Paul Krugman's Thoughts About Thinking
Here is a famous essay by Nobel Laureate, Paul Krugman, on how to think about thinking. For value investors this is a must read. It’s one of the most insightful essays applicable to the pursuit of worldly wisdom. (Click here to skip intro and read the essay)
Article Introduction (Via Economist’s View and Princeton)
What I want to talk about in this essay is something more restricted: some thoughts about thinking, and particularly how to go about doing interesting economics. I think that among economists of my generation I can claim to have a fairly distinctive intellectual style — not necessarily a better style than my colleagues, for there are many ways to be a good economist, but one that has served me well. The essence of that style is a general research strategy that can be summarized in a few rules; I also view my more policy-oriented writing and speaking as ultimately grounded in the same principles. I’ll get to my rules for research later in this essay. I think I can best introduce those rules, however, by describing how (it seems to me) I stumbled into the way I work.
Article Excerpts (Via Economist’s view and Princeton)
In the course of describing my formative moment in 1978, I have already implicitly given my four basic rules for research. Let me now state them explicitly, then explain. Here are the rules:
1. Listen to the Gentiles-What I mean by this rule is “Pay attention to what intelligent people are saying, even if they do not have your customs or speak your analytical language.”
2. Question the question – The same is true in a number of areas in which I have worked. In general, if people in a field have bogged down on questions that seem very hard, it is a good idea to ask whether they are really working on the right questions. Often some other question is not only easier to answer but actually more interesting
3. Dare to be silly – If you want to publish a paper in economic theory, there is a safe approach: make a conceptually minor but mathematically difficult extension to some familiar model. Because the basic assumptions of the model are already familiar, people will not regard them as strange; because you have done something technically difficult, you will be respected for your demonstration of firepower. Unfortunately, you will not have added much to human knowledge.
4. Simplify, simplify – Somewhere or other Keynes wrote that “it is astonishing what foolish things a man thinking alone can come temporarily to believe”. And it is also crucial to express your ideas in a way that other people, who have not spent the last few years wrestling with your problems and are not eager to spend the next few years wrestling with your answers, can understand without too much effort. Fortunately, there is a strategy that does double duty: it both helps you keep control of your own insights, and makes those insights accessible to others.