THE ARMCHAIR ECONOMIST

An economics professor's sometimes charming, sometimes glib, always counterintuitive guide to evaluating the small anomalies of daily life in a free-market society. In a series of interchangeable chapters, Landsburg (University of Rochester) asks questions like: Why do laws mandating use of seat belts increase the rate of traffic accidents, as statistics show they do? Because, he says, drivers have been given an incentive to drive more quickly and less carefully by being made to feel protected. In the service of what he calls efficient markets, Landsburg argues that wheat farmers, say, ought to be forced to pay damages done to their crops by sparks thrown off from railroad trains, since such damages can be borne more cheaply by farmers than by the railroad companies that are at fault. When analyzing the costs and benefits of legalizing drugs, he admonishes that increased tax revenues from a heretofore untaxable criminal activity are a neutral item; transfer of wealth from individuals to government is never equivalent to the creation of new wealth and may even be a societal drain. In general, Landsburg cheerily points out, economists value efficiency rather than justice, market solutions over legislated compromises, consumption over saving, and the creation of wealth above all else; these principles secretly drive the profession's public analyses of criminal penalties, tax policy, environmental legislation, and the ultimate good of market- based free trade. For all his cleverness, Landsburg never seriously questions the ``neutral'' assumptions of the dismal science—a fact that considerably decreases the value of his book.