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The Accidental Theorist: And Other Dispatches from the Dismal Science

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This book is essentially a collection of Krugman's short articles from various sources in 1996 and 1997. I read some of them online after the 97 Asian Crisis. Today is 24th Oct 2002. What, and simply all, he said are still true today. He's a genius and really deserves a Nobel prize. To me, he already has. I think it becomes more appropriate to quote the praise of a Nobel Laureate from the back cover of the book than to write more myself:-(I checked that it's not on the editorial review here on Amazon)

"When it comes to popularized economic wisdom, there are a lot of balloons of ignorance out there, many of them reinforced by self interest and self confidence. Fortunately Paul Krugman is also out there, popping those balloons with intelligence, style and wit. You can learn a great deal, about economics and otherwise, by reading these delightful essays."

Robert M. Solow, Nobel Laureate
MIT

In the introduction to 'The Accidental Theorist', Paul Krugman states his ambition to do for Economics what Carl Sagan has done to Astronomy - to serve it to the intelligent public without the specialized vocabulary and the math - to popularize economics. In so far as this book is intelligent, enlightening, and most of all - fun, Krugman has hit home run.

This is a book of essays, most published in Slate, but also including various speeches and pieces for other markets, such as the New York Times Magazine. In most of them, Krugman discusses the fallacies of prominent 'Accidental Theorists' - people who get economics wrong, either through ignorance of and contempt to economics - like the 'hero' of the title essay, Rolling Stone reporter William Greider who apparently thinks that economics is "not really a science so much as a value laden form of prophecy" even though he doesn't know the first thing about it (p.23) - or, for those who should know better, because they are blinded by their political agenda - like Conservative house leader and professor of economics Richard Armery, whose manipulation of data Krugman exposes (pp. 58-59).

Krugman is celebrated as an independent scholar, deconstructing fallacies both from the left and from the right. Even though Krugman attacks leftists wrongs (as in the aforementioned 'accidental theorist' and in a series of attacks on the dismal economic policies of socialist France), it is clear where his heart is. Krugman is a free market Liberal, who supports active governments, both for the definition of property rights ('Taxes and Traffic Jams' pp.173-178), and for helping the poor, including funding Medicare by increasing taxation (pp. 189-190). Krugman also attacks Supply Side Economics (in a whole section of the book titles 'Right Wing Wrongs'), and argues that inequality in American is not, for the most part, the fault of the poor (p. 54).

I basically share almost all of Krugman's views, and Krugman takes care to separate his ideology from his analysis, but he is not the unbiased source he sometimes appears to be (but then again, who is?).

The greatest in the arsenal of weapons in Krugman's war against economic fallacies is his command of prose. Krugman tackles difficult subject with the immense clarity and wit, and the pure joy of reading it would make this book interesting even for those who are well acquainted with economics.

The weakest aspects lie not in these essays themselves, but in the editing. Krugman essentially collected the essays, arranged them according to themes, and wrote introductions to each theme. The book suffers from several weaknesses which could have been avoided with a little more care.

First, there is a complete lack of scholarly apparatus that will let the reader track Krugman's facts and statements. The book has neither footnotes nor a bibliography, and there's not even an index.

Second, these essays were written in the middle 1990s, during the height of the Clinton years. They constantly refer to then current affairs. But what was the here and now in 1997 is now then and there, and the memory of events will not become fresher as the first Bush administration comes to an end. More background information about the situation when Krugman has written would have made this much easier to get into.

Finally, Krugman misses the opportunity to update us on what has happened since he has written these essays. Several people criticized here, such as historian David Hackett Fischer, must have reacted to Krugman's and similar criticisms, but if they did, their voice here is silent. Nor does Krugman bother to tell us how he feels the realities (such as the European Monetary Union or the troubles in Latin America) measure up to his predictions about them. It feels like a lost opportunity - Krugman could have reconsidered these essays, instead of merely republishing them.

Faults aside, Paul Krugman's book may just be the best written book about economics I've ever read. His prose and insights are well worth your time and money.

