Do the better angels of our nature demand double-digit profit? For a soft-path, smart refutation, Kwak’s book is just the...
A spry manifesto that dismantles the many suppositions of modern economic theory.
The fundamental duty of a corporation is to increase the wealth of its shareholders, is it not? It’s in all the economics textbooks, and it rolls off the tongue of financial journalists and talking heads, all defended by the supply curve and the ineluctable laws of elasticity of demand. As Kwak (Business Law and Corporate Finance/Univ. of Connecticut School of Law; co-author: White House Burning: The Founding Fathers, Our National Debt, and Why It Matters to You, 2012, etc.) writes, “this is why Economics 101 has become the preferred conceptual vocabulary for people who defend and even celebrate the high levels of inequality in the rich world today.” Economics as it is now taught, Kwak charges, is not really economics at all but economism, a near-religious, certainly ideological belief system on par with communism and other -isms in providing all the answers a believer would ever need. Some of the author’s criticisms are aimed at the larger greedhead culture that thrives due to economism; some of them, too, are aimed at the discipline of economics itself, which uses such things as the demand curve to justify things as reprehensible as price gouging in times of emergency. The author excoriates economics for its mathematical soullessness and its lack of attention to “historical context, critical thinking or real-world applications,” as a survey of undergraduate programs put it. He even manages to do a nice takedown, along the way, of the Leibnizian notion that this is the best of all possible worlds; for surely, he asks, there must be something better than “consumer surplus plus producer surplus.” Indeed, as he argues, the world cannot turn on economics alone, and the notion of economism that the aim of all life is to increase wealth carries the prospect of social harm.
Do the better angels of our nature demand double-digit profit? For a soft-path, smart refutation, Kwak’s book is just the ticket.Pub Date: Jan. 10, 2017
ISBN: 978-1-101-87119-5
Page Count: 192
Publisher: Pantheon
Review Posted Online: Oct. 19, 2016
Kirkus Reviews Issue: Nov. 1, 2016
BOOK REVIEW
BOOK REVIEW
Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our...
A psychologist and Nobel Prize winner summarizes and synthesizes the recent decades of research on intuition and systematic thinking.
The author of several scholarly texts, Kahneman (Emeritus Psychology and Public Affairs/Princeton Univ.) now offers general readers not just the findings of psychological research but also a better understanding of how research questions arise and how scholars systematically frame and answer them. He begins with the distinction between System 1 and System 2 mental operations, the former referring to quick, automatic thought, the latter to more effortful, overt thinking. We rely heavily, writes, on System 1, resorting to the higher-energy System 2 only when we need or want to. Kahneman continually refers to System 2 as “lazy”: We don’t want to think rigorously about something. The author then explores the nuances of our two-system minds, showing how they perform in various situations. Psychological experiments have repeatedly revealed that our intuitions are generally wrong, that our assessments are based on biases and that our System 1 hates doubt and despises ambiguity. Kahneman largely avoids jargon; when he does use some (“heuristics,” for example), he argues that such terms really ought to join our everyday vocabulary. He reviews many fundamental concepts in psychology and statistics (regression to the mean, the narrative fallacy, the optimistic bias), showing how they relate to his overall concerns about how we think and why we make the decisions that we do. Some of the later chapters (dealing with risk-taking and statistics and probabilities) are denser than others (some readers may resent such demands on System 2!), but the passages that deal with the economic and political implications of the research are gripping.
Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our minds.Pub Date: Nov. 1, 2011
ISBN: 978-0-374-27563-1
Page Count: 512
Publisher: Farrar, Straus and Giroux
Review Posted Online: Sept. 3, 2011
Kirkus Reviews Issue: Sept. 15, 2011
BOOK REVIEW
IN THE NEWS
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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