Shockingly, Krugman has written a piece that I can find absolutely zero flaws with. Of course, the piece has nothing to do with explaining the economy. That said, it does talk about the economics profession.
I’ve never liked the notion of talking about economic “science” — it’s much too raw and imperfect a discipline to be paired casually with things like chemistry or biology, and in general when someone talks about economics as a science I immediately suspect that I’m hearing someone who doesn’t know that models are only models. Still, when I was younger I firmly believed that economics was a field that progressed over time, that every generation knew more than the generation before.
The question now is whether that’s still true. In 1971 it was clear that economists knew a lot that they hadn’t known in 1931. Is that clear when we compare 2011 with 1971? I think you can actually make the case that in important ways the profession knew more in 1971 than it does now.
While it would be utterly shocking if Krugman came to accept the fact that Austrian economics is the one true and correct theory of economics, alas, we are left wondering what Krugman believes to be true.
Krugman goes on to say:
What I’d add to that is that at this point it seems to me that many economists aren’t even trying to get at the truth. When I look at a lot of what prominent economists have been writing in response to the ongoing economic crisis, I see no sign of intellectual discomfort, no sense that a disaster their models made no allowance for is troubling them; I see only blithe invention of stories to rationalize the disaster in a way that supports their side of the partisan divide. And no, it’s not symmetric: liberal economists by and large do seem to be genuinely wrestling with what has happened, but conservative economists don’t.
And all this makes me wonder what kind of an enterprise I’ve devoted my life to.
So, is Krugman whining that conservative economists (I’m assuming he is talking about Austrians here) are not adequately contrite or is he acknowledging that they are correct; and thus, are not shouldered with any guilt nor should they be? Alternatively, is Krugman saying that Chicago school conservative economists are not adequately contrite and not making any reference to the Austrian school at all?
Is Krugman acknowledging that his liberal demand driven economic theories are wrong or is Krugman saying that Keynes was correct and that it is just neo-Keynesianism that is wrong?
I can’t tell what the hell he thinks about the Austrian school, but what I can tell is that he is definitely second guessing his own brand of neo-Keynesianism.