Paul Krugman Wins the Nobel Prize in Economics

Via The New York Times:

American economist Paul Krugman won the 2008 Nobel prize for economics for bringing together analysis of trade patterns and where economic activity takes place, the prize committee said on Monday.

The Royal Swedish Academy of Sciences said the prestigious 10 million crown ($1.4 million) prize recognised Krugman's formulation of a new theory to answer questions driving world-wide urbanisation.

"He has thereby integrated the previously disparate research fields of international trade and economic geography," the committee said in its statement.

Rest here. reason Contributing Editor David Henderson on Krugman's The Return of Depression Economics here. Contributing Editor Mike Lynch on why "Krugman may be a smart economist, but he's a stupid columnist" here.

Comments

[emac]

This is just beyond belief. FA Hayek is the probably only Nobel winner in economics who ever truly deserved it. But Paul Krugman? Krugman???

I truly fear for the future of our world. Perhaps the coming 10-20 year Depression will knock some economic sense into the coming generation of leaders, but I doubt it. We still believe FDR and the New Deal 'cured' the last one. That was 75 years ago. The world will be just as stupid in another 75 years.

[JLM]

I'm no economist, so I have no idea if the work that he won this for is actually deserving of it, but it seems to me that this is probably a political choice. Isn't Krugman about the most prominant Keynesian-ish economist out there?

[Kyle Jordan]

emac, I agree with you. Thanks for starting off my week on a depressing note...

[Hibiscus Monkey]

The Nobel Prize is academic, not political. Krugman's influence over the field cannot really be disputed.

"FA Hayek is the probably only Nobel winner in economics who ever truly deserved it."

Care to back this claim up?

[Fluffy]

Judging from the Bloomberg summary of the work in question, apparently he won for work showing that industrial subsidies generally deliver anemic returns to the states that engage in them.

So while Krugman may be a liberal, it doesn't sound to me like he's winning for being a liberal.

[Taktix®]

I suppose Naomi Klein is up for the Nobel prize in literature this year, eh?

[Mad Max]

I have no doubt he did some good work and is influential in his field. It is possible, however, that his contributions to the field of Bush-ology also helped get him a prize from the Nobelites.

[Gilbert Martin]

"The Nobel Prize is academic, not political"

What a funny way to start the week!

[Episiarch]

So while Krugman may be a liberal, it doesn't sound to me like he's winning for being a liberal.

Given the history of Nobel awards, one is suspicious at all times. As soon as something like this goes political at all, it is tainted forever.

[A Bold Fresh Piece of Human Ex]

Krugman? You've got to be kidding me! He is not one of the folks!

Fuck it! Cut his mike!

I'm naming names! Starting now. I'm looking at you, Barney Frank!

Where is fucking Peabody now, pinheads?

[madmikefisk]

The official release from the Nobel committee was referring to Krugman's work on the field of economic geography and international trade. Relatively inoffensive stuff on balance, although not normally what I would consider Nobel material (especially considering most of his work on economic geography cited came from two articles).

[The Angry Optimist]

FA Hayek is the probably only Nobel winner in economics who ever truly deserved it.

Ignorant statement of the day.

Robert Merton, James Buchanan and Kenneth Arrow are all deserving winners I can name off of the top of my head.

I'm pretty sure Samuelson won, too.

The only individuals bitching about this are people who know nothing about higher economics.

[thedifferentphil]

Ditto what the Angy Optimist said. And Madmikefisk, others have won the Nobel on the back of many, many fewer articles than Krugman.

[tarran]

Couple of things to keep in mind:
1) The Nobel Prize is not one of the ones that Alfred Nobel commissioned. Rather it is one given out by the Swedish Central Bank in memory of Alfred Nobel.

2) The Swedish Central bank tends to give it to guys who help central banks do their job "better". In other words, raging statists who believe that some governing authority can manage the economy.

I don't think anybody has ever won the prize for advocacy of free markets. Milton Friedman, for example, won it for his monetary theories, which advocate a central bank managing the money supply, for example.

