Paul Krugman's Infamous 1998 Internet Prediction: A Zany Retrospective

Avery Emberly

Updated Sunday, July 28, 2024 at 12:00 AM CDT

In the world of economic predictions, few statements have aged as poorly as the one made by Nobel Prize-winning economist Paul Krugman in 1998. The now-legendary quote, featured in a recently resurfaced image on Reddit, captures Krugman’s assertion: "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."

This image, showing a photograph of Krugman with short gray hair, a full gray beard, and a checkered brown suit jacket, has sparked a lively discussion about the pitfalls of economic forecasting. Krugman himself has provided some context for the quote, explaining that it was part of a whimsical piece for the Times magazine's 100th anniversary, intended more as a thought-provoker than a serious prediction.

However, this hasn’t stopped the internet from having its fun. Comments range from acknowledging the fax machine’s revolutionary impact on industries to outright calling Krugman a "legendary idiot" for what many see as a spectacularly wrong prediction. One Redditor pointed out that Krugman’s prediction underestimated humanity's love for free content, while another humorously noted, "Hey, if you’re gonna be wrong, at least be spectacularly wrong."

Krugman, despite this notable blunder, has had his share of accurate predictions as well. He warned of the tepid response to the 2008 financial crisis and the debt spiral in Venezuela. Still, his critics argue that stepping out of his lane often leads to notable errors, sometimes influenced by political biases.

The image and its accompanying quote serve as a reminder of the challenges and uncertainties inherent in economic forecasting. As one commenter aptly put it, predicting complex and chaotic human behaviors is far more difficult than forecasting weather patterns. This unpredictability is why many hold the view that "nobody can predict the future, least of all - economists."

Paul Krugman's 1998 prediction about the internet may have missed the mark, but it continues to be a source of humor and reflection in discussions about the reliability of expert forecasts. In the end, it reminds everyone that even the most respected minds can sometimes get it spectacularly wrong.

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View source: Reddit

Top Comments from Reddit

asianyeti

From a Business Insider article: --- We emailed Krugman for a comment on the quote and here's his explanation: "Well, two things. First, look at the whole piece. It was a thing for the Times magazine's 100th anniversary, written as if by someone looking back from 2098, so the point was to be fun and provocative, not to engage in careful forecasting; I mean, there are lines in there about St. Petersburg having more skyscr****s than New York, which was not a prediction, just a thought-provoker." --- Then the rest of it is about Bitcoin or something, idk.

Sca**z

Fax machine revolutionized many industries once it became popular enough that everyone had it. So he’s kinda right. Both had huge impacts!

LoonyFruit

I tend to think that internet on its own is one of the best humanity's inventions. But it gave birth to some of the humatiny's worst things.

heliosh

I googled it for a bit of context >It was a thing for the Times magazine's 100th anniversary, written as if by someone looking back from 2098, so the point was to be fun and provocative, not to engage in careful forecasting; I mean, there are lines in there about St. Petersburg having more skyscr****s than New York, which was not a prediction, just a thought-provoker.

Nanteen1028

How many times must an expert be surprised or proven wrong before they're no longer considered an expert? Edit: I made this comment as an example. Such as whenever there are say business numbers the story seems to start with "experts were surprised at....' It's like how many times do you have to be wrong before you're not an expert.

DreadPirateGriswold

It's not just that he's an economist. There's an old saying that says, "PhDs know a lot about a little and a little about a lot." And when Krugman steps out of his lane, he's usually completely wrong and there's usually a political bias of his behind it.

12345_PIZZA

Hey, if you’re gonna be wrong, at least be spectacularly wrong.

biffbobfred

He’s been right about a lot. He warned of the milquetoast response to the 2008 financial crisis. He warned of the debt spiral that would crush Venezuela. He predicted the current excellent economy, though he thought it would falter a bit. He’s also been wrong. And to his credit he admits it. And redoes his model. He was shocked at how well the economy did under Trump (didn’t crash) but then kind of realized the tax cuts wouldn’t kill us now but long term In a larger sense, they invented a whole new science about things that were complex and chaotic. And that was for weather. Now you’re replacing predictable water vapor and air molecules with hard to predict people. It’s not easy.

HalfForeign6735

"Nobody can predict the future, least of all - economists" - some Economics YouTuber

Mammoth_Leg_8489

Krugman is a legendary idiot as an economist. This isn’t even his dumbest prediction.