A Few Good Words

There are good reasons to call economics the "dismal science." Economists, Steven Rhoads jokes, see a bittersweet quality in the groundbreaking of a new community center. They might brood: "By spending money here and not elsewhere, we give up the mobile heart units that would save four lives a year, a remedial reading program ... [etc., etc.]" (22). This may be technically true. But isn't this view of life a little ... inhuman? Rhoads approvingly quotes Kenneth Boulding: "No one would want his daughter to marry an economic man, one who counted every cost and asked for every reward, [and] was never afflicted with mad generosity or uncalculating love" (34). Czech philosopher Zdeněk Neubauer suggests something similar when he argues "price is unholy."¹  Economists are suspicious of single-minded devotion to single goals at the expense of others. Because opportunity costs are everywhere, they will usually emphasize marginal investments in p...

Good economists use simple principles to transform our decision making in profound ways. Chapter 2 of The Economist's View of the World  unpacks what is, perhaps, the key insight of economics:   "spending and regulatory decisions that use scarce resources or require their use incur costs in terms of forgone alternatives" (11).  This is the concept economists call "opportunity costs." Every time we allocate a scarce resource in one way, we lose the chance to allocate that resource in other ways. Is that really so insightful?  If you're about to stop reading because this seems blindingly obvious, Rhoads then shows that few politicians or experts in other fields have properly absorbed this lesson. Rhoads quotes a representative city administrator explaining how his town budgets: "We give primary considerations to the public welfare, but cost considerations are also important" (12). This may sound humane, but to an economist it is nonsense. Costs...

I plan to re-read  The Economist's View of the World  by Steven Rhoads   this summer. First, an introduction. The Economist's View of the World is among my favorite reads on economics. Originally published in 1985, Rhoads' reflections have aged well. His work is humanistic in the best sense of the word, pausing to consider nuances of the human experience that many other economists would ignore (Chapter 3, on marginalism, reflects on a Wordsworth poem at length). For Parts I and II of the book, Rhoads defends the discipline of economics against misguided critics. In Part III, though, he suggests that the "economist's view of the world" misunderstands key elements of human life and society. The complaint that economists put too much faith in calculators and base their models on unrealistic assumptions about human nature is hardly unique to Rhoads -- it's been made frequently in books and think-pieces from all over the political and intellectual spectrum...

Expect in this space: Posts about books I'm reading as I (slowly) process them. Reflections on topics I teach (Economics, Artificial Intelligence, Philosophy, and US History). Responses or summaries of other pieces that grab my attention. Many sentences and paragraphs that would offend Messrs. Strunk &White. Frequent sabbaticals.