A hopeful contribution to the reconstitution of a profession whose reputation has been seriously damaged, both fairly and...
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 3, 2015
Kirkus Reviews Issue: June 15, 2015
BOOK REVIEW
BOOK REVIEW
Occasionally wonky but overall a good case for how the dismal science can make the world less—well, dismal.
“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. 28, 2019
Kirkus Reviews Issue: Sept. 15, 2019
SEEN & HEARD
A readable, persuasive argument that our ways of doing business will have to change if we are to prosper—or even survive.
A well-constructed critique of an economic system that, by the author’s account, is a driver of the world’s destruction.
Harvard Business School professor Henderson vigorously questions the bromide that “management’s only duty is to maximize shareholder value,” a notion advanced by Milton Friedman and accepted uncritically in business schools ever since. By that logic, writes the author, there is no reason why corporations should not fish out the oceans, raise drug prices, militate against public education (since it costs tax money), and otherwise behave ruinously and anti-socially. Many do, even though an alternative theory of business organization argues that corporations and society should enjoy a symbiotic relationship of mutual benefit, which includes corporate investment in what economists call public goods. Given that the history of humankind is “the story of our increasing ability to cooperate at larger and larger scales,” one would hope that in the face of environmental degradation and other threats, we might adopt the symbiotic model rather than the winner-take-all one. Problems abound, of course, including that of the “free rider,” the corporation that takes the benefits from collaborative agreements but does none of the work. Henderson examines case studies such as a large food company that emphasized environmentally responsible production and in turn built “purpose-led, sustainable living brands” and otherwise led the way in increasing shareholder value by reducing risk while building demand. The author argues that the “short-termism” that dominates corporate thinking needs to be adjusted to a longer view even though the larger problem might be better characterized as “failure of information.” Henderson closes with a set of prescriptions for bringing a more equitable economics to the personal level, one that, among other things, asks us to step outside routine—eat less meat, drive less—and become active in forcing corporations (and politicians) to be better citizens.
A readable, persuasive argument that our ways of doing business will have to change if we are to prosper—or even survive.Pub Date: May 1, 2020
ISBN: 978-1-5417-3015-1
Page Count: 336
Publisher: PublicAffairs
Review Posted Online: Feb. 16, 2020
Kirkus Reviews Issue: March 15, 2020
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