“I learned very early on, even before I came to L.A., that no one ever hired me again because I did something cheap or fast. That doesn’t happen in my profession. The triangle has cheap at the top, fast on one corner, and good on the other. pick two. That’s pretty much what you have to do.”
Yet another example that good economic thinking doesn’t always come from economists.
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Continuing this blog’s annual tradition (2009, 2010, 2011, 2012), here are capsule reviews of all the books I read this year. Only books read all the way through are included. Unless stated otherwise, I enjoyed them all and recommend them. Hopefully you’ll find something here that catches your eye; do feel free to share back in the comments or via email.
John Allison – The Financial Crisis and the Free Market Cure
The first two thirds or so are nuts-and-bolts policy analysis, argued clearly and directly. The final third is more philosophical. This book may not exude charisma, but what it lacks in flash it more than makes up for in substance and clarity. One of the best books about the financial crisis.
Dominick T. Armentano – Antitrust: The Case for Repeal (2nd edition)
Rather strident in tone for my taste. Even so, this is a concise, clear, and valuable summary of how antitrust laws undermine the competitive process, rather than enhance it; intentions are not results. The link goes to a free PDF version.
Bernard Bailyn – The Barbarous Years: The Peopling of British North America: The Conflict of Civilizations, 1600-1675
This appropriately titled book gives a painstakingly thorough treatment of the first permanent European settlements by region from the Carolinas to the Chesapeake, to New Amsterdam/New York, and on up to New England. It also gives a thorough treatment of the Native Americans they displaced. Almost without exception, people back then lived hard, short, and shockingly violent lives.
Radley Balko – Rise of the Warrior Cop: The Militarization of America’s Police Forces
An important book by one of my favorite journalists. A long process has given America’s police forces a SWAT team-mentality towards even non-violent offenses. This change was mainly driven by the drug war, but also by seizing on catastrophic events such as the 1965 Watts riots, the 1999 Columbine massacre, and of course, 9/11. The consequences are, on a daily basis, quite literally life and death.
Yoram Bauman and Grady Klein – The Cartoon Introduction to Economics, Volume Two: Macroeconomics
This is a wonderful approach to popularizing economics, and Bauman and Klein have mastered it. Volume 1 neglected trade in favor of game theory; trade gets its due here. The authors give both spontaneous order and constructivist perspectives a fair say on a range of issues, but they neglect to apply public choice and knowledge problem concerns in their carbon tax cheerleading towards the end. Even so, highly recommended for anyone interested in learning more about economics.
“Joe Biden” – The President of Vice The Onion’s 2012 election coverage portrayed Biden as a hard-living, cash-strapped, Trans Am-driving burnout who happened to be vice president. This short e-book is that fictionalized Biden’s autobiography. It’s a one-note symphony, but taken in small doses, it is quite funny.
Daniel Boorstin – The Discoverers
An erudite history of innovation, discovery, openness, progress, and science that, as one reviewer put it, reads a bit like an adventure story. The section on sea exploration, discovering the New World, and establishing trade routes to the East is especially vivid.
Geoffrey Brennan and James Buchanan – The Reason of Rules
After explaining the important difference between acting within rules and acting to change the rules, they show that rule changes are necessary for reforming everything from deficit spending to the tax code. As a bonus, they build a model in which a flat income tax gives a more equal income distribution than a progressive income tax. The book relies too heavily on homo economicus for my taste, but contains many valuable insights. Both authors are deep and careful thinkers.
Jason Brennan – Libertarianism: What Everyone Needs to Know
In this quick-reading book, Brennan asks and briefly answers 105 questions about libertarianism, covering everything from the war on drugs to the positive-negative rights distinction to the many different flavors of libertarianism.
Rex Brown with Mark Eglinton – Official Truth, 101 Proof: The Inside Story of Pantera
Some parts could have come straight from the “Joe Biden” memoir above. Rex is also much more venal than his laid-back image would suggest. Even so, this was a heartfelt, honest read about one of my favorite bands from back in the day.
James Buchanan – Better Than Plowing and Other Personal Essays
Buchanan, who died earlier this year, published this collection a few years after he won the economics Nobel. It was partially intended as a way to shrug off reporters. Besides the expected autobiographical details–the title alludes to his rural upbringing–it contains many nuggets of economic, professional, and personal wisdom. An example of a life well lived.
James Buchanan – The Limits of Liberty: Between Anarchy and Leviathan
Buchanan described this book as his most successful attempt at a one-volume summation of his research program. He distinguishes between constitutional and post-constitutional analysis. The first studies the rules of the game and how they are decided upon, and the second studies how people behave once those rules are in place. Political reforms that fail to account for both phases will turn out rather differently than intended.