This compilation of some of Paul Krugman's articles provides the reader wih an insight to a number of economic theories. Krugman's book doesn't require the reader to have an economic encyclopedia by his/her side while reading it - the examples are very basic and down to earth, and even those that are totally clueless when it comes to economics are able to understand what Krugman is trying to say. He has skillfully taken many a complex theory and broken it down into a language that can be comprehended by the massses. In fact Krugman at times makes fun of those other economists that make simple economic theories look highly complicated. While reading the book you will also come across Krugman's sly sense of humor which livens things up dramatically. Krugman also emphasises the connection between international relations and economics - you will understand the intricacies of these two worlds, and the way in which they are intertwined. An extremely interesting and enjoyable read.

The Accidental Theorist was written by Paul Krugman, an economics professor at Princeton and a contributing author to Slate and Fortune magazine. (For more bio information, check out Dr. Krugman's personal site .

The Accidental Theorist is a collection of essays written for various journals and are categorized into six sections. Krugman showcases his belief in the markets and his contempt for supply-side economics all in one very accessible book.

Part 1: Jobs, Jobs, Jobs
Part 2: Right-Wing Wrongs
Part 3: Globalization and Globaloney
Part 4: Delusions of Growth
Part 5: The Speculator's Ball
Part 6: Beyond the Market

Part 1: Jobs, Jobs, Jobs This section discusses the misconceptions that the average Joe has about there only being a set amount of work to be done and that if this work is done by machine or sent overseas the economy will suffer.

Part 2: Right-Wing Wrongs Krugman appears to reserve certain contempt for supply-side economics and has reserved a whole section to for the topic.
Part 3: Globalization and Globaloney In Part 3 Krugman harps back to Part 1 and discusses the advantages of Globalization.

Part 4: Delusions of Growth
Part 4 is a grab bag of topics and covers topics such as: Inflation, Fed targeting employment rate, Japan's slump, Technology so-called productivity gains and others. This is the best section in the book and is worth the price of the book by itself.
Part 5: The Speculator's Ball
Part 5 discusses the currency markets. There was a lot of activity in this area in the 90's and is a good read.
Part 6: Beyond the Market Part 6 discusses where markets fail. Here Krugman discusses the environment, taxes, the economics of democracy and traffic jams.

All in all a very good read. The language is easily accessible and very informative. Though he does tend to repeat himself (expected in a collection of essays) each essay reveals more of Krugman's world view. There are places where Krugman seems to counter himself. At one point he says that the 1950-2000 technology change is not very impressive compared to 1900-1950, however when discussing inflation he claims there has been a huge increase in the quality of life over the same time period.

In summary The Accidental Theorist is a concise but valuable read.

