Monday, February 1, 2010

The Armchair Economist, by Steven E. Landsburg

This is a required book for one of my classes this semester. We are supposed to focus on a few particular chapters, but I read the whole thing for two reasons: 1) I enjoy economics (which is still true, a little more than one semester into my program), and 2) I wanted credit for reading the pages this year. I expect my reading is going to drop off a lot this year, so I need to take pages where I can get them.

I enjoyed the book. Because it is written to be accessible to someone with little to no economic background, large parts of it were things I already knew. This isn't to say, "I'm as smart as Landsburg!" I'm just saying why my response to it is somewhat muted, but I would bet a person with little to no economic background would enjoy the book much more.

Even so, there were some things that were new to me, and those were great to discover. His argument that, when a fixed resource is owned by no one, the economic gains of that resource are discarded was enlightening. I think the main point my professor wanted us to learn was the proper way to conduct cost-benefit analysis, particularly in answering Landsburg's question, "Do we have too much or too little illiteracy?"

Landsburg can be quite humorous and self-deprecating, as when he writes:

Economic theory predicts that you are not enjoying this book as much as you thought you would.... [Y]ou chose it because it was one of the few available books that you expected to be among the very best. Unfortunately, that makes it one of the few available books whose quality you are most likely to have overestimated. Under the circumstances, to read it is to court disappointment. (174)
Maybe that analysis doesn't apply to me since I had to read it and bought it online for four or five dollars.

Landsburg can overdo the humor, though, when he uses it to criticize the logical shortcomings of others. His critique of an article in the Atlantic Monthly just comes off as mean-spirited. He partially explains the invective when he later writes of the New York Times "the Times recognizes that assertions about chemistry or physics should be disciplined by some fundamental understanding of the subject, but it fails to recognize that the same is true of economics" (122). To me, the Times has a policy to print any crackpot economic theory it can get its hands on (fake cough--Paul Krugman--fake cough). Landsburg is merciless in his critique of crackpot economic theory. He's not a dick; he's just passionate about economics. Unfortunately, sometimes they read the same.

But the book was worth the read (at least to me) for the following idea:

When Republican and Democratic legislators meet to "hammer out a compromise," they are engaging in an activity that could land any of their private-sector counterparts in jail. We do not allow the presidents of United and American Airlines to hammer out compromises regarding airfares. Why do we allow the majority and minority leaders of the Congress to hammer out compromises regarding tax policy? (147)
As hard as I thought it would be, I think I just found someone who hates the government even more than I do, but somehow doesn't live in a shack in the woods with survival manuals.

I guess I do the book a disservice by saying it's for people with little background in economics. For those who have an extensive background based on NPR and Paul Krugman, this book is an indispensible antidote.

Rating: 6 out of 7 giant inflatable monkeys.

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