Paul Krugman has won this year's Nobel Prize. Okay, pinch yourself. Never mind the numerous individuals whose work has advanced the profession of economics and contributed to our stock of knowledge (my pick was Alchian and Demsetz).
Is this just one more reason to fear that the Age of Milton Friedman is coming to an end? The worldwide growth experienced over the past decade began with ideas influencing politics. Thacher, Regan and Xiao Peng liberalized markets and trade, insired by the likes of Milton Friedman and F.A. Hayek. Despite public choice problems of reform and good economics (which Friedman and Hayek understood) - ideas matter. What will the results of "strategic trade theory" if protectionism is the mechanism for increasing returns? Since when did an economist when the Nobel Prize for contradicting Adam Smith? Aren't increasing returns realized through the division of labor, the division of labor being limited by the extent of the market!