Paul Krugman on Inspiration for a Liberal Economist

Continuing our weekly series on American progressivism, we talk to the Nobel prize-winning economist, Paul Krugman, on why he counts himself a liberal

I wanted to start by saying how pleased I am you call yourself a liberal, because there are a lot of people – politicians – who are reluctant to be associated with the word.

As I see it, there has been a lot of effective propaganda. As a result, a lot of people adopted the term “progressive” as a somehow less charged way of saying the same thing, which I don’t think works. I consider myself both – liberal and progressive. It’s not too different from what would be called a social democrat in Europe – you believe in a decent-sized welfare state, you believe that we are our brothers’ keepers. Of course I’m not a politician so I can afford to label myself in a way that might lose some votes…

The first book you’ve chosen isn’t about economics at all; it’s a work of science-fiction, Isaac Asimov’s Foundation trilogy. But was it part of what inspired you to become an economist?

Yes. This is a very unusual set of novels from Isaac Asimov, but a classic. It’s not about gadgets. Although it’s supposed to be about a galactic civilisation, the technology is virtually invisible and it’s not about space battles or anything like that. The story is about these people, psychohistorians, who are mathematical social scientists and have a theory about how society works. The theory tells them that the galactic empire is failing, and they then use that knowledge to save civilisation. It’s a great image. I was probably 16 when I read it and I thought, “I want to be one of those guys!” Unfortunately we don’t have anything like that and economics is the closest I could get.

I do get a sense from your columns in The New York Times that you are on a mission…

Obviously I try to do straight economics and I do it as well as I can. But this is for a purpose. That purpose is not to find better ways of making money – although I have no problem with people doing that. The purpose is actually to make a better world. So yes, I do feel that I am trying to do something that goes beyond just the analysis.

When I read your book, The Conscience of a Liberal, I came to realise that that purpose is to save the middle-class America you grew up in. Do you feel it’s under threat?

It’s not under threat – it’s actually largely, but not completely, gone. We’re trying to recapture it. We really have had a tremendous polarisation [in wealth]. People notice it every once in a while and it comes as a huge revelation to them. So for example, in last week’s New York Times, Nicholas Kristof had a column about how maybe we’re turning into Pakistan. It’s clear that we are not at all the relatively equal middle-class society we were, and we’re getting less so. That’s something you want to try to turn around.

Your second book is An Enquiry Concerning Human Understanding by the 18th-century British philosopher David Hume. You read this in college and it really changed your life.

Yes. I was at that stage, a college sophomore or thereabouts, when you’re searching around, looking for belief systems. I think it’s actually a point when you’re quite vulnerable, because you are looking for someone who is going to offer you all the answers. Some people turn to religious orthodoxy, other people turn to Ayn Rand. One of my favourite lines – and I haven’t been able to find out who came up with it – is that “There’s an age when boys read one of two books. Either they read Ayn Rand or they read Tolkien’s Lord of the Rings. One of these books leaves you with no grasp on reality and a deeply warped sense of fantasy in place of real life. The other one is about hobbits and orcs.”

Then I read Hume’s Enquiry, this wonderful, humane book saying that nobody has all the answers. What we know is what we have evidence for. We do the best we can, but anybody who claims to be able to deduce or have revelation about The Truth – with both Ts capitalised – is wrong. It doesn’t work that way. The only reasonable way to approach life is with an attitude of humane scepticism. I felt that a great weight had been lifted from my shoulders when I read that book.

Because before that you felt the pressure to adopt a particular belief system?

I felt the pull of them. You look at people who are very certain, and have these beliefs of one form or another and you think, “Maybe they really know something!” And what Hume says is, “Actually, no. They don’t.”

Wouldn’t some people accuse you of having an extremely strong belief system? Isn’t there a sense among liberals that, “We’re in the right so we don’t have to pay too much attention to conservative or Republican arguments”?

In my experience with these things – which I find both within economics and more broadly  – is that if you ask a liberal or a saltwater economist, “What would somebody on the other side of this divide say here? What would their version of it be?” A liberal can do that. A liberal can talk coherently about what the conservative view is because people like me actually do listen. We don’t think it’s right, but we pay enough attention to see what the other person is trying to get at.