Nobel Laureate Paul Krugman Said the Internet Would Be No Bigger Than the Fax Machine

In a Red Herring magazine article literally titled "Why Most Economists' Predictions Are Wrong," Krugman decided to prove his own thesis by making the most catastrophically wrong prediction in tech history. His reasoning? People have nothing to say to each other. Tell that to the 5 billion people now online, posting approximately 500 million tweets, 95 million Instagram photos, and 720,000 hours of YouTube content daily. By 2005—the year Krugman said the internet's economic impact would be clear—Google was worth $52 billion and Amazon had just launched Prime. Today, the combined market cap of just Google, Amazon, Apple, and Meta exceeds $10 trillion. The fax machine industry peaked at $3 billion. To his credit, Krugman later admitted he "got it wrong," though he blamed it on being distracted by the Asian financial crisis. The internet, characteristically, has never let him forget it—his quote has become a meme deployed against him every time he makes a prediction about technology. Most recently: AI.