A hopeful contribution to the reconstitution of a profession whose reputation has been seriously damaged, both fairly and...

ECONOMICS RULES

THE RIGHTS AND WRONGS OF THE DISMAL SCIENCE

Rodrik (Economics and Social Sciences/Princeton Institute For Advanced Studies; The Globalization Paradox: Democracy and the Future of the World Economy, 2011, etc.) challenges both his professional colleagues and broader public opinion regarding his much-maligned field.

The author believes that economists have “none other than themselves to blame” for the widespread criticism of their competence. His account of the failures of the profession prior to the 2008 recession is spot-on, and his history of the post–World War II Bretton Woods agreements provides useful background information for his arguments. Rodrik sees the field as one that “excel[s] at contingent explanations of social life,” and he takes issue with the idea that there can be any one particular theory, or model, about economic phenomena that is uniquely right, to the exclusion of all other concepts. As the author notes, economists should focus on what their profession can do and keep their own views about political issues out of their considerations. While “economists can provide useful input,” going further often results in a situation of “malpractice.” Noneconomists tend to judge economists by their predictions of market trends. During his presidency, writes the author, Harry Truman, “frustrated by the conflicting and hedged advice he was receiving from his advisers, was “said to have asked for a ‘one-handed economist.’ ” Rodrik insists that the strengths of economics are what most people, following Truman, say are its weaknesses. In arguing for the profession to both highlight the useful work economists are doing—e.g. Jean Tirole's recent Nobel Prize in Economic Sciences for his work on the regulation of industry—while being a bit humbler about it, he is also pointing out the misconceptions of noneconomists. He believes economists who stay silent ought to speak out.

A hopeful contribution to the reconstitution of a profession whose reputation has been seriously damaged, both fairly and unfairly.

Pub Date: Oct. 13, 2015

ISBN: 978-0-393-24641-4

Page Count: 256

Publisher: Norton

Review Posted Online: June 4, 2015

Kirkus Reviews Issue: June 15, 2015

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Occasionally wonky but overall a good case for how the dismal science can make the world less—well, dismal.

GOOD ECONOMICS FOR HARD TIMES

“Quality of life means more than just consumption”: Two MIT economists urge that a smarter, more politically aware economics be brought to bear on social issues.

It’s no secret, write Banerjee and Duflo (co-authors: Poor Economics: A Radical Rethinking of the Way To Fight Global Poverty, 2011), that “we seem to have fallen on hard times.” Immigration, trade, inequality, and taxation problems present themselves daily, and they seem to be intractable. Economics can be put to use in figuring out these big-issue questions. Data can be adduced, for example, to answer the question of whether immigration tends to suppress wages. The answer: “There is no evidence low-skilled migration to rich countries drives wage and employment down for the natives.” In fact, it opens up opportunities for those natives by freeing them to look for better work. The problem becomes thornier when it comes to the matter of free trade; as the authors observe, “left-behind people live in left-behind places,” which explains why regional poverty descended on Appalachia when so many manufacturing jobs left for China in the age of globalism, leaving behind not just left-behind people but also people ripe for exploitation by nationalist politicians. The authors add, interestingly, that the same thing occurred in parts of Germany, Spain, and Norway that fell victim to the “China shock.” In what they call a “slightly technical aside,” they build a case for addressing trade issues not with trade wars but with consumption taxes: “It makes no sense to ask agricultural workers to lose their jobs just so steelworkers can keep theirs, which is what tariffs accomplish.” Policymakers might want to consider such counsel, especially when it is coupled with the observation that free trade benefits workers in poor countries but punishes workers in rich ones.

Occasionally wonky but overall a good case for how the dismal science can make the world less—well, dismal.

Pub Date: Nov. 12, 2019

ISBN: 978-1-61039-950-0

Page Count: 432

Publisher: PublicAffairs

Review Posted Online: Aug. 29, 2019

Kirkus Reviews Issue: Sept. 15, 2019

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A declaration worth hearing out in a time of growing inequality—and indignity.

ECONOMIC DIGNITY

Noted number cruncher Sperling delivers an economist’s rejoinder to life, liberty, and the pursuit of happiness.

Former director of the National Economic Council in the administrations of Presidents Bill Clinton and Barack Obama, the author has long taken a view of the dismal science that takes economic justice fully into account. Alongside all the metrics and estimates and reckonings of GDP, inflation, and the supply curve, he holds the great goal of economic policy to be the advancement of human dignity, a concept intangible enough to chase the econometricians away. Growth, the sacred mantra of most economic policy, “should never be considered an appropriate ultimate end goal” for it, he counsels. Though 4% is the magic number for annual growth to be considered healthy, it is healthy only if everyone is getting the benefits and not just the ultrawealthy who are making away with the spoils today. Defining dignity, admits Sperling, can be a kind of “I know it when I see it” problem, but it does not exist where people are a paycheck away from homelessness; the fact, however, that people widely share a view of indignity suggests the “intuitive universality” of its opposite. That said, the author identifies three qualifications, one of them the “ability to meaningfully participate in the economy with respect, not domination and humiliation.” Though these latter terms are also essentially unquantifiable, Sperling holds that this respect—lack of abuse, in another phrasing—can be obtained through a tight labor market and monetary and fiscal policy that pushes for full employment. In other words, where management needs to come looking for workers, workers are likely to be better treated than when the opposite holds. In still other words, writes the author, dignity is in part a function of “ ‘take this job and shove it’ power,” which is a power worth fighting for.

A declaration worth hearing out in a time of growing inequality—and indignity.

Pub Date: May 5, 2020

ISBN: 978-1-9848-7987-5

Page Count: 384

Publisher: Penguin Press

Review Posted Online: Feb. 26, 2020

Kirkus Reviews Issue: March 15, 2020

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