Psychohistory and the Nobel Prize

Paul Krugman on the things that led him to become an economist:

Admittedly, there were those science fiction novels. Indeed, they may have been what made me go into economics. Those who read the stuff may be aware of the classic Foundation trilogy by Isaac Asimov. It is one of the few science fiction series that deals with social scientists—the “psychohistorians,” who use their understanding of the mathematics of society to save civilization as the Galactic Empire collapses. I loved Foundation, and in my early teens my secret fantasy was to become a psychohistorian. Unfortunately, there’s no such thing (yet). I was and am fascinated by history, but the craft of history is far better at the what and the when than the why, and I eventually wanted more. As for social sciences other than economics, I am interested in their subjects but cannot get excited about their methods—the power of economic models to show how plausible assumptions yield surprising conclusions, to distill clear insights from seemingly murky issues, has no counterpart yet in political science or sociology. Someday there will exist a unified social science of the kind that Asimov imagined, but for the time being economics is as close to psychohistory as you can get.

Krugman is famous for his work on the economics of international trade, but as our corporate cousins at Nature remind us, one of his early works was a pioneering examination entitled The Theory of Interstellar Trade:

Abstract: This paper extends interplanetary trade theory to an interstellar setting. It is chiefly concerned with the following question: how should interest charges on goods in transit be computed when the goods travel at close to the speed of light? This is a problem because the time taken in transit will appear less to an observer travelling with the goods than to a stationary observer. A solution is derived from economic theory, and two useless but true theorems are proved.

The young Krugman observed that “This paper, then, is a serious analysis of a ridiculous subject, which is of course the opposite of what is usual in economics.”

Today, in another step on SF’s long march toward taking over the world, Paul Krugman was awarded the Nobel Prize in Economics. And, evidently, he’ll be discussing the works of Charles Stross in a seminar to be published on Crooked Timber sometime next month. We can’t wait.


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