Nobel Prize-winning economist Paul Krugman has published a new essay arguing that Americans' love of mobile gambling apps is doing serious societal harm.
Writing on his Substack page, Krugman outlines how the mobile web has erased any friction points that used to exist for legalized betting and have made it into a full-blown addiction that he believes is on par with the opioid epidemic.
"As technology made gambling and speculation essentially frictionless, fueling the rise of predatory 'limbic capitalism,' policy did nothing to protect Americans from their self-destructive instincts," he argued. "And while ordinary gambling can and does ruin people’s lives, gambling that takes the form of asset speculation can suck in far more people, because, as Robert Shiller pointed out long ago, widespread optimism about an asset’s price can for a while be self-fulfilling, because it initiates a 'natural Ponzi scheme.'"
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Krugman believes that this is exactly what has been happening in the world of cryptocurrency, where prices of assorted digital coins have been soaring even though, he argued, there has been little proven use for them outside of conducting illicit activities.
That said, Krugman made no predictions on when the cryptocurrency bubble is going to burst because "with gambling on asset prices easier than ever, natural Ponzi schemes can run even longer and higher than in the past," while then adding that "crypto, built on a foundation of technobabble and libertarian derp, is both a Ponzi scheme and a cult."
As if this weren't troubling enough, Krugman noted the outsize role that the crypto industry played in political donations in the 2024 presidential election, pointing to a report that just three pro-cryptocurrency super PACs spent a whopping $133 million to influence the outcome.
This led Krugman to conclude that "the crypto piece of the gambling epidemic gets so big that it’s seriously warping our politics."
