June 23, 2007


My husband came home from work with a small book called A Student's Guide to Economics. He breezed through it, since he's taken more econ classes than one human should take, and handed it to me. It's a little 50-pager about the evolution of economic trends from Adam Smith to Milton Friedman. I thought it was fascinating and quite accessible, so I thought I'd mention it here in case someone else is interested in an afternoon of light economics reading!

My favorite passages came from the section "Ignorance and Self-Interest," in which Heyne writes about people who propose policy as if they were "Aristotelian gods":

They grossly underestimate the amount of detailed knowledge that has to be used to provide food and housing for the inhabitants of a city; to assure enough but not too many physicians, plumbers, poets, and airline pilots; to make electricity and telephone service available to everyone; to maintain processes of discovery that will provide new and valuable answers to old problems of discomfort, disease, and disaster.
The dramatic failure of socialism that could no longer be denied at the end of the twentieth century was not, as many seem to believe, a consequence of the fact that people are selfish and put their own interests ahead of the interests of society. It was a consequence of the fact that no one is omniscient. We put our own interests ahead of the interests of most of those with whom we interact because we know what our own interests are, but do not even know the identities of most of the people with whom we cooperate every day.
The basic principles of economics will not be readily understood or appreciated by people who believe that economic theory explains the operation of an essentially immoral society, one governed by selfishness or dominated by the desire of "material welfare" rather than "human welfare." ... People who talk this way literally do not know what they are talking about.

Mmmmm. And there's more deliciousness where that came from.

Posted by Sarah at June 23, 2007 09:57 PM | TrackBack

that sounds fascinating! thanks for sharing.

Posted by: Butterfly Wife at June 24, 2007 01:06 PM

An interesting example of "omniscience" thinking in Amity Schlaes' new book, "The Forgotten Man," which is about the Great Depression. She quotes Stuart Chase, an American intellectual who visited the Soviet Union in 1927:

"Sixteen men in Moscow today are attempting one of the most audacious economic experiments in history...they are laying down the industrial future of 146 million people and of one-sixth of the land area of the world for fifteen years....These sixteen men salt down the whole economic life of 146 million people for a year in advance a calmly as a Glouscester man salts down his fish."

Chase clearly thought that this was an excellent way to do things.

Posted by: david foster at June 25, 2007 12:06 PM

Good site. Thank you!!!

Posted by: british dragon steroid at July 12, 2007 03:32 PM

Good site. Thanks:-)

Posted by: buy anabolic steroid at July 12, 2007 05:47 PM

Very good site. Thanks!

Posted by: steroid in baseball at July 12, 2007 07:50 PM