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Why ‘Simple Economics’ Is Often Wrong, and Other Book Recommendations for the Econ Lover in Your Life

Newspaper article

Why ‘Simple Economics’ Is Often Wrong, and Other Book Recommendations for the Econ Lover in Your Life

Article excerpt

You may have spent Thanksgiving enduring fervent arguments about the economy and economic policy. Since it is the Christmas season and time to think about gifts, here are some books on economics and the economy for your consideration.

Books on economics and economic history

Do you know someone who relentlessly says, “It’s just simple economics,” or “It’s just supply and demand?” Give them “Economism: Bad Economics and the Rise of Inequality.” James Kwak takes the reader on a tour of basic economics, generally, and supply and demand, in particular. He then shows how slavishly applying introductory concepts to everything (economism) leads pundits, politicians and policymakers astray on topics ranging from taxes and minimum wages to financial markets and health care.

Kwak does this demonstrating how economists start with simple models but then build on the basics to understand our world. For instance, simple models may “prove” that a minimum wage is harmful, but models that introduce additional factors attenuate, and in some cases overturn, this result. (By the way, a text that pursues this topic more deeply is “The Inner Lives of Markets: How People Shape Them and They Shape Us.” Ray Fisman and Tim Sullivan dive into the nitty gritty of how economists model market transactions in a lively and erudite style. )

A leading economic historian, Joel Mokyr, tackles the classic question, “how did the West grow rich?” in “A Culture of Growth: The Origins of the Modern Economy.” He sets out the problem in the book’s first paragraph: “The world is richer today than it has ever been.” Yet, “what remains very much a mystery is why.” Mokyr’s answer is that “above all, modern economic growth or ‘the Great Enrichment’ depended on a set of radical changes in beliefs, values, and preferences — a set I will refer to as ‘culture’ despite the many justified concerns about the over-usage and ambiguity of that term.”

But what about steam engines, and coal, and colonization and all the other technologies and events you learned about in your high school or college world history course? They are all here, but Mokyr weaves a narrative that puts all of it in the context of changes in the ways people started approaching the world in radical new ways, what he calls the development of “useful knowledge” that today we take for granted.

If the person for whom you're shopping likes big, heavy books (we all know people like this) then pair "A Culture of Growth" with Deirdre McCloskey’s “Bourgeois Equality: How Ideas, Not Capital or Institutions, Enriched the World. …

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