Earlier today, Paul Krugman, Princeton economist, newspaper columnist and all round scourge of the Bush administration, won the Nobel Prize in Economics (a.k.a. The Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel). While Krugman won the award for his work in trade theory, he casts a shadow far outside academia. So perhaps some attempt to gauge Krugman’s larger achievement might be in order (I’ll leave the task of explicating Krugman’s theoretical work to those who are technically equipped to do so, as I am not).
Because he’s a progressive, Krugman is often compared to John Maynard Keynes or John Kenneth Galbraith. These are fair enough comparisons but I think its more interesting to see what he has in common with a major ideological foe, Milton Friedman, who won the Nobel Prize in Economics in 1977.
Perhaps the best way to quickly sum up Krugman is to say that he’s the progressive Milton Friedman. The remarkable thing about Friedman, whatever you might want to say about his politics, was that he was a great economist, a great teacher and a great journalist. Despite his formidable achievements as a technical economist, Friedman didn’t shy away from the nitty-gritty of politics and constantly tried to express his ideas as clearly as possible through newspaper and magazine columns as well as books. Free to Choose, a TV series Friedman and his wife Rose did in the 1970s, had a wide influence in shaping public opinion. It’s this combination of technical expertise and a forceful public presence that made Friedman such a potent political force. Yet it has to be said that Friedman’s political allegiances (which ranged from Pinochet to Goldwater to Nixon to Reagan) were fairly repugnant.
While Friedman was fairly doctrinaire all his life (refusing, for example, to recognize the ways in which monetarist doctrine was discredited when put to the test in the 1980s), Krugman has always had a more flexible and pragmatic approach to economics. While he started off as a full board free trader, when faced with new evidence Krugman has acknowledged that trade is increasing inequality in rich countries, and that this intensifying inequality is a political problem. In grappling with the issue of inequality, Krugman has made economic theory politically relevant in a new way. Equally important politically has been his prescient observations on the credit crisis and the housing bubble.
Friedman never worked in isolation but was nurtured by an intellectual infrastructure, one which he helped sustain. He was at the forefront of the Chicago School of Economics and had many links to right-wing think tanks. Krugman too has been good at channeling his ideas through intellectual networks, particularly among liberal bloggers and the emerging progressive think tank culture in Washington.
Krugman is the progressive Milton Friedman, a Milton Friedman who uses his talents to articulate a politics that is good for everyone and not just the economic elite.
For more on Krugman, see the comments by Ezra Klein (who also wrote this) and Alex Tabarrok and Edward Glaeser. And Kathy G. has a fun contest to find the “single most ungracious thing a wingnut has to say about Krugman’s winning the Nobel” and the “most ludicrous conspiracy theory that attempts to explain the real reason why he won it.”