Friday, December 6, 2002

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Krugman's world

Earlier in the week, I promised a sociological exegesis of Paul Krugman. Here it is. [Full disclosure: Krugman was the outside chair of my Ph.D. dissertation at Stanford, and he’s thanked for it in my book. “Outside chair” sounds impressive, but what it basically means is that he was there to keep the process intellectually honest. We interacted for a grand total of three hours. He did pass me, for which I am certainly grateful.]

Paul Krugman should have felt good about himself this Thanksgiving. Editor & Publisher named him as one of four Features of the Year. Nicholas Confessore heaps a great deal of praise on Krugman in an a fair and balanced Washington Monthly piece. Plus, he has great luck in bringing out the rabid nature of his enemies – see Brad DeLong’s witheringly accurate takedown of Dan Mitchell’s uninformed caricature of Krugman as a “doctrinaire, left-wing, big-government type.”

That said, there’s a palpable sense that since Krugman started his New York Times op-ed column, the ratio of shrillness to insight has been increasing (Click here and here….). Implicit in Confessore’s story is that his current columns pale in comparison to his sparkling mid-1990’s essays for Slate and Foreign Affairs. Krugman admits that, “I'd like to make a big difference, but I'm not sure I have much of a chance of doing that.” Why does Krugman seem less influential now even though his megaphone is larger? Here’s my two-part answer, employing as much economic logic as I can muster:

Quality is a function of quantity. For some production processes, as output increases, the quality of each additional unit of output declines. Krugman is writing more now, but the quality has deteriorated. His earlier work was longer, more polished, and closer to his area of expertise – international economics. As he needs to generate more and more output for his Times column, he resorts to two strategies that drastically lower quality. First, he repeats himself ad nauseum. As Strunk and White point out, sometimes a little repetition is good to hammer home the point – this is what Mickey Kaus would call “flooding the zone.” After a while, however, diminishing marginal returns kick in. The benefit of each repetition shrinks, while the cost – in this case, to Krugman’s reputation – increases. Even Krugman’s admirers acknowledge this problem. Second, he branches away from his area of expertise to other topics of the day. Since his capital stock of knowledge in these areas is smaller, the product is less impressive.

On politics, he’s not moving down the learning curve. Krugman, along with many economists, has some serious blind spots in his political analyses. He’s consistently shocked when politicians engage in strategic or opportunistic behavior. He’s always stunned when leaders take actions that maximize their own power rather than benefiting the greater good. He’s flummoxed by the idea that nation-states might care about their relative economic power. These are all rational motivations – they’re just not ones that economists really consider when they do their own work. [Isn’t this a really cynical view of the world?—ed. Not necessarily. Politicians can desire power in the short run so as to pursue their desired ends in the long run. The logic of Bush's National Security Strategy is to prevent other great powers from rising in order to ensure the long-term growth of freedom, democracy and prosperity. For a great example of this kind of behavior in the domestic arena, check out John Barry’s The Ambition and the Power.]

Economists that focus on politics eventually begin to acknowledge these sorts of motivations. Krugman, however, seems perpetually befuddled when politicians act politically. Since his readers trend in the politically savvy direction, this failure to learn has become an ever-increasing handicap.

There’s more to say, but sociological exegeses are exhausting, and unlike Krugman, I’m not getting paid for penning these thoughts. So I’ll end with a plea for Krugman to switch papers from the New York Times to the Washington Post. I suggest this because the Post has op-ed columnists that write bimonthly or monthly. Krugman is the rare economist that can write well, and as such he has a duty to contribute to public discourse. His effect on that discourse would be more positive if he contributed less frequently.

UPDATE: Brad Delong has a post that links together my musings on Krugman and O'Neill.

CLARIFICATION: Much obliged to Mickey Kaus for the link. To clarify, I am not a student of Krugman's -- my Ph.D. is in political science, not economics. Here's Krugman's clarification (though, to be fair, Mickey said Krugman was "an" advisor, not "the" advisor). And click here for another Krugman assessment.

posted by Dan on 12.06.02 at 12:21 PM