Peddling Prosperity

Peddling Prosperity. Authored by renowned economist and New York Times columnist Paul Krugman, this 1994 work provides a critical analysis of United States economic policy debates from the late 1970s through the early 1990s. Krugman dissects the rise of what he terms "policy entrepreneurs"—intellectuals and ideologues who he argues sold politically appealing but economically dubious ideas to the public and policymakers. The book serves as both a history of recent economic thought and a polemic against the perceived intellectual decline in public policy discourse, aiming to distinguish between serious economic science and seductive but flawed doctrines.

Overview

Published during the first term of President Bill Clinton, Peddling Prosperity examines the shifting landscape of American economic ideology following the stagflation of the 1970s. Krugman structures his narrative around the political pendulum swings between liberalism and conservatism, focusing on the presidencies of Ronald Reagan and George H. W. Bush. He argues that the era was dominated by simplistic, politically-marketed solutions—from the supply-side economics promoted by figures like Arthur Laffer and Jude Wanniski to the strategic trade policy advocated by some on the left, including Lester Thurow and Robert Reich. The book contends that these ideas gained traction not through academic rigor but through effective political marketing, often at the expense of more nuanced, consensus-driven insights from mainstream economics.

Main arguments

Krugman's central thesis is that the United States experienced an "age of diminished expectations" in economic policy due to the ascendancy of "policy entrepreneurs." He dedicates significant analysis to critiquing Reaganomics, particularly the Laffer curve and the promise that tax cuts would be self-financing, which he labels as pseudoscience. On the left, he challenges the managed trade and industrial policy arguments that emerged in response to competition from Japan and Germany, as popularized in works like Thurow's Head to Head. Krugman champions instead the virtues of conventional, neoclassical economics as practiced within institutions like the Massachusetts Institute of Technology and the University of Chicago, emphasizing the importance of productivity growth and sound monetary policy over ideological quick fixes.

Reception and criticism

The book received widespread attention for its accessible and forceful prose, with reviews appearing in major publications like The New York Review of Books and The Economist. Many mainstream economists and commentators praised Krugman for defending economic professionalism against political charlatanism. However, the work also attracted significant criticism. Some, like Brad DeLong and J. Bradford DeLong, argued Krugman overstated the influence and harm of the policy entrepreneurs he targeted. Critics from the political right, including proponents of the Heritage Foundation, accused him of partisan bias and dismissing legitimate challenges to economic orthodoxy. Debates also ensued within academia regarding his portrayal of fields like strategic trade theory and his sometimes dismissive treatment of heterodox thinkers.

Influence and legacy

Peddling Prosperity solidified Paul Krugman's public profile as a prominent intellectual combatant in economic debates, a role he expanded through his subsequent columns for The New York Times and later works like The Conscience of a Liberal. The book's framing of policy debates as a conflict between serious technocracy and popular demagoguery influenced political commentary and has been cited in analyses of later political movements, including the Tea Party movement and the rise of populism. Its arguments presaged later public debates over tax cuts during the administrations of George W. Bush and Donald Trump, and the book remains a touchstone in discussions about the relationship between academic economics, public policy, and political communication.

Editions and translations

The book was first published in 1994 by W. W. Norton & Company in New York City. A revised paperback edition with a new afterword was released in 1995. It has been translated into several languages, broadening its impact in international policy circles. These include editions in Japanese, Korean, Italian, and Spanish, among others, published by firms such as Diamond, Inc. in Tokyo and Critica in Barcelona. The various editions have kept the work in continuous circulation as a primer on late-20th century economic policy debates.

Category:1994 non-fiction books Category:Books by Paul Krugman Category:American political books Category:Economic policy books