Hayek is the only possible exception, but he had to share with some Marxist economist (kind of like a flat earth cosmologist) who argued something diametrically opposed to what Hayek argued.

[godwinator]

This is like Hitler winning the Peace Prize.

[The Angry Optimist]

In other words, raging statists who believe that some governing authority can manage the economy.

Again, not correct. Hicks and Arrow won for adding a lot to very basic theories. Welfare economics and general equilibrium have nothing to do with "statism".

[joe]

As expected, this thread is full of people who know nothing about Pall Krugman beyond his political leanings accusing the Swedish Nobel committee of letting politics influence their opinion about the merits of Krugman's academic work.

The only surprise is how many people there are calling them on it.

[emac]

The Nobel Prize is academic, not political.

This is a joke, right? This has got to be a joke, right??

Krugman's influence over the field cannot really be disputed.

Neither could Schwarzenegger's influence over Hollywood, but I don't think he deserved any Oscars.

Care to back this claim up? (about Hayek)

Read this, and see if it clears anything up for you.

Hayek's 1974 Nobel Lecture

[madmikefisk]

others have won the Nobel on the back of many, many fewer articles than Krugman.

What scares me is I know you're right.

Reading the AP writeup on the award, and one of the people on the selection committee seemed to reference Krugman's role as opinion maker as much as an economic scientist, but then also added that Krugman is no supporter of protectionism. Kinda disjointed, but okay.

Bottom line is it's a puzzling pick, but, considering the mood of the international economic community, they could have done far, far worse than picking Krugman on the grounds for which they did.

[Isaac Bartram]

tarran

Although it is true that the economics prize is not one of the original Nobels and is not funded from Nobel's fortune like the others, its winners are selected by the same committe that selects the winners of the Prizes in Chemistry and Physics.

While the Peace and Literature prizes have had a hint of politicization from time to time the Science committe has avoided it.

Whatever one thinks of Krugman's politics his selection appears to be based on his scholarship on International Trade. Which I understand from people who I believe know something about it is pretty good.

[madmikefisk]

As expected, this thread is full of people who know nothing about Pall Krugman beyond his political leanings accusing the Swedish Nobel committee of letting politics influence their opinion about the merits of Krugman's academic work.

Holy crap, I'm agreeing with joe on something. (Still think they could have made a better pick than Krugman, but they could've done much, much worse)

[The Angry Optimist]

Read this, and see if it clears anything up for you.

In case you didn't realize, linking to his lecture is not sufficient evidence for your assertion that "he's the only one who ever deserved it".

Again, ignorance abounds.

[P Brooks]

Krugman.

Why did it have to be Krugman?

Does this mean Kristol will get a Pulitzer?

[John C jackson]

Krugman is an economist? I thought he was just some shifty-eyed "liberal pundit."

[DDP]

Why are so many here upset about this? It's pretty much accepted that Krugman is a brilliant economist which is why he is a professor at one of the most esteemed programs in the nation. Isn't it?

[Mo]

If there was a Nobel Prize for Linguistics, Chomsky would be one of the first to win it. And the same Krugman haters would rail against that selection without knowing anything about linguistics.

Academic life and work != political life and work. Is that so hard?

[Head]

Krugman, like many other liberal economists out there, have turned into Obama licking media whores. Roubini is getting hand jobs every time he finds a group of more than 3 liberals near his offices on Washington sqaure park - which makes him pretty raw right about now. Krugman is the same. I have no idea if Krugman's work was judged in this context, or is deserving or not. Personally I think most meaningful economic works are recognized only decades after they are first published. Any sooner, and they tend to be fads. Krugman is a good economist - at least as good as any other mainstream undergrad media whore professor.

[madmikefisk]

Head: The basis for Krugman's Nobel Prize was something he wrote in 1979. So it has been a few decades, in fact.

[Head]

"Why are so many here upset about this? It's pretty much accepted that Krugman is a brilliant economist which is why he is a professor at one of the most esteemed programs in the nation. Isn't it?"

It's also pretty much accepted that Anna Kournakova is a world champion tennis player. And that Princeton has a top ten MBA program.

