Must-Read: Barry Eichengreen and Brad DeLong (2013): New Preface to Charles Kindleberger, “The World in Depression 1929-1939”

Must-Read: Barry Eichengreen and Brad DeLong (2013): New Preface to Charles Kindleberger, “The World in Depression 1929-1939”: “Anyone fortunate enough to live in New England in 1970-1985 or so and possessed of even a limited interest in international financial and monetary history… http://delong.typepad.com/sdj/2013/04/new-preface-to-charles-kindleberger-the-world-in-depression-1929-1939.html

…felt compelled to walk, drive or take the T… down to MIT’s Sloan Building… to listen to Kindleberger…. We understood about half of what he said and recognised about a quarter of the historical references and allusions. The experience was intimidating: Paul Krugman… a member of this same group… awarded the Nobel Prize… has written how Kindleberger’s course nearly scared him away from international macroeconomics. Kindleberger’s lectures were surely “full of wisdom”, Krugman notes. But then, “who feels wise in their twenties?” (Krugman 2002).

There was indeed much wisdom in Kindleberger’s lectures, about how markets work, about how they are managed, and especially about how they can go wrong. It is no accident that when Martin Wolf… challenged… Lawrence Summers in 2011 to deny that economists had proven themselves useless… Summers’s response was that, to the contrary, there was a useful economics… of the pioneering 19th century financial journalist Walter Bagehot, the 20th-century bubble theorist Hyman Minsky, and “perhaps more still in Kindleberger” (Wolf and Summers 2011).

Summers was right. We speak from personal experience: for a generation the two of us have been living–very well, thank you–off the rich dividends thrown off by the intellectual capital that we acquired from Charles Kindleberger, earning our pay cheques by teaching our students some small fraction of what Charlie taught us…