This book is a collection of 27 essays originally published between 1995 and 1997. Most of them ran in Slate, an on-line magazine, others in the New York Times, Washington Monthly and Foreign Affairs -one was written for the book. "Economics is a difficult and technical subject but nobody will believe it" is the Keynes' quote that Krugman uses to raise his main point: many people make big mistakes by not following sound economics theory. There are a lot of writers and politicians that misuse or not use economics scientific principles when they express their points of view or proposals. Economics is a science without popularizers -writers that in plain and enjoyable language use correct concepts to explain current issues. There is no Carl Sagan equivalent in Economics. Paul Krugman is trying to fill this gap. He has tried in his articles "to explode some plausible-sounding idea that happens to be false or to promote some implausible, disturbing idea that happens to be true". He also has the "purpose of demonstrating what it means to think, really think, about economics." Economics science, according to Krugman, is based on the "proposition that people will usually take advantage of opportunities, plus the observation that my opportunities often depend on your actions and vice versa". The book's essays use this foundation to cover issues in almost every economics field. Its key points or generalizations are: Jobs. Krugman argues that productivity gains do not imply loss of jobs. It implies reallocation of jobs among different economic sectors and an increase in the total jobs of the economy. This has happened in the US -less manufacturing and more service jobs. Extreme right economists. Supply side economists are wrong mainly because for them only supply matters. Tax-cuts as the only way to stimulate growth is wrong because ignores that monetary policy can also foster growth. A fact that right wing economists do not acknowledge is that income distribution in the US worsened in the eighties. Other concepts downplayed by Krugman are the return to the golden standard and the need to less government. Globalization. These essays argue against those who see increase in international trade as a problem for the US. In addition to comparative advantage arguments Krugman makes us think about all the levers of domestic policy that countries have. Against the fears that emerging economies could induce a global glut -exporting too much- the book explains that those economies will consume and import more as they grow. Economic Growth. The business cycle theory (GDP potential vs. actual GDP dynamic) is not dead as many authors declare. The problem is that they forget how powerful monetary policy is to unemployment and GDP levels. Japan problems could have been avoided by an aggressive monetary policy. Speculators and Foreign Exchange. A free-floating regime is better. It gives the country power over its monetary policy -the main tool for economic policy. However, foreign exchange markets cannot be trusted because of speculators. Beyond the Market. Many items have misalignment between price and value. Externalities can be fixed through taxes. New taxes should be traded off against current taxes (income taxes, etc.). Long term forecasts (one century): Soaring resources prices, increasing environmental costs, rebirth of the big city, devaluation of higher education, creation of a celebrity economy. The essays are very enjoyable and very well written. The issues covered are important and current. As a layman, I could not find any economic flaws in any of the articles. Krugman uses the concepts and frameworks that economic academia favors today. He also explains very well the mistakes of many writers and politicians. However, Krugman is too confident in his science. For him economics has all the answers. It reminds me of the outlook that practitioners had for physics and chemistry in the middle of the last century: everything had been discovered. The book skillfully explained why many people have been wrong. Through this we get a flavor of how to think using economic science. However, Krugman does not elaborate enough when he makes his points. He assumes that the reader is proficient in economics. In this regard the book fails in his goal of educating laymen in the science of economics. Paul Krugman is not Carl Sagan .. yet! Laymen encourage him to keep trying.

This book is a collection of short articles on various economics' topics, from jobs, to right-wing economics,globalization, speculation, the Asian economies' growth halt, currencies crisis, and others ... . It is very light and lively reading, an ideal trip companion, especially for financial districts' commuters. As it is often the case with Krugman's writings, it is illuminating - for unaware people at least - on certain topics. After Masterpiece (in my view) "Pop Internationalism", this book provides an additional antidote against "shibboleths", slogans that take the place of hard thinking.

Enjoyable economics. The federal reserve is making more sense. Just when you thought you understood technology and the industrial era - along comes Mr. Krugman with a hot diggity dog story. As he describes other issues in economics, we begin to learn about the corning of some financial currency markets AND IT ALL MAKES SENSE. Finishing up with a spat how the concept of Knowledge Economy is a farce and we actuall capitalize on our celibrity status. Mr. Paul Krugman has a great time with his essays and so will anyone reading them - funny yet educational. Everything you wanted business school to be.

It's 1999 and March. I'm in hospital with a very serious thrombosis in my right thigh. A friend turns up and gives me PK's latest - with a cheery smile. This'll cheer you up, Sunshine. This might be the last book I read and you bring me economics????

Fortunately, he was right. I laughed a lot and cried at the foolishness of the carpet-baggers. I'd read a lot of PK's reviews in Slate before and it was lovely to have access to the best of them, here in a single cover. They range from rants on trade issues to a medley of observations on the Asian Financial Crisis. His piece entitled Bahtulism will remain a classic for years....just for the title.

For me, what makes Krugman really great is not whether he's right or wrong, it's the fact that he can articulate his views quite beautifully and still explain where they are derived from. Many of academic peers are either good at being lurid pontificators (Hanke) or dry academics (Meltzer). Krugman is somewhere in the middle, except his economics is the witty, scarcastic kind. Imagine how good he'd be if he converted to the Gold Bug camp. Loonies with an articulate spokesman. Now that would be something special.

Since I'm still alive and I laughed through most of the bad times in theatre, I'll have to give PK the five stars he's due.

