Monday, October 13, 2008

the new dollar and the nobel in economics

This picture, the new dollar, has nothing to do with the rest of this post.

Paul Krugman won the Nobel Prize in economics today. His work in the 1980's was deserving of it. However, it had nothing to do with his New York Times column or other opinion pieces.

What are the effects of free trade and globalization? What are the driving forces behind worldwide urbanization? Paul Krugman has formulated a new theory to answer these questions," the academy said in its citation. "He has thereby integrated the previously disparate research fields of international trade and economic geography,
~ The Royal Swedish Academy of Sciences

Many are surprised that he got the Nobel because his more recent opinion pieces are so political, so shrill, that he has lost all pretense of objectivity. Fifteen years ago he was very good at making economics understandable to as to debunk a lot of bad policy proposals, but has since lost credibility. Unfortunately the Nobel Prize will likely give his political opinions more credibility even when his writing goes beyond international trade.

Since both Krugman (a bit of a political hack of late) and the Nobel committee favor Obama, this prize may be questioned. However, even if politically motivated, that doesn't mean it is an undeserved choice.

I found this on a conservative/libertarian blog today:

...Paul Krugman's win is, as the Germans say, nicht ein Unrecht - not an injustice. Yes, he's often screamed himself silly, but the best fifth of Krugman's corpus is excellent. As I guest blogged on MR [Marginal Revolution] years ago:

[A]s a cock-eyed optimist, I'm very happy to have him around. Think about it: The world's most famous left-wing economist:

1. Blames European unemployment on labor market regulations that hold wages above the market-clearing level. (The Accidental Theorist, Part 1)

2. Publicly and articulately advocates free trade without hemming or hawing. (Pop Internationalism)

3. Identifies anti-globalization activists as the enemies of the world's poor. (The Accidental Theorist, Part 3)

4. Titles an essay "In Praise of Cheap Labor: Bad Jobs at Bad Wages Are Better than No Jobs at All" (The Accidental Theorist, Part 3)

5. Points out that if you oppose Big Government, you should favor cutting Social Security, Medicare, and other popular programs. ("The Lost Fig Leaf") Sure, he's hoping to scare us away from libertarian rhetoric, but there's no use running away from the truth.

Prediction: When Obama wins, Krugman will quickly drop his partisan hackery. He's unfair to his enemies, but he does not suffer fools gladly. And it's safe to say that a year into Obama's presidency, there will be plenty of folly for Krugman to decry.

~ Bryan Caplan

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