason to laugh at his point being made at that time.
May 31, 2010
I've been reading Krugman on NYT for a whole now, amd I don't remember when I heard about this book, which is mostly a collection of OpEds he wrote for Slate in the 90s.
Because the audience for most of the pieces in this book were news readers, the book sometimes felt a bit out-of-date, and in that regard a reader today will have to appreciate it as a piece of history.
Having said that, Krugman still imbibes everything he writes about with a healthy dose of economic theory, which I greatly benefitted learning from. His nuggets of economic insight were what kept me reading, highlighting, and bookmarking, amd why I will probably return to select passages at a later date.
I have a pretty firm understanding ofneconomics, having taken about 12 hours of it over the course of my 158 hours of undergraduate classwork, but I still find myself benefitting greatly from hearing the stories told again from a different angle.
Because the audience for most of the pieces in this book were news readers, the book sometimes felt a bit out-of-date, and in that regard a reader today will have to appreciate it as a piece of history.
Having said that, Krugman still imbibes everything he writes about with a healthy dose of economic theory, which I greatly benefitted learning from. His nuggets of economic insight were what kept me reading, highlighting, and bookmarking, amd why I will probably return to select passages at a later date.
I have a pretty firm understanding ofneconomics, having taken about 12 hours of it over the course of my 158 hours of undergraduate classwork, but I still find myself benefitting greatly from hearing the stories told again from a different angle.
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