Written for those with a basic understanding of economics, this book addresses many current issues. The short chapters make for quick reading, although I found the book hard to put down once I started reading.

My main criticism of the book is the more or less unquestioning acceptance of globalization. As with globalizaton, one can make simple arguements that capitalism in general is a efficient system, so we should accept it, but "unfettered" capitalism or anything close to it was abondoned long ago. Similarly, I think most people today do not fear globalization, but instead fear "unfettered" globalization. I don't think Dr. Krugman really had much to say about the details of globalization, and the devil is in the details, as they say.

I also question his prediction that education will be de-emphasized in the new century. If the past has been any indication, the advance of technology has required more education, not less. I agree with him that the jobs available will probably be more "vocational", but even these will require more training, because they will probably require use of high-tech equipment. Anyway, as society becomes more productive, more people will be freed to teach, discover and create knowledge, and creation of an enlightened public will help to make a better future. Dr. Krugman seems to have a rather "blue-collar, economic man" attitude about the future, that everyone will do what they can to make the most money they can.

Despite my few criticisms, I highly recommend this book. He makes many points that are quite valid and useful in understanding current economic issues.

It is an empirically measurable fact that management and economics are "hot" topics. Hot in the sense that a lot of people seem to be interested in them at this time; hot also in the sense that tempers tend to run amok during discussions touching these fields. Now, one would expect that, given high demand by the general public, supply would soar. And so it did in some sense: the number of "economics" and "management" books written every year is immense. Sadly, many such books -- as much commentary on those topics -- are to Economics (or management) what fad diet books are to nutrition.

In such an environment, books like "The accidental theorist" by Paul Krugman, and last year's "The witch doctors", are refreshing and important. Refreshing because they use reasoning and logic rather than jargon and fallacies. Moreover, the expositive style of Krugman is enjoyable, and the choice of illustrative examples is inspired. In some ways it takes more sophistication to understand the relevance of "toy" models than the average reader will have; hence Paul quickly points out a real-world, large scale example.

These books are also important because the fields are horribly misrepresented to the general public. Economics is a serious and technical subject, but one in which a handful of graphs and equations can point out the fallacies in good sounding text. Unfortunately, most "economics" best-selling books will present arguments that sound good, but have the misfortune of being completely and utterly wrong. Debunking books like those best sellers is a step on the way to relieving society of the floating nonsense.

The book itself is a collection of essays. Most of these essays are available at Krugman's web page. Some are first time in print. Since readers can get a reasonable sample of what the book is like online, I will only point out a few favorites.

In the title essay for the book, Krugman shows very clearly the power of a simple model ("Suppose that there are only two products in the world, hot-dogs and buns. Labor is the only input to production..."; paraphrased) to explain the effects of labor mobility and productivity changes. Then, after deriving some implications which debunk a common current myth about productivity effects, he removes the toy-nature of the model: substitute hot-dogs for services and buns for manufactures; see what happens? It describes the evolution of our society from industrial- to service- economy. Look at the data. Just as predicted from the hot-dog/bun model.

What to solve the US trade deficit problem? Just secede NYC from the rest of the US. Oh, sounds ridiculous, you say? Then why a separate account for Hong-Kong relative to China?

You can also find in the book an article about supply side (more precisely about some supply siders' lunacy and bad advice) which was meant for the Wall St. Journal, written by invitation. Alas, it was killed by the editor (himself a strong supply-sider). Guess what would have happened if you had followed the advice of those supply-siders when Clintonomics began. (Hint. they predicted doom!)

Still, there is a question that I cannot avoid: since most essays are available online, is the added value of having the book enough to justify its price? Being a Slate reader I have debated with myself whether the convenience (ever tried reading a webpage in the subway?) and the extra chapters were worth $25. In the end I decided for buying, but it was a close call. (Now, don't anybody tell Paul to withdraw the essays from his [free] webpage! That is not the point. Well, ok, that is the point.)

Overall, it's a well written book, debunking common mistakes, and a fun one at that.