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Category: Economics

Book Review: Naked Money
(Charles Wheelan)

Naked Money, by Charles Wheelan, has a primary goal and two secondary goals.  The primary goal, admirably accomplished, is to simply, but not simplistically, explain monetary policy.  One secondary goal, also well accomplished, is to defend fiat money against those who call for going back to a currency backed by gold or some other physical asset.  The other secondary goal, less well accomplished, is to justify aggressive government action, in particular by central banks, to shore up the American financial system during the 2008 crisis.

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Book Review: The Great Convergence: Information Technology and the New Globalization (Richard Baldwin)

This book mostly claims to be a book about “globalization,” today’s trendy word, but really, it is a book about industrial revolutions through time and space.  The author, Richard Baldwin, offers a new framework for understanding how the world has developed since the Great Divergence, led by England, that created centuries-long worldwide economic dominance by European cultures.  In particular, he offers an explanation why, since 1990, the relative share of the global economic pie held by the West has decreased, when it had never decreased before.  All this is interesting and valuable, in particular Baldwin’s conclusion that American critics of globalization are at least partially correct.  But it’s incomplete in the end, since Baldwin’s analysis completely omits the critical role of culture and institutions as related to a country’s capacity to develop.  Instead, he treats all humans as interchangeable members of homo economicus:  a fatal error, but one common to academic economists.

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Book Review: Nature’s Metropolis: Chicago and the Great West
(William Cronon)

This is a fantastic book that well deserves its reputation as a classic.  Part history, part sociological study, part economic analysis, and part ecological survey, William Cronon examines the growth of Chicago by studying the city’s 19th Century relationship to the larger “Great West” (more or less the once-sparsely settled regions between the Ohio River Valley and the Pacific).  He does this by analyzing, in fascinating detail, the city and its surrounding territory in three areas:  transportation (water and rail), physical commodities (grain, lumber, and meat), and capital.  For each topic, he focuses both narrowly on how each developed and changed over time, and more broadly on how each affected the city and the larger Great West.  I suppose to some this sounds boring—but as far as I’m concerned Cronon nearly magically retains the reader’s interest throughout.

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Book Review: Strangers in Their Own Land: Anger and Mourning on the American Right (Arlie Hochschild)

Arlie Hochschild has gone the extra mile, and then some, to understand conservatives.  I would say that she exemplifies the (pseudo-) Indian saying, “Never criticize a man until you’ve walked a mile in his moccasins,” except that is not politically correct, so I will not say it.  Nonetheless, Hochshild has spent a lot of time and effort genuinely trying to understand a group of Louisiana conservatives, and the result is a very interesting book.  Sure, it’s not perfect, in part because Hochschild, like most of us, can’t fully overcome her own biases that sometimes lead her to engage in unsophisticated analysis.  But she is never once contemptuous or patronizing of these people, whom she seems to really regard as her friends, and she never caricatures the individuals, who actually vary from each other quite a bit.  This enables her to, overall, do an excellent job (and a better job than Joan Williams in the more recent White Working Class, which covers very similar topics in an obtuse way).

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Book Review: White Working Class
(Joan Williams)

Joan Williams wants to “Overcome Class Cluelessness in America.”  This is an admirable goal, and in many ways this is an admirable book (or brochure—it’s very short).  But reading White Working Class (which, despite its title, gives equal time to both the white and black working class) makes the reader squirm.  The reader appreciates the author’s, Joan Williams’s, attempts to objectively examine her class, that of the “professional-management elite,” or “PME,” but winces at her frequent inability to actually understand the working class, or to view the working class other than primarily as potential foot soldiers in the march of progressive politics.

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Book Review: The Great Divergence (Kenneth Pomeranz)

It is hardly news that the West has led the world economically for the past 200 years, or more.  This superiority (let’s be honest—that’s what it is) academics commonly call the “Great Divergence,” a term coined by Samuel Huntington in 1996, though the study of Western economic superiority began much earlier.  There are many sub-questions one can ask—e.g., what constitutes “the West”?  Is it England?  England and parts of the Continent?  How does America fit in?  When exactly did this takeoff begin?  Are other countries now catching up, or even passing, the West?  But these sub-questions are all small change compared to the most important question—why did the West diverge from the rest of the world at all, when all of world history up to that time exemplified the Malthusian Trap, where productivity increased too slowly to increase per capita output even when aggregate output increased?

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Book Review: Average Is Over
(Tyler Cowen)

Tyler Cowen is a popular economist, known for an influential blog (Marginal Revolution) and a set of books on economics directed at a general audience.  In Average Is Over, a book from 2013, Cowen predicts an American future of increased economic (and thus social) division, as new technology enables those most conversant with it to profit, and forces others to be paid less as they become relatively less productive.  This is a common historical occurrence, of course, where those whose skills are no longer valued by the market, from hand weavers to buggy whip makers to floppy disk craftsmen, must ultimately retire or retool, often never regaining their previous income, though the economy as a whole, and thus average and median income, expand in the long run despite short- and medium-term pain and dislocations.  The difference in Cowen’s analysis is that he forecasts a permanent division, the result of ever-improving radically new technology and the failure of some, or many, to properly orient themselves with respect to that technology.

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Book Review: The Mandibles: A Family, 2029-2047 (Lionel Shriver)

I’m a sucker for apocalyptic fiction.  Probably, similar to many doom-and-gloom conservatives, deep down I see myself as bestriding the Apocalypse like a colossus, Bible in my left hand and short-barreled AR-15 in my right.  Of course, intellectually I realize that actual apocalypses are very, very bad for everyone involved, so my self-image is buried deep in my id, not a goal I have set for myself.  Moreover, my strong belief is that, while it may not be evident yet, the era of apocalyptic fiction is ending, to be replaced by a new literature of optimism and pursuit of excellence.  A few months ago, I thought that switch would be quick and smooth.  Now, I suspect it will happen slowly over piles of bodies, with the only question being how tall those piles will be.  In the meantime, though, we can enjoy The Mandibles, Lionel Shriver’s excellent, and mostly pessimistic, book about the near future collapse of America.

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Book Review: Food City (Joy Santlofer)

Food City, by the late Joy Santlofer, shows us the amazing history of manufacturing, in this case food manufacturing, in New York City.  Nowadays we don’t associate New York with manufacturing, but as recently as 1950, it was one of the largest manufacturing centers in the country.  Reading about this lost past is a fascinating exercise, even if there is much less manufacturing in the city today.

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Book Review: How An Economy Grows And Why It Crashes (Peter Schiff)

For the past few years, I’ve started thinking of basic economics through the prism of a thought experiment.  This involves starting all analysis by considering twenty people sitting around on the savanna, each with literally nothing except his or her ability to work.  This frame is highly instructive, because it allows the thinker to easily understand certain economics concepts, including, most importantly, that producing what others want is the only way to advance beyond subsistence.  As Henry Hazlitt said, “The poor are poor not because something is withheld from them but because, for whatever reason, they are not producing enough.”  This is as true for an entire modern society as it is for twenty people in the state of nature.

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