Tuesday, October 25, 2011

Economics Made Fascinating

I heard a radio interview of Sylvia Nasar talking about her new book "Grand Pursuit:  The Story of Economic Genius" a few weeks ago and ordered the book because it sounded like the author could make the subject of economics interesting.  I've read a few books on economics and it was always a lot like taking medicine.  I know it is best to get it all down, but I can only swallow so much.

Nasar's previous bestseller was "A Beautiful Mind."  She knows how to tell a story.

When the book arrived, I set it with a stack of other books that I am looking for time to read and forgot about it for a couple weeks.  Sunday afternoon I decided to give the book a glance.  My intention was to read the preface and at most the first chapter, but the book is so well written that I could not put it down.  I read three chapters and 138 pages before I had to stop and fulfill other obligations.

I haven't had time to pick the book up again, but I am honestly eager to do so.  Nasar's forte is storytelling, but woven into her narrative are scores of brief summaries of economic theories and thought-provoking critiques.  Here's an example:
By asserting that labor was the source of all value, Marx claimed that the owner's income -- profit, interest, or managerial salary -- was unearned.  He did not argue that workers did not need capital -- factories, machines, tools, proprietary technology, and the like -- to produce the product.  Rather he argued that the capital the owner made available was nothing more than the product of past labor.  But the owner of any resource -- whether a horse, a house, or cash -- could use it herself.  Arguing, As Marx does, that waiting until tomorrow to consume what could be consumed today, risking one's resources, or managing and organizing a business have no value and therefore deserve no compensation is the same as saying that output can be produced without saving, waiting or taking risks.  This is a secular version of the old Christian argument against interest.

I recommend this book, even before I've finished reading it.


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