Another Profile of Krugman- From Asimov to Keynes

Last August, Krugman decided that before he and Wells departed for a bicycle tour of Scotland he would take a couple of days to speak at the sixty-seventh world science-fiction convention, to be held in Montreal. (Krugman has been a science-fiction fan since he was a boy.) At the convention, there was a lot of extremely long hair, a lot of blue hair, and a lot of capes. There was a woman dressed as a cat, there was a woman with a green brain attached to her head with wire, there was a person in a green face mask, there was a young woman spinning wool. There was a Jedi and a Storm Trooper. Those participants who were not dressed as cats were wearing T-shirts with something written on them: “I don’t understand—and I’m a rocket scientist,” “I see dead pixels,” “Math is delicious.” Krugman has always had a nerdy obsession with puns. (He is very proud of a line in one of his textbooks: “Efforts to negotiate a resolution to Europe’s banana split had proved fruitless.”) He also likes costumes. Once, he and Wells gave a Halloween party where the theme was economics topics—two guests came as Asian tigers, several came as hedge funds, one woman came as capital, dressed as a column. Sitting up onstage at the science-fiction convention, Krugman looked happy to be there. It seemed that these were, in some worrying sense, his people.

“Hi, everyone!” he called out.

“Hi!” everyone called back.

Krugman explained that he’d become an economist because of science fiction. When he was a boy, he’d read Isaac Asimov’s “Foundation” trilogy and become obsessed with the central character, Hari Seldon. Seldon was a “psychohistorian”—a scientist with such a precise understanding of the mechanics of society that he could predict the course of events thousands of years into the future and save mankind from centuries of barbarism. He couldn’t predict individual behavior—that was too hard—but it didn’t matter, because history was determined not by individuals but by laws and hidden forces. “If you read other genres of fiction, you can learn about the way people are and the way society is,” Krugman said to the audience, “but you don’t get very much thinking about why are things the way they are, or what might make them different. What would happen if ?”

Econ Podcast of the Day

Phelps on Unemployment and the State of Macroeconomics;

Samuelson's project to correct, clarify and broaden the theory brought into focus its strengths; but also its limitations: It abstracted from the distinctive character of the modern economy--the endemic uncertainty, ambiguity, diversity of beliefs, specialization of knowledge and problem solving. As a result it could not capture, or endogenize, the observable phenomena that are endemic to the modern economy--innovation, waves of rapid growth, big swings in business activity, disequilibria, intense employee engagement and workers' intellectual development. The best and brightest of the neoclassicals saw these defects but lacked a micro-theory to address them.

Sex, Lies and Economists

Sounds like an interesting book project;

A short chapter will cover Bernard Mandeville, author of "An Essay upon Whoring: A Modest Defence of Publick Stews," which made the case for state-run brothels. He congratulated the city fathers of Amsterdam for tolerating "Houses in which Women are hired as publickly as Horses at a Livery Stable." Mandeville's simultaneous celebration of both free markets and licentious behavior posed a problem for Adam Smith's generation, which had to find a way to respond to Mandeville in making their case for markets on ethical grounds. Mandeville reappears centuries later in Keynes' General Theory, in making his case for the need to stimulate demand.