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Krugman disses Hayek as “being almost entirely about politics rather than economics”

That’s ok, Krugman earlier slammed Galbraith. (I wonder if Krugman is as big a fan of “tough choices” now as he was in 1996.) Given Krugman’s politicization in recent years, I’m surprised he’s so dismissive of the political (rather than technical-economic) nature of Hayek’s influence. (I don’t know if he’s changed his views on Galbraith in recent years.)

P.S. Greg Mankiw, in contrast, labels Galbraith and Hayek as “two of the great economists of the 20th century” and writes, “even though their most famous works were written many decades ago, they are still well worth reading today.”

23 Comments

  1. Steve Sailer says:

    Here’s Krugman’s excellent 1994 slam on Stephen Jay Gould as the John Kenneth Galbraith of evolutionary theory:

    http://www.mit.edu/~krugman/evolute.html

    • Andrew says:

      All I can say is—I just was reading The Affluent Society and I thought it had a lot of great stuff. Not just quippy lines but real insights that seem valid today. I’m not saying the dude was perfect but he seemed to have a lot to offer. Just cos he didn’t do what Krugman wants to call “economics,” doesn’t mean he was a lightweight.

      • Steve Sailer says:

        Agreed, it’s unfair to rank Galbraith with Gould. Galbraith was a superb prose stylist and had lots of good ideas — e.g., how the size of “the bezzle” builds up during a boom until a recession catches the corruption that the auditors didn’t. Gould was a sonorous prose stylist, but his long term reputation is likely to be much worse. Galbraith lacked Gould’s malignant streak, which led him to libel better scientists than himself. Gould’s reputation has been in freefall since his death.

        • Ben E says:

          As an aside, Krugman’s characterization of evolutionary biology in the light of population genetics (through the trio of Williams-Hamilton-Smith) leaves a bit to be to desired. He’s right to link that field to equilibrium and maximization approaches, but it’s not the approach of a lot of other parts of the broader science (not that they are controversial on the more pernicious level of Gould).

  2. Sebastian says:

    I think Krugman has come around a bit on some of the “heterodox” people – he’s said this most clearly about Minsky (who also apparently wasn’t very good at math), but I’ve also seen him write nice (or at least nicer) things about the Galbraiths.

    I think the disdain for non-mathematical economists in general was more pronounced in 1990s Krugman than it is in 2011 Krugman.
    Krugman’s point about Hayek also needs to be seen in context: Not least bc of the Hayek-Keynes rap videos the idea that macroeconomics (as a subject) really is this show-down between Keynes and Hayek has become wide-spread among people who know little about academic economics. And of course Krugman is right on that count – if you look at what is published and taught in macro economics, Austrian business cycle theory does not play any role.
    Friedman would have been a much better counterpart to Keynes if people were trying to capture academic debates – but Friedman, of course, would likely have agreed with many of the crisis policies that Keynesians advocate – especially with Krugman’s more recent focus on central banks.

  3. Mark Palko says:

    Assuming we’re both talking about http://krugman.blogs.nytimes.com/2011/12/05/things-that-never-happened-in-the-history-of-macroeconomics/ I’m not sure that I see “he’s so dismissive of Hayek’s political influence.” Krugman seems to be solely focused on arguing Hayek’s perceived economic influence is the product of his political influence. Wouldn’t this imply that the political influence was considerable?

    • Andrew says:

      Mark:

      What I meant was that Krugman was dismissive of Hayek as having an influence that was political rather than economic. I rephrased to clarify.

  4. Jack says:

    If you look them up in Jstor, you can see that J.K. Galbraith only published invited papers (with a couple of early exceptions). He has had no influence to speak of on the discipline of economics. However, he was a very influential policy economist and indeed a President of the AEA. Moreover, through his writing he brought economic policy to the everyman’s dinner table conversation.

