The ‘Usefully Dangerous’ Economist

This is the story of two economists—John Kenneth Galbraith, who died last year at age ninety-seven, and Paul Krugman, who at fifty-four is in his prime as an economist and a columnist for the New York Times. Like Galbraith, Krugman is a forthright liberal, the most well-known economist of his generation, skilled at writing about economics for a general public.

Yet relations between the two were not what one might think. Throughout much of the 1990s, Krugman declared war on popular writers of economics, and sneeringly said of Galbraith that “he has never been taken seriously by his academic colleagues, who regard him as more of a ‘media personality.’” The “fault line,” he wrote, “between serious economic thinking and economic patent medicine, between the professors and the policy entrepreneurs, is at least as important as the divide between left and right.”

But the world changed when George W. Bush was elected in 2000, and what is arguably the worst administration in the history of the United States took office. It seemed to shake Krugman to the core. He now says of his polemics in the 1990s, “I was wrong obviously. If I’d understood where politics would be now, it would have been quite different.”

Whether lashing out at the administration’s shifting explanations as to why they were delivering truckloads of cash to the wealthy in the form of tax cuts or explaining the dishonesty in the administration’s plans to privatize Social Security or puncturing the cultlike worship of Alan Greenspan or railing against Bush’s deceptions about the war or describing how oil company lobbyists made energy policy for Dick Cheney’s task force, Krugman has committed himself to exposing “the lies of the powerful.”

It is as if Krugman were transported back in time and took to heart Galbraith’s words from his presidential address to the American Economic Association in 1972. Galbraith insisted that power—which he defined as “the ability of persons or institutions to bend others to their purposes”—is decisive in understanding what happens in the world. He went on: “If we accept the reality of power . . . we have years of useful professional work ahead of us. And since we will be in touch with real issues, and since issues that are real inspire passion, our life will again be pleasantly contentious, perhaps even usefully dangerous.”

It’s hard to think of a better description of Krugman. His discovery of the abuse of power now seems to influence not only his op-ed pieces for the Times but also his more serious economic writing.

One example: Krugman has been writing about inequality since the early 1990s. Back then, he documented the extent of inequality and refuted conservative attempts to deny its seriousness or existence. But it is one thing to describe how unequal American society is and another thing entirely to understand the causes of inequality. In the lat...