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Mount Orégano
Sue Burke
"The Theory of Interstellar Trade," by Paul Krugman 
16th-Nov-2010 09:32 am
euro



In 2008, Paul Krugman won the Nobel Prize in Economics for his contributions to New Trade Theory and New Economic Geography, but back in 1978, as a mere assistant professor at Yale, he wrote a parody of an academic paper about interstellar trade theory.

The paper claims to prove with "two useless but true theorems" and boasts that it "is a serious analysis of a ridiculous subject, which is of course the opposite of what is usual in economics."

As a youth, Krugman was inspired to become an economist after reading Isaac Asimov's Foundation novels, which explains the mention of Trantor.

The paper also claims the research was supported by a grant from the Committee to Re-Elect William Proxmire. Here's the joke: Senator Proxmire (D-Wis.) did not accept any campaign donations in 1976 (or 1982, for that matter) and spent less than $200 out of his own pocket for filing expenses. He won with 73% of the vote. Those were different times.

A link to "The Theory of Interstellar Trade" is at:
http://krugman.blogs.nytimes.com/2008/03/11/economics-the-final-frontier/

The Wikipedia page includes responses to his theorems:
http://en.wikipedia.org/wiki/The_Theory_of_Interstellar_Trade

— Sue Burke

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