    Hayek in contrast did publish many peer-reviewed economics (and law) articles, and earned a Nobel prize (though Krugman may be right that Hayek’s papers were written in a style that would not get published today, being perhaps too close to political science). The fact that he is a hero of the Tea Party and that some of his statements have likely been misrepresented or exaggerated by certain groups does not take away from his significant contributions to economics, the discipline.

    Mankiw is right: read ‘em both.

  5. numeric says:

    Krugman has the advantage of being the most essentially correct economist of the Great Recession (at least of those economists who are prominent–I’m certain there are a few who are less-known but even more correct). He has also shown that academic economics is not only moribund but positively harmful. It will be interesting to see if a Krugman appears in political science (a theory such as “broken windows” consigning a generation of African-American youth to prison) or statistics (large-scale computational models which provide erroneous results when typically applied as a cookbook). My guess is not–Krugman’s prominence comes primarily when talking about politics (throughout the Bush years), and the attention this criticism gave him allowed him to command the stage when the problem turned from politics to economics.

  6. MAYO says:

    oh give me a break Krugman, one would be hard pressed to find a more politicized econ writer pretending to be otherwise…(this is quite aside from the points about Hayek—but Krugman has become among the worst offenders (didn’t used to be)…and he always, always claims that, whatever happens, it’s just what he predicted….(in a bad mood)

    • Corey says:

      “always, always… just what he predicted” is a bit of an overstatement. (Not much of one, I grant you, but it’s important to be fair.) For example:

      “To be fair, while the inflationistas have been totally wrong, deflationistas like me haven’t been completely right… So I thought we might well be into deflation by this point… some predictions from people like me have proved somewhat wrong.” http://krugman.blogs.nytimes.com/2011/11/17/subsiding-inflation/

  7. A. Zarkov says:

    By his own admission, Krugman is not a macroeconomist. He received the Bank of Sweden Prize (erroneously called a “Nobel Prize” by the press) for his work on international trade. Yet he pontificates ad nauseam on macroeconomic matters insisting the failed stimulus packages weren’t big enough. He assumes the Keynesian multiplier must be larger than one (let alone positive) ignoring the work of actual macroeconomists like Robert Barro, John Taylor and Valerie Ramey who he seems to regard as stupid for not agreeing with him. Not content with insulting the living, Krugman must now malign the dead. Hayek’s business cycle theory is certainly a respectable competitor to Keynes’s General Theory as discussed by Mario Rizzo. Economics, especially the macro part, is hardly a settled science and most likely never will be. It’s much more like an inexact social science than physics. Krugman was once a respectable scholar; now it’s become painful to watch someone destroy himself having become the enfant terrible of economic commentary.

    • Ja says:

      Zarkov: Krugman may not be a self-styled ‘macro specialist’, but he certainly knows the field because his early work was in the economics of exchange rates, and, besides, if international trade does not fall within macroeconomics, then what is it, micro?
      Barro and Taylor and Fama say many things, and we shouldn’t always take statements at face value but think about them. Valerie Ramey’s work, on a quick scan, says that “I will conclude that the U.S. aggregate multiplier for a temporary, deficit- financed increase in government purchases (that enter separately in the utility function and have no direct effect on private sector production functions) is probably between 0.8 and 1.5. Reasonable people can argue, however, that the data do not reject 0.5 or 2.”, so I don’t know how a statement like this can reject a null hypothesis of a multiplier larger than 1, unless 2 is also less than one.

      Mankiw is definitely right on Hayek, but only focuses on his ideas on advertising and the Road to Serfdom, which, in my view, is a product of its time. Hayek, like Keynes, had complex ideas and point of views and it is probably unwise to call his ideas ‘Austrian’ any more than Keynes’s are `Keynesian’. Some of his books are notoriously difficult to read, but contain many insights, and the perceived lack of academic influence is due to the fact that after the war he went off the mainstream and also pursued other interests. The Pure Theory of Capital should have had a sequel, and some simplification and formalization: it didn’t.

