Here’s a letter that I sent to Newsweek in response to this article on Paul Krugman (an article, by the way, that quotes my GMU colleague Dan Klein):
Nobel laureate Paul Krugman says that he was attracted to economics because it seemed to him to reveal “the beauty of pushing a button to solve problems” (“Obama’s Nobel Headache,” April 6). Alas, like all economists who mistake their theories for reality, Mr. Krugman misses far too many of the all-important nuanced and ever-changing real-world facts masked by the Greek letters that economists of Mr. Krugman’s ilk use in their complex-seeming but inevitably simplistic mathematical equations.
I was attracted to economics for a reason quite the opposite of the one that appealed to Mr. Krugman, namely, because it helps explain how incalculably complex and productive social orders emerge from billions of individual actions, where no one of these actions is meant to achieve anything more than improvement in the welfare of the individual actor. This type of economics – associated most famously with Adam Smith – teaches that it is hubris of the most extreme sort to imagine that problems can be solved by pushing buttons. Social-engineer wannabes such as Mr. Krugman might mean well, but they are dangerous; they suffer from what another Nobel laureate economist, F.A. Hayek, called “the fatal conceit.”
Donald J. Boudreaux
Chairman, Department of Economics
George Mason University