James Buchanan and Gordon Tullock – The Calculus of Consent: Logical Foundations of Constitutional Democracy
One of the founding documents of public choice theory, which applies economic methodology to politics. Buchanan and Tullock emphasize methodological individualism, and reject treating groups as the relevant unit of analysis. They also set unanimity as an ideal decision-making benchmark, as opposed to simple majority rule. Their insight that logrolling (vote-trading) is a market behavior was revolutionary.
James Buchanan and Richard Wagner – Democracy in Deficit: The Political Legacy of Lord Keynes
When Keynes and his followers ended the old time fiscal religion’s taboo on deficits and inflation, politicians celebrated. Voters like getting stuff from the government, but dislike paying the requisite taxes. Successful politicians could now cater to both of these contradictory preferences through deficit spending and inflation. They won’t stop until the prevailing fiscal ideology changes back, but Buchanan and Wagner also propose institution-level fixes such as a balanced budget amendment.
Christopher Buckley – Boomsday
A fiscal satire, of all things. The young protagonist jokingly proposes fixing the entitlement crisis by giving tax incentives to baby boomers for voluntarily killing themselves (“transitioning”) by age 70, thus saving younger taxpayers from having to support them. The fun begins when people start taking her idea seriously.
Robert Burton – On Being Certain: Believing You Are Right Even When You’re Not
Certainty is a long-time interest of mine. Burton, a medical doctor, goes into the physiological, neurological, and psychological reasons why people are irrationally sure of themselves. The section on the evolutionary benefits of capital-C Certainty is particularly enlightening, but the later discussion of faith-vs.-science is tiresome. The book could have used a treatment of more earthly ideological certainty instead.
Robert A. Caro – Master of the Senate: The Years of Lyndon Johnson III
Caro takes more than 1,000 pages to cover Johnson’s 12 years in the Senate. And yet this book is an exciting, dramatic read. Its heart is the fight for the 1957 civil rights act — the first such bill the Senate had passed in 82 years, during Reconstruction.
Robert A. Caro – The Passage of Power: The Years of Lyndon Johnson IV
Covers Johnson’s vice presidency, the Kennedy assassination, and the first seven weeks of his presidency. Johnson used the assassination crisis to quickly pass almost the entirety of Kennedy’s remaining legislative agenda, and much else besides. An effective, if wholly unintentional rebuttal to Naomi Klein’s Shock Doctrine.
Rory Carroll – Comandante: Hugo Chávez’s Venezuela
Neither a left-wing hagiography nor a right-wing hatchet job. This book is more about painting a vivid picture of Chávez, Venezuela, and its people than constructing a narrative history. While the reader’s sense of chronology suffers, Carroll’s approach also makes the book nearly impossible to put down. Coincidentally, it was released just two days after Chávez’s death was announced.
Ronald H. Coase – Essays on Economics and Economists
Coase died this year at age 102. This collection opens with Coase’s Nobel lecture and continues with essays on methodology, mathematicization, and the role economics can play in enhancing human understanding. The second half consists of biographical sketches of Adam Smith, Alfred Marshall, Arnold Plant, George Stigler, and other economic luminaries. Coase knew many of them personally.
Ronald H. Coase – The Firm, the Market, and the Law
This collection includes Coase’s most influential essays, including “The Nature of the Firm,” “The Problem of Social Cost,” and “The Lighthouse in Economics.” The other material is certainly worthy of inclusion, but I wish it had also included “The Federal Communications Commission,” which introduced the idea of wireless spectrum auctions that the FCC currently (sort of) uses. So far as I know, that widely cited article remains relegated to JSTOR.
Gregory Cochran and Henry Harpending – The 10,000 Year Explosion: How Civilization Accelerated Human Evolution
Evolution did not stop when civilization began. Instead, the authors argue that human evolution has actually accelerated 100-fold since the Agricultural Revolution, and they back it up impressively. They even theorize that natural selection may have played a part in why the Industrial Revolution happened when it did, which is of particular interest to this reader.
Rich Cohen – Monsters: The 1985 Chicago Bears and the Wild Heart of Football
My grandfather lent this to me. Even as a Packer fan, I greatly enjoyed it. The focus is on the 1985 championship team, but it also contains a quality history of the franchise going all the way back to team founder George Halas’ childhood. A good rivalry has two worthy opponents, and this book made me see the Bears in a new light. As Sun Tzu said, know your enemy.