[Head]

madmike: touche, he's still a media whore though.

[emac]

In case you didn't realize, linking to his lecture is not sufficient evidence for your assertion that "he's the only one who ever deserved it".

So sorry I don't have enough time to write you a term paper on the subject, I have to work. If one would read the lecture, one would understand the point Hayek was making about the field of economics being unable to predict complex human action and run economies. This type of abstract mathematical modeling is usually why economists are given the Nobel (including Krugman). And for the record, I said he was "probably the only Nobel winner in economics who ever truly deserved it."

Again, ignorance abounds.

I know, it's tough being so much smarter than the rest of us, isn't it?

[Jerry]

Robert Merton, James Buchanan and Kenneth Arrow are all deserving winners I can name off of the top of my head.

Robert Merton of LTCM fame?

[Mo]

emac,

When TAO said the lecture didn't prove that Hayek was the only one to deserve it, he meant that you need to prove no one else deserved it. Are you that obtuse?

[robc]

Relatively inoffensive stuff on balance, although not normally what I would consider Nobel material (especially considering most of his work on economic geography cited came from two articles).

Einstein won in physics for the photoelectric effect. Not saying that wasnt worthy, but it isnt like it was his biggest deal.

[Head]

Jerry,

Robert Merton of Black-Scholes option pricing fame. Fischer Black was robbed.

[TallDave]

Giving "economist Krugman" his due, he was one of the very first to correctly anticipate the Japanese recession, back when conventional wisdom was they were taking over the world.

[Nixon]

We're all Keynesians now - again.

[The Angry Optimist]

And for the record, I said he was "probably the only Nobel winner in economics who ever truly deserved it."

Thanks for emphasizing your weasel words.

it's tough being so much smarter than the rest of us, isn't it?

I can't speak for "the rest". Being smarter than you hasn't proven all that cumbersome, though.

Here's the thing: econ people are more than willing to give Austrians their due. Austrian sycophants, on the other hand, go after every other school of economics.

[robc]

Head,

Was Black still alive when Merton and Scholes won?

[Zyotich]

"Krugman, like many other liberal economists out there, have turned into Obama licking media whores."--Head

Well, maybe, but I read column after column by Krugman during the Primary criticizing Obama for any number of things. Krugman has indeed become very partisan, but that's because he really does believe in Keynesian guidance of the central economy. In earlier times he would probably have been considered a moderate, but the ascendancy of Laissez Faire and Supply Side one-size-fits all economic practice has driven him to what now looks like the edge.
Agree or not, Krugman believes what he says.

[Chuck]

Hayek is the only possible exception, but he had to share with some Marxist economist (kind of like a flat earth cosmologist) who argued something diametrically opposed to what Hayek argued.

He shared it with Gunnar Myrdal, who got the prize mainly because of An American Dilemma, a seminal study of how Jim Crow affected the socioeconomic status of blacks. It's chiefly remembered today as one of the cornerstones of Brown v. Board of Education, which cites to it repeatedly when discussing the effects a segregated educational system has on the intellectual development of black children.

(Myrdal was certainly a Marxist, though; in his acceptance speech, he called for the economics Nobel to be done away with because guys like Hayek had won it.)

[JW]

Academic life and work != political life and work. Is that so hard?

Excepting that now, the academic work will be used to support the political work with appeals to authority. Not that it will be legitimate, but it will be exceptionally tiresome.

[robc]

Just verified, Merton/Scholes won in 1997, Black died in 1995. Black wasnt robbed, he was pining for the fjords.

[Jerry]

Fischer Black was robbed.

Yeah, he happened to be dead.

[Head]

I knew he was dead - still got robbed. According to some of my professors who knew him, he was the most brilliant of the three. Should have wheeled him out there weekend-at-bernies style.

[JP]

Judging from what Tyler Cowen and Arnold Kling have posted this morning on their blogs, Krugman's scholarship was deserving of the prize. Not being an economist, I'm willing to take their word for it. (But I'm also willing to believe that Krugman's anti-Bush political leanings didn't hurt.)

[gorgonzola\'s foil]

No love for Ronald Coase?

