Few people were surprised when Paul Krugman won the Nobel Prize for Economics this month. In 1991, he won the John Bates Clark Medal for an American economist younger than 40 - a plaudit sometimes considered as prestigious as the Nobel. His work on economic geography and international trade - explored across 15 books and hundreds of journal articles - remains hugely influential. "What are the effects of free trade and globalization? What are the driving forces behind worldwide urbanization? Paul Krugman has formulated a new theory to answer these questions," the Swedish academy said in its citation. Of other Nobel economists, only Joseph Stiglitz has a comparable public profile. Krugman began his twice-weekly New York Times column in January 2000, becoming one of the few pundits in the mainstream press to unflinchingly attack George W. Bush in the run-up to the Iraq invasion. As the Times, Washington Post, New Yorker and New Republic fell obediently in line with the Bush administration, Krugman's columns were heretical. "I was largely alone on the major op-ed pages," says the mild-mannered 55-year-old Princeton professor. "We look back now at 2002 and say, 'Nothing really bad happened to people. We did not have a new era of McCarthyism.' But that was very far from clear at the time. It was pretty frightening." In the fevered climate of post-9/11 America, his outspokenness attracted death threats. But Krugman, a self-described pussycat, accustomed to the sedate groves of Ivy League academe, never set out to fight political battles. "It has been a much less easy life than I expected to be leading at this point. I should be sitting around in well-stuffed armchairs reflecting upon my life's research work." When Krugman was approached by the Times to write a column in 1999, he wrongly presumed it wouldn't be too time-consuming. The main burden would be financial - the newspaper's conflict-of-interest rules prohibited him from giving corporate talks, for which he commanded up to $50,000. With the American political scene calm and the economy booming, Krugman expected to write about business deals, the Internet and developing world financial crises. But the 2000 presidential election politicized him. "A funny thing was happening. The candidate of one major party was being blatantly dishonest in what he said - at that point about economics - and no one was calling him on it." Krugman argues that the media give a soft ride to mendacious politicians because journalists are trained to consider two sides of any issue. "If Bush said that the world was flat, the headline on the news analysis would read 'Shape of Earth: Views differ,'" he quipped in 2000. In The Great Unraveling: Losing Our Way in the New Century (2003), Krugman explains why many people failed to grasp the radicalism of the Bush agenda: "People who have been accustomed to stability can't bring themselves to believe what is happening when faced with a revolutionary power, and are therefore ineffective in opposing it." Whereas most Times columnists are career reporters, Krugman's academic background means he was never socialized to follow the dominant media line. Other political journalists chase contacts at Washington dinner parties, but Krugman maintains his independence by leading the relatively secluded life of a university professor in New Jersey. Though sometimes criticized for not doing much original research, he doesn't see any reason to interview executives or government officials. "I'm not trying to do the beat reporter style. That's not my brief. Overwhelmingly, what I'm writing about is policy issues, and some carefully neutral words are not going to help me sort it out." Even Krugman's admirers sometimes flinch at his savagery. "He steps over the top," says Stiglitz, a close acquaintance. "He doesn't titrate his tone to the magnitude of the outrage. I think he's been too harsh on Obama." Krugman is concerned about Obama's conciliatory style. "If he really thinks that he can reach across the isle and hammer out solutions that are going to get past partisanship, then he's going to get nothing done," Krugman says. KRUGMAN'S MOST recent book, The Conscience of a Liberal, makes the case for universal health insurance and surveys, in typically punchy prose, the history of American political economy. Krugman reveals how the bipartisan consensus and economic parity of the post-World War II era was eroded by the emergence of "movement conservatives" - an unholy alliance of political, business and religious forces that evolved into Dubya-era neocons. The Conscience of a Liberal shows that the US is unique among advanced countries in failing to guarantee basic health care to its citizens. The dependence on private insurance means 15 percent of Americans lack health coverage. Opponents of a single-payer system suggest that it would cost the taxpayer too much, but Krugman argues it would be cheaper than the status quo. Private insurers have little incentive to pay for preventive care that minimizes long-term costs; they are also more bureaucratic than state health