KRUGMAN WINS NOBEL: ECONOMICS REDEEMED TO AN EXALTED STATUS EVERYONE IS DELIGHTED.

Yesterday it was raining heavily and I felt like staying at home rather than attending office. I felt miserable as I was missing my MBA Macro class for quite some time, setting aside that guilt conscience, I started cleaning up my academic files & books and Paul Krugman’s ‘The Return of Depression Economics’ caught my attention. I got immersed in the book, did I have any premonition then about Krugman winning Nobel when I started thumbing through his book? I am not sure. But I was feeling very much fascinated to go through his volume second time. Krugman had anticipated lot of things in his earlier writings in the late 90s’ about the plausible banking and financial crisis likely to take place in the US and other western countries.

Towards evening, I received a series of phone calls from my students a few of them are now professors that Paul Krugman has received Nobel Prize for his contribution to trade theory. My joy knew no bounds; the feeling that Krugman was not getting his due for long and the heightened lamentation that Krugman would go Ms. Joan Robinson way had been haunting my thoughts. Thank God. The suspense is now over and every honest and good soul in Economics will now have a sigh of relief.

More than a decade ago, when my first daughter was studying M.A English Literature at Pondicherry University campus, a few of her friends, most of them boys- studying MIM made a wry comment to my daughter when I was passing by. “Hey junior Paul Krugman is going there…” perplexed by their comments my daughter mistook their comments to be acerbic sarcasm. But they responded by saying that it was real and made with good intentions and spirit and had nothing to do with sarcasm. With much humility and some minimum intellectual arrogance, I would say that I was chosen by God to introduce Paul Krugman to my MIM students who in any case did not have any rigorous background in Economics proper. The wise and benevolent destiny gave me some academic strength to teach from Paul Krugman’s books and articles to MBA and Politics and International Studies which immensely benefited them.

Small wonder then that Mr. Vinod Kumar, the MIM student of late 1990s, called me late night yesterday from Banglore, and shared his happiness over Krugman’s getting this laurel at long last. Unable to control his joy and a sense of thrill following Krugman’s elevation to exalted status he burst out by saying that he felt as if his own teacher got the prize. What else one needs in the profession? Paul Krugman’s exalted status now as a winner of Nobel has created a series of ripples of happiness among my students and I feel amply rewarded for my work ethics when all well informed students in economics rejoice over this event as if it is an occasion for familial celebration. Professor Ram Gopal, while narrating this event over phone yesterday was recollecting the glimpses of some memorable moments that he spent with his father soon after the latter underwent a major brain surgery in the ICU; still semi-conscious but attempting to answer his son’s questions on Economics in general and his methodology used in Ph.D thesis from his subconscious mind. Intellectually mad people like Prof. Ram Gopal and me including many students spread all over the world just feels elated and happy after receiving this pleasant shock.

For so many years, Krugman was a potential candidate for Nobel Prize but that was getting distanced from him for no fault of his. Indeed, the recognition has come at a right time when unfettered free market capitalism has brought disaster to the United States and other advanced economies. Did not Paul Krugman warn in the eighties when Savings and Loan Association collapsed? More than his contribution to Strategic trade theory which is sighted by the committee while awarding the prize I would say his scholarly writings on currency crises and his critical commentaries on both International Politics and Economics in a lucid style would merit more attention from his supporters and wellwishers.

For a long period Chicago School based economists rooted in monetarist tradition and free market ideology merited attention from the selection committee for Nobelprize. Now there is a welcome paradigm shift in recognizing economists endowed with Keynesian flavor. Let me hope that the role of slim but effective government will have more contextual relevance while experimenting any policy package in the years to come. This event like a chaos theory will have tremendous spill over effects on the thinking and teaching of economics away from neo-classical, free market oriented lassiez faire towards interventionist Keynesian tradition especially in the field of finance. Long ago Keynes told that ‘let not finance go global’; in the current wave of globalization, the world at large may not approve of this but those emerging markets which have not embraced a ful-fledged financial market liberalization have been least affected by the financial hurricane unleashed by the US and others. When Krugman visited India soon after Asian Financial Crisis, he not only wanted the weak banks to be closed and strong banks to be recapitalized well, but also cautioned that capital account convertibility can wait - a sermon which IMF and the US would not have appreciated at that time.

In my early life I was a fan of Harry G. Johnson – a Professor who had a democratic fervor in transmitting knowledge to the lesser privileged people in this part of the globe. Only after going to Pune, Gokulae Institute, I came to terms with Paul Krugman and indeed my last chapter in my PhD thesis was very much borrowed from his third Lionel Robbins Memorial Lecture revolving around exchange rate instability delivered in London in 1989. Since early 1990s my sentimental and intellectual association with his writings has continued uninterrupted.

Having got his Nobel Prize stature, his well-wishers would feel that he should continue to write for students and teachers in economics not well trained in mathematics and econometrics. Although he is quite capable writing in a technical way which many cannot read, his greatness is that he has demystified many complex issues and distilled the essence of the literature on international finance as also international politics. On this occasion I sincerely pray the almighty whom I don’t worship in any conventional way that he should live longer and become more bolder in making economics as a scientific discipline such that even ordinary student in economics can romance with his writings and profit by it.
For long, I have not written in my blogspot. The death of my mother in the first month of this year paralyzed me to the depth that I forgot my responsibility to continue to write. Many significant developments have taken place in international monetary arena, the US dollar sinking and the dollar empire collapsing close on the heels of sub prime lending crisis which cropped up in August 2007. But I failed to realize my academic obligation. Krugman getting the Nobel Prize was such a pleasant long awaited news that I have got out of my deep slumber and will continue to write in the blog.