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Paul Krugman was also skeptical and dismissive of the Internet: > The growth of the Internet will slow drastically, as the flaw in "Metcalfe's law" -- which st

Paul Krugman was also skeptical and dismissive of the Internet: > The growth of the Internet will slow drastically, as the flaw in "Metcalfe's law" -- which states that the number of potential connections in a network is proportional to the square of the number of participants -- becomes apparent: most people have nothing to say to each other! By 2005 or so, it will become clear that the Internet's impact on the economy has been no greater than the fax machine's. > As the rate of technological change in computing slows, the number of jobs for IT specialists will decelerate, then actually turn down; ten years from now, the phrase information economy will sound silly.

buss 13y ago
Being wrong once doesn't make you wrong forever.
- cle 13y ago
  Of course not, but it does affect your credibility, and rightly so. I don't know what his track record is on technology in general, but dismissing something as important and revolutionary as the Internet makes me seriously wonder about his ability to understand the impact of new technologies.
  - Jtsummers 13y ago
    Being wrong on technology as an economist isn't an indicator in this case. Bitcoin is intended as a currency, his skepticism is directed towards that. His background as an economist and success/failure there should give weight to his views.
  - kosei 13y ago
    It doesn't for me. A lot of people were wrong about the Internet. It was a revolutionary technology, but for every revolutionary technology that has succeeded, there are plenty that fail. If we look back 10 years from now, BitCoin could either be hugely successful or a mere afterthought. I'm not going to hold anyone accountable for being "right" or "wrong" about predicting its future. But I suppose this is why sensationalist journalism works.
    - deleted 13y ago
      [deleted]
  - danielweber 13y ago
    Bitcoin is about economics and technology. Technologically, it's pretty amazing. People who try to attack it on technological grounds are probably wrong. Economically, it's a different story, and it's about the economics that economists are most concerned and most informed.
zeteo 13y ago
Yes, having a Nobel Prize in economics doesn't make him right every time. But at least he doesn't have a direct financial incentive to be wrong.
- VMG 13y ago
  His incentive is his reputation among peers.
  - deleted 13y ago
    [deleted]
  - ebbv 13y ago
    Which would be damaged if he were wrong. So his motivation is to be right, not to dismiss BitCoin.
    - fnordfnordfnord 13y ago
      If you turn out to be wrong, along with everyone else in your cohort, that's okay (you can't win them all). It's being wrong, while going against the majority of your peers that gets you laughed at.
- ExpiredLink 13y ago
  > Yes, having a Nobel Prize in economics doesn't make him right every time. Yep, he proved that several times when he wrote about the imaginary Euro crisis.
eridius 13y ago
I think it's safe to assume that Krugman is a lot more trustworthy when talking about something that's actually within his realm of expertise; namely, economics.
- erva 13y ago
  Krugman's "expertise" in economics is akin to an Alchamist's "expertise" in chemistry.
- cinquemb 13y ago
  economics boil down to human behavior. what does it say about a person who is dismissive about the way technology can affect/influence human behavior? what makes him an expert? is it because he panders to what is the status quo (the ever-present monopoly of sorts)? is it because he engages in thoughtful exploration of ideas and notions with a larger community and helps bring about great discussion? is it because he has a degree? is it because he has done something notable for humanity?
- waterlesscloud 13y ago
  He was evaluating the internet's impact on economics.
gamblor956 13y ago
Paul Krugman was mostly right on both accounts...but for the wrong reasons. The fax machine was a sea change when it was introduced. It absolutely was the one communications device every business had to have. It revolutionized white collar businesses and the sales process (imagine! transcontinental signed sales agreements within minutes!). Hell, the catalog industry (upon which the founding laws of e-commerce rest) owes its existence to the fax machine! Krugman misunderstood how important the fax machine was to businesses. And he was right about the number of jobs for IT specialists, which has been declining for the past decade as IT operations are increasingly outsourced (even as other technology-related fields programming/design/etc have vastly grown) to foreign countries or specialized operators (i.e, Google Apps, Office 365, Amazon AWS, Salesforce, etc).
- tolmasky 13y ago
  So with the fax machine analogy, you're saying that not only did he have no idea what he was talking about with his predictions of the future, but he also couldn't even comprehend the present. With relation to IT jobs, wow that is one hell of a stretch.
snowwrestler 13y ago
Paul Krugman is an expert in economics, not the Internet. And while bitcoins live on the Internet, the study of their exchange is economics.
nhaehnle 13y ago
I am curious: Has Krugman actually made any predictions about the potential uptake of Bitcoin? From what I recall, his statements basically amount to saying that using Bitcoin as the basis for the economy is a bad idea because it would hurt macroeconomic developments. Those are very different things, and obviously Krugman is much more likely to accurately predict the latter than the former.

