Terrific essay by Adam Tooze in the LRB reviewing Arguing with Zombies: Economics, Politics and the Fight for a Better Future. Three passages that caught my attention.
What sets Krugman apart within this cohort is the way he has, since the 1990s, stopped being a gatekeeper of the status quo and instead become its critic.
The basic idea of the MIT school of the neoclassical synthesis as defined by Samuelson was that Keynesian macroeconomics and neoclassical microeconomics were not contradictory but complementary. As Krugman put it, if you can get macro right then micro will follow. ‘In the Samuelsonian synthesis, one must count on the government to ensure more or less full employment; only once that can be taken as given do the usual virtues of free markets come to the fore.’ It was a dichotomised view of the world, with two different modes of analysis enshrined in separate textbooks and separate career paths for micro and macroeconomists. But as Krugman insisted, ‘inconsistency in the pursuit of useful guidance is no vice. The map is not the territory, and it’s OK to use different kinds of map depending on what you’re trying to accomplish.’ [emphasis added]
The Great Depression, Krugman wrote, ‘ended largely thanks to a guy named Adolf Hitler. He created a human catastrophe, which also led to a lot of government spending.’ ‘Economics,’ he wrote in another essay, ‘is not a morality play. It’s not a happy story in which virtue is rewarded and vice punished.’