programs, so incur greater administrative expenses. Krugman is less optimistic about health reform now than when the book came out in the US last October. "The odds of getting all the way to an effectively universal system are well under 50/50 now. A lot of people think that by definition any system which has the government playing a key role is going to be terrible. John McCain talks about how terrible everybody else's health care system is compared to the US, in terms that would have residents of France or Germany laughing." Krugman's father was a politically liberal insurance company executive. As a teenager on Long Island, Paul Krugman fantasized about becoming a "psychohistorian" - one of the prophetic mathematicians of Isaac Asimov's Foundation trilogy. He decided at college that economics was the next best thing to Asimov's fictional science. After earning an undergraduate degree at Yale, Krugman went to the Massachusetts Institute of Technology for his PhD, where he consolidated a refreshingly non-ideological approach to economics. Satisfying neither hard-line free-marketeers nor dogmatic interventionists, Krugman styles himself as a "free-market Keynesian." "In practice, it is a common position. You believe in government intervention but also have a strong appreciation for the power of markets and where you can rely on the market." In 1979, he formulated the first model to explain currency crises. But Krugman remains best known among academic economists as a founder of so-called New Trade Theory. In the classical model of "comparative advantage," a country's relative share of natural resources was alone seen to dictate the success of its industries on the world market. Krugman showed that specialization and technological sophistication are sometimes enough to account for market domination. This influential research lead to a revelatory one-year stint as a member of Ronald Reagan's Council of Economic Advisers in 1982. "Key decisions were being made on the basis of rather obscure 'I talked to a businessman who told me' sort of reasoning." Krugman discovered the reluctance of government officials to amend policies. "Most things stay the way they are unless there's very strong pressure to change." He happily returned to scholarship the following year. "As a subordinate, I was okay, but in terms of being a government official at a more senior level, my fundamental lack of tact would become a really serious problem." By 1984, though a full professor at MIT, he was dissatisfied. "I had a good job and a good income, and from the point of view of what the vast majority of the world have I was doing fine. But I wasn't at the top of the heap in terms of the academic pecking order. My reference group were the people who were really the star economists." Krugman's star rose during Bill Clinton's 1992 campaign, when his work on income inequality was used by Clinton's advisers to help demolish Republican claims that the widening wage gap was a myth. Many speculated that Clinton would appoint Krugman as chairman of his Council of Economic Advisers. When he was passed over in favour of Berkeley economist Laura Tyson, Krugman was bitter. He dismissed Tyson as "a third-rate interpreter of other people's work" and denounced two of Clinton's other appointees as "pop internationalists" who "repeat silly clichÃ©s but imagine themselves to be sophisticated." Krugman now downplays his ambitions to be part of Clinton's team. "I'd have liked the analytical parts of the job but I'm a terrible manager and I'm not tactful, so I don't think I belong in that kind of position." He speculates that he alienated Clinton during their first - and last - meeting in 1992. "I was dismissive of concerns about industrialization, which were a favorite theme of his. If that was an audition, I failed." Stiglitz admits that "his firebrand [temperament] which serves him well, in some ways, in journalism, may not be that great in the political context." Stiglitz feels that Krugman underplayed the achievement of the East Asian economies before the 1997 financial meltdown. "He suggested that there was no miracle - that they had just saved a lot," Stiglitz says. "My response was that it was a miracle that they had saved that much. No other countries had succeed in saving at that rate and investing that level of savings well." As Krugman predicted, the Asian boom economies collapsed, and George W. Bush's rationales for invading Iraq are now widely recognized as canards. Yet rather than relaxing with the satisfaction of a vindicated dissenter, Krugman is hard at work on his academic career, revising an introductory economics textbook co-authored by his wife, Robin Wells. It's a lifestyle to which he says he could imagine fully returning. But Krugman's reference group is now not just star economists but also political columnists. Some see him as the most influential political commentator in the US. He will want to keep it that way. Abandoning the spotlight for the ivory tower seems unlikely.

Armchair warrior

Paul Krugman's outspokenness has attracted death threats.