[Hibiscus Monkey]

emac,

"This is a joke, right? This has got to be a joke, right??"

Officially, the Nobel Prize in Economics is academic, yes. Krugman received it for "his analysis of trade patterns and location of economic activity".

This certainly gives Krugman's political opinions more authority than they had before, but I don't see what that has to do with the prize itself, or how it isn't true of other academic prestiges.

[zoltan]

the ascendancy of Laissez Faire

Where did that happen?

[P Brooks]

the ascendancy of Laissez Faire and Supply Side one-size-fits all economic practice

That one goes in the drink! bank.

[Mo]

I knew he was dead - still got robbed. According to some of my professors who knew him, he was the most brilliant of the three. Should have wheeled him out there weekend-at-bernies style.

Yes, he was brilliant. But the Nobel rules say no posthumous awards. That's why Gandhi never got one.

[Mo]

This certainly gives Krugman's political opinions more authority than they had before, but I don't see what that has to do with the prize itself, or how it isn't true of other academic prestiges.

Yeah, just like McCain's list of 100 (actually 90) economists that support his economics plan means nothing. Just because they're economists doesn't mean that their political part isn't the one that supports McCain's policies. Krugman's opinion of Obama is based on political beliefs and is unrelated to his work on international trade. Same with his support of Hill-Dawg during the primary.

[Head]

I had no idea Gandhi also contributed to economics...

[Fluffy]

When TAO said the lecture didn't prove that Hayek was the only one to deserve it, he meant that you need to prove no one else deserved it. Are you that obtuse?

Strictly speaking, if one economist is granted the award for presenting an argument advocating extreme skepticism of claims of economic knowledge, that award itself would seem to contradict other instances in which the award was granted to people claiming economic knowledge.

It's as if you gave an award to Socrates for his concept of aporeia and then the next year gave the same award to Aquinas or some system-building scholastic. The awards contradict each other.

[Head]

"The awards contradict each other." Not sure that skepticism requires one to reject the use of systems altogether - more like a warning to beware of limits, hubris, and derivative knowledge based on shaky assumptions.

[jorgen]

I've read the journal articles Krugman won for, and they were very worthy. Really powerful results from really simple models, so that they can be applied to the maximum number of situations. He's an obnoxious blowhard, but when he's writing as an economist he's really good. And remember, he was very lukewarm about the bailout when the rest of the New York Times was basically calling nay voters traitors.

[Isaac Bartram]

Mo

Gandhi was nominated several times before he died. Apparently there was always someone else more deserving. Not sure why and don't have time to look further.

[Artifex]

Well, they are nothing if not consistent. Maybe they were thinking:

Krugman is to economics like Arafat is to peace.

[Isaac Bartram]

Linus Pauling getting the Chemistry prize probably gave him a wider audience to preach his doctrines of nuclear disarmament and preventive medicine to. He was by no means an expert on either one.

[Fluffy]

Not sure that skepticism requires one to reject the use of systems altogether

Well, in the philosophy example, Socates' statement "I know only that I know nothing" is usually regarded as the best short summary of aporeia. Such a statement would, in fact, require one to reject the use of systems altogether. It doesn't really leave a lot of work for other philosophers to do.

Hayek's skepticism was not that extreme - he only doubted that a certain type of knowledge was possible. But if that work was award-worthy, the work of others claiming exactly that type of knowledge really can't be [or vice versa].

But this is only if we're looking for consistency, and I realize that consistency has never really been a strong point in these types of things.

[Atabrat]

Robert Merton, James Buchanan and Kenneth Arrow are all deserving winners I can name off of the top of my head.

Add Herbert Simon, Robert Aumann, and Thomas Schelling to that list (just off the top of my head). And last year's recipients--Hurwicz, Maskin, and Myerson--certainly deserved it. That said, I don't know about Krugman's academic work.

[Head]

Knowing nothing didn't stop Socrates from thinking a lot of things. Not a terrible lot of it was about economics in any case. Confusing Philosophy and economics is bad news.

[Head]

I know nothing except that Krugman is a douche.