Susan Crawford – Captive Audience
Not recommended. The author argues that the Internet has become a near-monopoly, and government should regulate it as a public utility, like a power plant or a waterworks. The harried tone borders on conspiracy theorizing, at times almost comically so. In particular, Crawford’s prediction of Netflix’s imminent doom at Comcast’s hands is so far turning out to be rather inaccurate.
Dan Daly – The National Forgotten League: Entertaining Stories and Observations from Pro Football’s First Fifty Years
An offbeat history of pro football from its small-town 1920s beginnings through the 1960s, when the AFL and NFL both commanded national attention. The main attraction is its collection of humorous stories and anecdotes, and quotes from the game’s most colorful early personalities. But there is also a strong narrative component about the game’s evolution from primitive, run-oriented single-wing offenses run in front of small crowds to the T-formation variations that still dominate today’s pass-happy game in packed stadiums and on national tv.
Frank Dikötter – The Tragedy of Liberation: A History of the Chinese Revolution 1945-1957
I could only read this book in small chunks; it was too much to bear. Dikötter has done more than construct a standard historical narrative. In addition to archival work, he interviewed survivors, giving their names and telling their stories in their own words. The old saying about one death being a tragedy and a million deaths being a statistic is uncomfortably true. This book, in a way that the Black Book of Communism does not, humanizes one of the world’s saddest statistics.
Rolf Dobelli – The Art of Thinking Clearly
Dobelli, a Swiss novelist and entrepreneur, gives a light-hearted yet thoughtful treatment of common fallacies and mental mistakes. The book has 99 chapters covering 99 fallacies, though each is only a few pages long. Reads quickly, but its lessons are worth thinking over carefully; this book is best taken in small doses.
Donald Driver – Driven: From Homeless to Hero, My Journeys On and Off Lambeau Field
Something of a victory lap for Driver, a Packer great who retired after the 2012 season. He overcame a rough upbringing to become Green Bay’s all-time leading wide receiver, a Super Bowl champion, and a family man. He also won the popular Dancing with the Stars television show, an accomplishment in which he takes great pride.
Brian Fagan – Cro-Magnon: How the Ice Age Gave Birth to the First Modern Humans
Fagan is a wonderful popularizer, as capable of painting pictures with words as he is at explaining the latest scientific advances in archaeology. An excellent read about a subject that I very much enjoy, but rarely delve into. Highly recommended.
D.X. Ferris – Slayer’s Reign in Blood
An in-depth look at the personalities, creative process, context, and larger cultural importance of my favorite album by one of my favorite bands–and one of the few that has stood the test of time from adolescence to adulthood.
Don Gulbrandsen – Green Bay Packers: The Complete Illustrated History – Third Edition
This book gives in-depth coverage to Green Bay’s three eras of greatness — Curly Lambeau’s six championships in the team’s early years, Lombardi’s five championships in the 1960s, and the current 20-plus-year run that began with team president Bob Harlan, GM Ron Wolf, coach Mike Holmgren, and QB Brett Favre. This edition concludes with the Packers’ record-setting 13th championship under the current Ted Thompson-Mike McCarthy-Aaron Rodgers triumvirate. Just as important, the book also gives plenty of attention to the fallow years in between.
F.A. Hayek (W.W. Bartley III and Stephen Kresge, eds.) – The Trend of Economic Thinking: Essays on Political Economists and Economic History
The third volume of Hayek’s collected works. This volume is a collection of historical essays and lectures with a focus on monetary theory, many of which date back to Hayek’s early years at the London School of Economics in the 1920s and 1930s. Also contains biographical sketches of Richard Cantillon, Henry Thornton, Hermann Heinrich Gossen, Hume, Bacon, Adam Smith, and Bernard Mandeville. The link goes to a free PDF version.
Peter Hook – Unknown Pleasures: Inside Joy Division
Caustic, yet poignant. Joy Division’s bassist, not always the most sympathetic character, chronicles the band’s unfinished rise. Fortunately, their music lives on.
Arnold Kling – The Three Languages of Politics
In this short ebook, Kling outlines his three-axis model, which explains why people of different ideologies talk past each other, and rarely to each other. Progressives largely see the world through an oppressor-oppressed axis, conservatives through a civilization-barbarism axis, and libertarians through a freedom-coercion axis. The three types can look at the same data and draw three completely different conclusions. This deserves a fuller treatment, which I hope Kling will give in the near future.
