Von Mises and Sowell, but no Krugman here. . . . But if I was to assume that their intellectual home base was the Austrian school . . .
My other question is what is that you found so interesting about Krugman to list him?
Yes, I find the Austrian school more persuasive than the Keynsian school. Krugman is a Keynsian luminary. I like Krugman's "Return of Depression Economics" for three reasons.
First, it is interesting to me that Krugman and the Austrians agree on a large chunk of economics (market-determined wages vs. the idea of it being exploitation; how Singapore, South Korea, etc. worked their way up to 1st world status; the value of free markets; etc.). Where they have a major disagreement is on whether Keynsian policies *in time of trouble* are good or bad.
Second is that Krugman goes through a lot of economic history, especially of Latin America. Although it is filtered through a Keynsian lense, it is still very interesting to me.
Third is that I figured Krugman would have the strongest, most-persuasive arguments for Keynsianism, so if I were wrong in my assessment of it, I figured he'd be the best guy to show me that. What I saw, though, was a large number of cases that went as follows. A country did some foolish things economically or even got unlucky and then had a chance to smooth it over with appropriate Keynsian policy. Then either of two things happened: (1) the country tried Keynsian policy but did it incorrectly and had a disaster, or (2) they tried Keynsian policy, got it right for a while, but didn't stop the money fire hose once things had improved and had a disaster. I don't recall from the book's multitude of examples cases where a country did it right and then stopped printing money when it should and was thus fine thereafter.
That -- precisely -- is why I think Keynsianism is bad. It has to operate in the real world of humans, not in the realm of a person or group with unassailable authority and perfect (or even good-enough) judgement. The common imperfections include:
1. Wasting the money on things that actually subtract from benefit, like giving the stimulus to nonproductive uses that crowd out productive ones, using it to increase burdensome bureaucracy that harms growth thereafter, giving it to cronies and thus feeding corruption and cronyism, and spending it to make systems or things that are not useful but start soaking up lots of future money to be maintained; and
2. Doing a great job but then not being able to turn off the money fire hose for political and popular reasons (because, hey, if pressing the gas pedal to the floor in bad times made things better, keeping it pressed to floor always is the way to go). That's what politicians and the average public opinion often ends up being. There's too much resistance to taking one's foot off the gas, and so things stay floored too long, building up a bubble that has to be dangerously obvious before things chance, then it is too late, like in the lead up to 2000, to 2008, and to current times (after 7 years of zero interest rate).
What Krugman's book showed me is that Keynsianism doesn't work in practice because of the reality of human imperfection.
That's why free markets work. They don't require human perfection, or the correct pick of some special person or group with ultimate authority, or perfect judgement.
