≡ Menu

Milton Friedman Countered, While Paul Krugman Ratifies, Man-in-the-Street Economics

Cafe Hayek reader Scott Quinn asked me to reprise this post, from September 20th, 2013, comparing Milton Friedman to Paul Krugman.  I’m happy to do so.  It’s below the fold.

Is Krugman Friedman?


At yesterday’s panel discussion on GMU’s Fairfax campus – “Why Is There No Milton Friedman Today?” – my colleague Tyler Cowen argued that there is a Friedman today, and his name is Paul Krugman.  Of course, Tyler knows that politically and on important matters of economic theory Krugman is the polar opposite of Friedman.  But Tyler argued that in many germane dimensions – especially professional achievement, public engagement, and popularity – Krugman is surprisingly like Friedman.

I don’t wish here to debate the merits or demerits of Tyler’s argument.  (The panel and the audience did that debate well – which, I’m sure, will soon enough be available to be viewed on-line.)  But I do here want to relate a question that was asked from the audience by George Selgin (who was visiting GMU yesterday).  That question, in short, is: Has Paul Krugman changed as many minds as did Milton Friedman?

Perhaps it’s an unfair question, given that Krugman is two generations younger than Friedman, and so he hasn’t yet had as much time to influence people as has Friedman.  But on both the economic-theory and (especially) public-policy front, my strong sense is that Krugman has not changed as many minds as has Friedman.  I doubt also that he will ever do so.

Regardless of what you think of the substance of either, Krugman’s scientific contributions are much more narrow and much fewer than are Friedman’s.  They are also, in my judgment, less foundational than are Friedman’s.  (Tyler would respond by noting that economic science, in the time of Krugman, is more specialized than it was in the time of Friedman and, therefore, Krugman simply had not – and has not – the opportunity to contribute with the breadth that Friedman did.  There’s something to this response.)

But Friedman’s scientific contributions also have more policy-relevance than do Krugman’s.  I don’t now have access to my copy of Krugman’s (truly outstanding) 1997 volume, Pop Internationalism, but in one or two essays in that collection Krugman complains that members of the Clinton administration mistook his scientific contribution to strategic trade theory as having more policy relevance than that contribution (in Krugman’s then-estimation) actually has.  In contrast, I cannot think of a single scientific contribution that Friedman made to economics that Friedman would likely ever have argued is valid in theory but not in practice.

The above paragraph isn’t to deny the brilliance of Krugman’s scientific contributions.  But if such contributions are more theoretical niceties than contributions that have genuine policy relevance, it seems as though those contributions will change fewer people’s minds.  At the very least, people outside of the science, appropriately (by the contributor’s own admission), can ignore the contributions.

As for the public-intellectual side of both men’s activities, I believe that Friedman’s advantage – on the “mind-changing” front – over Krugman is clear.  Unlike the Krugman of the past 13 or 14 years, Friedman never reinforced man-in-the-street notions of the way economies work.  Friedman dedicated most of his popular writing and speaking to making seen that which is unseen – to explaining why so many economically untutored notions are wrong.  Krugman, in contrast, now devotes most of his popular-communications effort to reinforcing those untutored notions.

Perhaps Krugman is correct; perhaps the man-in-the-street is right that economics à la Milton Friedman is wrong.  But correct or not, Krugman spends precious little time these days explaining to economically untutored people why economic reality differs from what their undisciplined instincts tell them that reality is.

Paul Krugman assures the man-in-the-street that he – the man-in-the-street – is correct to believe that legislated minimum wages improve the economic lot of low-skilled workers.  Krugman reinforces the man-in-the-street’s natural superstition that higher spending is the key source of economic prosperity.  Krugman pats the man-on-the-street on the back for being suspicious of profit-seeking economic activity governed only by rules of property, contract, and tort and guided only by competitive market forces.  Krugman feeds the man-in-the-street’s worries that scary-du-jour foreigners (the Chinese) are harming Americans by making imports artificially inexpensive for Americans to acquire.  Krugman acknowledges as valid the man-in-the-street’s conviction that the New Deal was a great advance and benefit for ordinary Americans.  Krugman shares the man-in-the-street’s suspicions that large income differences reflect pernicious forces and, whether pernicious or not, are both “unfair” and rather easily correctable through redistributive taxing and spending.  Krugman is as naive as is the man-in-the-street of public-choice economics; he agrees with the man-in-the-street that problems are typically best ‘solved’ by empowering government to deal with those problems.

Of course, I believe that Krugman is mistaken on the above (as on much else).  But that’s not my point here.  Even if Krugman is correct in all that he says these days, he says mostly what the economically untutored and uninformed man-in-the-street already believes.  Krugman, therefore, doesn’t change minds so much as he reinforces pre-existing beliefs.  Friedman did the opposite: correct or incorrect, most of what Friedman told the general public contradicted what the man-in-the-street naturally believes.  Friedman sought to change minds.  Krugman does not.