Lawrence Krauss – The Physics of Star Trek
A bit of good fun to accompany the release of the new Star Trek movie in May. I unfortunately read the older edition from 1995, which is quite dated in places; physics advances quickly. The link goes to the newer 2007 edition.
John Locke – Second Treatise of Government
It’s good to revisit the classics. The tone of this particular classic is much more revolutionary than I remembered. I no longer wonder why Locke had his troubles with the authorities.
Edward Lopez and Wayne Leighton – Madmen, Intellectuals, and Academic Scribblers: The Economic Engine of Political Change
The first two thirds of the book are a layman-friendly (and highly recommended) tour of political philosophy from Plato to the Enlightenment, and of economics from Adam Smith to James Buchanan. The remainder shows that political change happens much the same way economic change does: a mix of fortuitous circumstances and active, opportunistic entrepreneurship. The authors coin the term “political entrepreneur” to describe effective change agents.
Ludwig von Mises – Interventionism: An Economic Analysis
Written in 1940, after World War II began, but before the U.S. entered the fray. Mises, an Austrian Jew who narrowly escaped the Nazis, argues that Britain, France, and the other Allies would have been in a better position to defeat Germany–or prevent war altogether–if they had not economically weakened themselves in the interwar years with interventionist policies. Some arguments prefigure Hayek’s Road to Serfdom, which came out four years later.
Albert Mudrian – Choosing Death: The Improbable History of Death Metal and Grindcore
A quality oral history of extreme metal. The author interviewed more than 100 people for this book, and it is mostly their words. The book is especially strong on the early days, but loses its way by 2000 or so. It contains no mention of several major bands, including Meshuggah and Lamb of God. Other major bands, such as Fear Factory, have cameos at best. This is a good book for fans of the genre, but it may be time for an updated edition.
Tom G. Palmer (ed.) – Why Liberty?
Tom accurately describes this book as a “snack tray for the mind.” This quick-reading collection of short essays by a variety of mostly young scholars is the fourth in Students for Liberty‘s annual series. It looks at the idea of liberty from the perspectives of history, philosophy, policy, the arts, economics, and more. The link goes to a free PDF version.
Steven Pinker – The Better Angels of Our Nature: Why Violence Has Declined
Probably the most thought-provoking book in this list not authored by Jim Buchanan. Pinker shows with abundant data that for several millennia now, humanity has become progressively less violent over time, both in degree and in kind. Despite a 1960s-70s blip with echoes lasting into the 1990s, the trend continues to this day. Pinker’s many theories as to how this came about range from genetic change to the rise of commerce and bourgeois values to an environmentally-caused improvement in abstract reasoning capabilities (and relatedly, empathy).
George H. Smith – The System of Liberty: Themes in the History of Classical Liberalism
Smith, a top-flight political philosopher and intellectual historian, surveys the major themes and debates in liberal thought. He also clears up common misconceptions and smears, such as the conflation of individualism with atomism, and Herbert Spencer’s use of the term “survival of the fittest.” Smith treats the usual big names like Locke, Hobbes, and Mill, but also introduces several lesser-known thinkers such as Thomas Hodgskin, William Graham Sumner, and Georg Simmel. This is the kind of book that rewards re-reading, which is a compliment I certainly intend to pay this excellent work.
John B. Taylor – Getting Off Track: How Government Actions and Interventions Caused, Prolonged, and Worsened the Financial Crisis
When the financial crisis first hit, most people thought the cause was a liquidity crunch, because that is what caused the Great Depression. Taylor was one of the first to show that the crisis was instead caused by too much risk. Liquidity-oriented policies such as ad hoc bailouts and stimulus made the crisis worse by causing uncertainty while leaving the original risk problem untreated. One quibble: at one point he calls a counterfactual analysis “empirical,” which strikes this reviewer as literally impossible. Otherwise highly recommended.
John B. Taylor – First Principles: Five Keys to Restoring America’s Prosperity
Without rejecting Getting Off Track‘s data-driven approach, Taylor grounds this book more in philosophical principles. The five he emphasizes are limited government, rule of law, strong incentives, reliance on markets, and predictability. He applies them to a wide suite of issues, from monetary policy to cronyism to health care.
Gordon Tullock (Charles K. Rowley, ed.) – The Selected Works of Gordon Tullock, Volume 1: Virginia Political Economy
An introduction to the sheer breadth of Tullock’s work. The 50 or so collected articles are a case study in economic imperialism. They cover the economics of voting, rent-seeking, politics, legal systems, judicial decisions, anarchy, pollution, crime, and even bioeconomics, which applies economic methodology to the study of nature and animal behavior.