      He should definitely be read. In my view, his most important book is The Sensory Order.

      • A. Zarkov says:

        Ja,

        Macro is the whole economy. International trade is micro. For example look at the Table of Contents of John Bouman’s online book, and you will see international trade as the last chapter (Unit 10).

        Barro estimates the multiplier at 0.6 to 0.7 at the median unemployment rate and reaches 1.0 with 12% unemployment. Ramey says, “Multipliers for temporary increases in government spending financed with deficits (to be paid with future lump-sum taxes) are somewhat higher, but are still substantially below unity. That 0.8 to 1.5 from Ramey is her summary of the field, not her calculation. See Table 1 in her article. Obviously the value of the multiplier is not settled among economists. But you wouldn’t know that from reading Krugman who keeps on dogmatically insisting we need to spend more and increase deficits.

      • Wonks Anonymous says:

        Fama is known for his work on finance/asset prices, but I don’t think he’s much of a macro guy. Which is presumably why Zarkov didn’t mention him.

  8. Barry Ickes says:

    Thank you for reminding me how well Krugman used to write about economics. That was a great review.

  9. PatrickT says:

    Krugman’s right, and Mankiw knows it. But Mankiw’s just trying to appear to be a nice guy at all costs. I have been reading both on a daily basis over the last decade or so and it’s become quite clear that Krugman says it as it is while Mankiw can’t bear to make enemies.

    And let’s saying for crying out loud: Galbraith was a nice bloke and his books are a good read, but none of it is path-breaking.

    And if all Krugman had written were his Conscience of a Liberal, Accidental Theorist, etc.., likewise Krugman would be no-one.

    Krugman’s a big and respected name because of his fundamental research. I’m not aware of any by Galbraith.

    As for Hayek, it’s true that he would not be receiving so many accolades were it not for his politics. I think the same can be said of Joan Robinson: much is made of her imperfect competition models, but let’s face it, today it’s Chamberlain, Dixit, Stiglitz, etc. not Robinson: Robinson is a big name because of her left-wing views.

    • Andrew says:

      Patrick:

      I found The Affluent Society to be full of interesting ideas. Galbraith may indeed not be one of the greats of economic theory but there are other ways of making an intellectual contribution. It looked to me that Galbraith was doing more than merely popularizing existing theories and providing a good read; he had an innovative way of looking at the intersection between economic ideas, policies, and their reception among elites and the general public. Perhaps Galbraith’s path-breakingness could be characterized as sociology rather than economics; in any case, it struck me as interesting and important. Maybe Mankiw has a similar view.

  10. PatrickT says:

    And let me add one more thing, bordering on the controversial:

    Keynes without Hicks (and others) would not be half of what Keynes is today.

    Keynes wrote in a non-mathematical language about things he had visualized (more or less deeply) mathematically, and so his work would be mathematized by his students, friends, colleagues, gurus. But Hayek’s thinking does not have the mathematics behind it, it is not of the same scientific value (Karl Popper, etc.).

    This applies to others, like Adam Smith or Schumpeter, they did not always write down equations, but they were there to be unearthed, hence the impact, the scientific value. And while Hayek may have been a great bloke, a very dignified gentleman, a lovely grandfather or whatever, I don’t see the models spring to mind as I read him (and, let’s be honest, try not to fall asleep).

  11. Gabe says:

    you shouldn’t really be surprised at how dismissive Krugman is about Hayek’s politicization. Krugman views himself as above the fray, completely objective, and completely and utterly correct in all circumstances. If you told Krugman to his face that he was even slightly political in his views and writing, he would either dismiss you outright, or do what he does to the rest of his critics (regardless of the validity of their criticisms): shout you down and then scorn you.

    • Eli Rabett says:

      More likely Krugman would reply that while he is political he tries to bound his politics with reality, and tests ideas against his knowledge of economics.

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