[ChrisH]

1) The Nobel Peace Prize is selected by the Norwegian parliament. The Peace and Literature prizes may be political and whacky, but it is two very separate bodies of political whackos that pick them. Also, if you look at Literature prizes for the early 20th century, you will be astounded by the number of Scandinavians You've Never Heard Of. So their politics change over time.

The Norwegians giving the Peace Prize is kind of like if there were a Buffet Peace Prize given by the Canadian parliament. It's kind of... Peace Prize? U.S. Congress? Are you kidding?

Sweden has kind of gotten out of the world domination business, but they ain't never getting their Prize back.

2) Pauling first got Chemistry, then a Peace Prize. So, if he used his authority to mouth off about stuff, he at least had multiple authorities.

3) Over the years, Economics Nobels have gone to members of the Austrian School, the Virginia School, and the Chicago School -- all free market philosophies and arguably radical ones. Many of the other ones have gone to market-respecting economists or to economists for market-respecting work.

So, geez, be a good sport. The fact that so many free marketeers get plaudits from Sweden -- Sweden! -- had been an astonishing dog walking on two legs for decades now. If the electorate gave Libertarians the respect that the Nobel committee gives free-market economists, McCain would be fighting to get included in the debates.

Ya can't win 'em all. Plus, as has been noted, the work this was awarded for would not offend most free marketeers.

That Krugman has chosen to become a blowhard in things he doesn't know much about, well... to quote a free market friend from college: "Ignorance is rampant. Why? Because it's almost free."

(Since then I've realized the ignorance is in fact very expensive, but it has high negative externalities, so the ignorant person has insufficient incentive to stop producing it; the point still stands.)

[JMR]

No, clearly Kristol's in line for the Peace Prize! 😉

[thoreau]

I don't know anything about Krugman's research, so I'll judge his scholarly merits based on whether I agree with his politics.

I'm sure this is a good way to decide the merits of research.

[emac]

econ people are more than willing to give Austrians their due.

ROTFLMAO!!!!

Whew! Thanks for the laugh! That's just too funny!

Kind of like your buddy Krugman did?

Wonder if he still thinks this way 10 years later, after the tech bubble and the housing bubble bursting have proven him totally wrong again?

And for all of you who believe that there could be worse choices for this prize, please consider this: Krugman is an extremely high-profile Keynesian who still firmly believes FDR and his New Deal actually saved the country from the Great Depression, instead of severely deepening and lengthening it. He has proposed an even greater New Deal for our current problems.

With his high profile and new clout this Nobel will give him, he is almost certain to have a high position of influence in the Obama administration in the midst of the credit-fueled economic disaster we find ourselves in. He may even be the architect of a New New Deal, which would guarantee a disastrous global depression and smash what is left of the productive economy. Does anyone still believe there was a worse choice out there? At least some obscure academic would not be in a political position to finish off our tattered economy.

[JW]

I don't know anything about Krugman's research, so I'll judge his scholarly merits based on whether I agree with his politics.

I'm sure this is a good way to decide the merits of research.

To be fair, I knew nothing of Krugman's earlier work and had the same initial reaction that many people did. THIS HACK?

I don't think it's a stretch to presume that political views and academic work are linked in some significant way.

[The Angry Optimist]

clingest thou to thou religion, emac. I mean, you're only hurting yourself.

[joe]

There comes a point when feigning slack-jawed bafflement at the statement of others ceases to be a way of expressing a point, and reveals itself as actual slack-jawed bafflement.

Like the 13-year-old who says that everything he doesn't understand is "gay."

[Head]

"I'm sure this is a good way to decide the merits of research." fortunately, the people on this thread are not in the position of evaluating the merits of economic research. I doubt anyone here - myself inclusive - are qualified. Absent that, I still feel qualified to call him a douche based on his being media whore.

[ChrisH]

clingest thou to thou religion, ...

Meant you:
"Cling thee to thy religion, ...!"

or:
"Clingest thou to thy religion, ...?"

?

In either case, teach thyself pronoun declension, ere thou feignest pretension.