buss 13y ago

Being wrong once doesn't make you wrong forever.

cle 13y ago
Of course not, but it does affect your credibility, and rightly so. I don't know what his track record is on technology in general, but dismissing something as important and revolutionary as the Internet makes me seriously wonder about his ability to understand the impact of new technologies.
- Jtsummers 13y ago
  Being wrong on technology as an economist isn't an indicator in this case. Bitcoin is intended as a currency, his skepticism is directed towards that. His background as an economist and success/failure there should give weight to his views.
- kosei 13y ago
  It doesn't for me. A lot of people were wrong about the Internet. It was a revolutionary technology, but for every revolutionary technology that has succeeded, there are plenty that fail. If we look back 10 years from now, BitCoin could either be hugely successful or a mere afterthought. I'm not going to hold anyone accountable for being "right" or "wrong" about predicting its future. But I suppose this is why sensationalist journalism works.
  - deleted 13y ago
    [deleted]
- danielweber 13y ago
  Bitcoin is about economics and technology. Technologically, it's pretty amazing. People who try to attack it on technological grounds are probably wrong. Economically, it's a different story, and it's about the economics that economists are most concerned and most informed.

zeteo 13y ago

Yes, having a Nobel Prize in economics doesn't make him right every time. But at least he doesn't have a direct financial incentive to be wrong.

VMG 13y ago
His incentive is his reputation among peers.
- deleted 13y ago
  [deleted]
- ebbv 13y ago
  Which would be damaged if he were wrong. So his motivation is to be right, not to dismiss BitCoin.
  - fnordfnordfnord 13y ago
    If you turn out to be wrong, along with everyone else in your cohort, that's okay (you can't win them all). It's being wrong, while going against the majority of your peers that gets you laughed at.
ExpiredLink 13y ago
> Yes, having a Nobel Prize in economics doesn't make him right every time. Yep, he proved that several times when he wrote about the imaginary Euro crisis.

eridius 13y ago

I think it's safe to assume that Krugman is a lot more trustworthy when talking about something that's actually within his realm of expertise; namely, economics.

erva 13y ago
Krugman's "expertise" in economics is akin to an Alchamist's "expertise" in chemistry.
cinquemb 13y ago
economics boil down to human behavior. what does it say about a person who is dismissive about the way technology can affect/influence human behavior? what makes him an expert? is it because he panders to what is the status quo (the ever-present monopoly of sorts)? is it because he engages in thoughtful exploration of ideas and notions with a larger community and helps bring about great discussion? is it because he has a degree? is it because he has done something notable for humanity?
waterlesscloud 13y ago
He was evaluating the internet's impact on economics.

gamblor956 13y ago

Paul Krugman was mostly right on both accounts...but for the wrong reasons. The fax machine was a sea change when it was introduced. It absolutely was the one communications device every business had to have. It revolutionized white collar businesses and the sales process (imagine! transcontinental signed sales agreements within minutes!). Hell, the catalog industry (upon which the founding laws of e-commerce rest) owes its existence to the fax machine! Krugman misunderstood how important the fax machine was to businesses. And he was right about the number of jobs for IT specialists, which has been declining for the past decade as IT operations are increasingly outsourced (even as other technology-related fields programming/design/etc have vastly grown) to foreign countries or specialized operators (i.e, Google Apps, Office 365, Amazon AWS, Salesforce, etc).

tolmasky 13y ago
So with the fax machine analogy, you're saying that not only did he have no idea what he was talking about with his predictions of the future, but he also couldn't even comprehend the present. With relation to IT jobs, wow that is one hell of a stretch.

snowwrestler 13y ago

Paul Krugman is an expert in economics, not the Internet. And while bitcoins live on the Internet, the study of their exchange is economics.

nhaehnle 13y ago

I am curious: Has Krugman actually made any predictions about the potential uptake of Bitcoin? From what I recall, his statements basically amount to saying that using Bitcoin as the basis for the economy is a bad idea because it would hurt macroeconomic developments. Those are very different things, and obviously Krugman is much more likely to accurately predict the latter than the former.