Gordon Tullock (Charles K. Rowley, ed.) – The Selected Works of Gordon Tullock, Volume 5: The Rent-Seeking Society
In economics, rents are outsized profits that go above and beyond a normal rate of return. Rent-seeking is using government to unfairly gain these rents, whether through subsidies, favorable regulations, or other special treatment. This book collects Tullock’s pioneering work on the subject. It is a travesty that he has not won the Nobel.
Kurt Vonnegut – Breakfast of Champions
Vonnegut had a remarkable way of being world-weary and childlike at the same time.
Lawrence Wright – Going Clear: Scientology, Hollywood, and the Prison of Belief
Wright goes well out of his way to be evenhanded, possibly in part because of Scientology’s litigious tendencies. His just-the-facts presentation actually makes the church come off worse. The parts about the Sea Org and the Rehabilitation Project Force are a uniquely American addition to prison literature.
1. You Shouldn’t Have. No, Really. You Shouldn’t Have. The classic salvo in the literature on the economics of Christmas is Joel Waldfogel’s “The Deadweight Loss of Christmas,” which provides a bit of evidence that people would be happier if you gave them cash instead of an equally-expensive present. Yes, it’s the thought that counts, but how many of us have given (or gotten) gifts that have ended up in an end-of-year Goodwill donation or a Spring yard sale?
We learned this first-hand at a family holiday party that involved a white elephant gift exchange. Everyone went home happy, but one participant (an Alabama fan) opened a box of Auburn stuff, another (an Auburn fan) opened Alabama stuff, and one of the gifts I (an Alabama fan) opened was an LSU cap. Again, everything worked out in the end, but the initial distribution was incredibly inefficient.
No man is an island. Economics is based on that fact. You can’t make an exchange, and markets cannot emerge, with solitary people leading solitary lives. Evolution bears this out. Our predecessors, from at least Australopithecus on down, lived in bands and tribes. Not alone. They lived, loved, ate, fought, and died together. We are evolved to need each other.
Rousseau, who died over 70 years before Darwin’s Origin of Species, thought differently. His Original Man in the state of nature assumes away our innate social tendencies. From his false premises come many of his false conclusions:
He [Rousseau] begins with a portrait of natural man as a solitary animal devoid of reason and speech, a being whose limited needs can be easily satisfied without depending on anyone, whose soul is restricted to the sole sentiment of his existence without any idea of the future, as near as it may be.
In a recent NBC interview, President Obama blamed ATMs for taking away bank tellers’ jobs, and computerized airline check-in kiosks for eliminating aviation jobs. Communications Coordinator Lee Doren points out that innovation doesn’t affect the number of jobs so much as the types of jobs. Accomplishing more while using less labor is actually the key to prosperity. People looking for an explanation for today’s high unemployment need to look elsewhere.
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Posted onApril 12, 2011|Comments Off on The Environmental-Industrial Complex
Sometimes the green part of green regulations isn’t the environment. It’s money.
Economics says that people act according to their incentives. Public choice theorists say that politicians and regulators also act according to their incentives — just like the rest of us. Those incentives include maximizing agency budgets and winning elections.
This short video from Reason.tv shows public choice theory in action:
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And hence it is, that to feel much for others and little for ourselves, that to restrain our selfish, and to indulge our benevolent affections, constitutes the perfection of human nature; and can alone produce among mankind that harmony of sentiments and passions in which consists their whole grace and propriety.
That sentence is more important to understanding how markets work than most people realize. The ability to feel empathy is part of what makes us human. It is also what makes market economies possible.
Without empathy, killing the customer would be at least as common as serving him. Mutual exchange — trade — is an act of peace. That wouldn’t be possible without the human ability to put ourselves in others’ shoes and feel for them. After all, it’s a lot easier to hit someone and take their stuff. And yet few people do. Empathy is a big reason why.
Adam Smith was one perceptive guy. Others have filled in gaps in his thought, and proven him wrong on some details. That does not take away from the fact that he was as perceptive as any thinker in history.
May we suggest one way to get those jobs back: No more automation. Ban the use of computers for data processing. Imagine how much information flows through today’s global economy in an average day. Computers handle most of the load. That costs millions of jobs.
The effects would reverberate far beyond the tech sector. The paper, pen, and pencil industries would also boom.
Companies are dead-set on doing more with less. True, that creates more jobs in the long run by freeing up resources — and employees — for new ventures. But if only they would consider doing less with more, they could create more data processing jobs.
Ryan Young and Ryan Radia
Competitive Enterprise Institute