[joe]

Damn, ChrisH, whom pissed in your cornflakes this morning?

Heh.

[ChrisH]

Don't worry, joe. I know your pretension is always real, not feigned.

But I don't always get your irony, so I don't know if the misuse of "whom" is intentional. Then again, I don't give a cornflake one way or the other.

[prolefeed]

Why are so many here upset about this? It's pretty much accepted that Krugman is a brilliant economist which is why he is a professor at one of the most esteemed programs in the nation. Isn't it?

Actually, I suspect that if Krugman were to hold and spout very conservative, non-PC views, he would likely have wound up being a professor at a much lesser school, and someone not named Krugman who holds far-left PC views of politics would have won the Nobel Prize this year.

Haven't read Krugman's economic work. Dunno if it is any good. But he routinely spouts asinine, logic-impaired, pro-big-government drivel in his columns, so at best he is an idiot savant.

Between the Gore and the Krugman awards, I'd say the Nobel Prize suffers from a huge credibility gap regarding objectivity.

[zoltan]

Is Head the new Neal/Miller?

[Shem]

It's as if you gave an award to Socrates for his concept of aporeia and then the next year gave the same award to Aquinas or some system-building scholastic. The awards contradict each other.

Not if the award was given on the basis of contributions to the field.

Gandhi was nominated several times before he died. Apparently there was always someone else more deserving. Not sure why and don't have time to look further.

He didn't get it the earlier times because the committee believed that he was "more a patriot than an advocate for peace" to use their own words. He was probably a shoe-in for it in the year he was killed, but they decided that no posthumous awards could be given (this was the situation that led to the rule being made, though there was discussion beforehand) and awarded it to nobody, saying "no living candidate could be found worthy."

[joshua corning]

It's as if you gave an award to Socrates for his concept of aporeia and then the next year gave the same award to Aquinas or some system-building scholastic. The awards contradict each other.

Please be more opaque...this is far to clear and your use of popular culture is very crass.

[Neu Mejican]

Confusing Philosophy and economics is bad news.

Confusing Philosophy is always bad news.

Economics = a branch of philosophy.

If linguistics is science then economics is science, but both have a ways to go before they prove themselves to do more than describe things. They certainly don't explain or predict things very well. If explanation and prediction are on your list of criteria for a science, then economics and linguistics fail.

Please be more opaque...this is far to clear and your use of popular culture is very crass.

to = too?

[Fluffy]

Knowing nothing didn't stop Socrates from thinking a lot of things.

That's only because Socrates, as he was presented by Plato, was a huge douche.

Although I tend to think that the skeptical, questioning, essentially nihilistic Socrates is probably the historically accurate one, and the Socrates who makes all sorts of ludicrous positive assertions that contradict the skepticism he demonstrates elsewhere was tacked on later by Plato, who liked to stick his own words into Socrates' mouth.

Not a terrible lot of it was about economics in any case. Confusing Philosophy and economics is bad news.

The issue is whether once you give an award to someone who argues for extreme skepticism in a given area of knowledge, it's contradictory to give awards to others who claim knowledge in those very areas. I think Shem has the best response to this: namely, that the awards are being given out for making a "contribution", and not necessarily for presenting work that is correct or valid. If the work doesn't have to be valid, but merely important, then mutually exclusive theorists can be recognized merely for contributing to their side[s] of the overall conversation about the subject.

[Kaiser]

Does anyone actually take the Nobel prize seriously anymore after they awarded Al Gore one for his work promoting man bear pig........I mean global warming.

[Shem]

I think Shem has the best response to this: namely, that the awards are being given out for making a "contribution", and not necessarily for presenting work that is correct or valid.

Well that's your answer then, because the Nobel committee makes no judgment as to the veracity of the work beyond saying "this guy is well-regarded for X work, and so is worthy of being recognized," with X being whatever work they're listing.

[VM]

"
FA Hayek is the probably only Nobel winner in economics who ever truly deserved it.

Ignorant statement of the day."

thank you, TAO!!!! for the win.

it's fun watching the people who have political opinions, no knowledge of economics, get all riled about this!

cheers