Academic memories

John Hussman recounts this incident at Stanford.

There’s an economists’ riddle that goes “Why are the debates in academia so bitter?” – the answer – “Because the stakes are so low.” Now, very often, that’s true. I remember a presentation that Paul Krugman gave at Stanford where he was talking about a model of economic development. Paul drew a diagram on the board, and as he described it, he drew a few little arrows indicating migration of businesses from one area to another. A respected economic theorist at Stanford, Mordecai Kurz (who never drew an arrow without a differential equation), immediately jumped up and shouted “You haven’t described the dynamics!!” to which Paul responded that he was indicating a general movement of economic activity toward one place to improve efficiency. Dr. Kurz pounded the table and screamed “Then erase the arrows!! ERASE THE ARROWS!!” and then stormed out of the room and slammed the door behind him. I think that was probably the exact moment that I decided to go into finance.

Ahh I remember that seminar well. I had only been at Stanford a few weeks in 1990. It was actually not a talk about economic development but about economic geography where Krugman was presenting the work in that field that would win him the Nobel prize. It was a terrific, clarificatory piece of applied economic theory that was obviously seminal and would define the field. And it was the area I ended up doing my PhD dissertation on. I guess these things impact people, differently.