Economics Bestsellers

As a person who occasionally buys books from Amazon, and sometimes economics books, I get emails from Amazon listing certain books they would like me to buy.  It is interesting the titles on the list of supposedly “Best Selling Titles in Economics”.  Here is the list of the titles suggested to me:

 

1) In Fed We Trust: Ben Bernanke's War on the Great Panic by David Wessel

2) Shop Class as Soulcraft: An Inquiry Into the Value of Work by Matthew B. Crawford

3) A Colossal Failure of Common Sense: The Inside Story of the Collapse of Lehman Brothers by Lawrence McDonald

4) Freakonomics: A Rogue Economist Explores the Hidden Side of Everything (P.S.) by Steven D. Levitt

5) Animal Spirits: How Human Psychology Drives the Economy, and Why It Matters for Global Capitalism by George A. Akerlof

6) Socialnomics: How social media transforms the way we live and do business by Eric Qualman

7) Nickel and Dimed: On (Not) Getting By in America by Barbara Ehrenreich

8) The Road to Serfdom: Text and Documents--The Definitive Edition (The Collected Works of F. A. Hayek) by F. A. Hayek

 

1 & 3 look for retrospective coherence in the recent financial crisis.

2 actually looks somewhat interesting (I’ll need to read the detailed reviews, etc.

4 is 4.  I tried to read it a while back and never was able tog et anywhere with it.

5 also looks pretty interesting (other than the main title) in that it attempts to show how psychology, something economists dread, may impact economic systems.

6 and 7 look like standard pop-volumes that seek to capitalize on the current events, etc.

 

And 8 is interesting.  Hayek, founding light of the Austrian school.  I summarize the Austrian school as “Economics is so complicated doing nothing is the best thing to do.”  Of course the counter argument, “Economics is really complicated so doing something that appears stupid may not be since nobody can understand the consequences of any actions anyway so let’s try something.”  Dave Snowden http://www.cognitive-edge.com/ has argued for many years that the way to behave on the complex space is similar to the way the military operates when they lack knowledge.  If we have some reasonable understanding of a system we use a Sense – Act – Evaluate strategy.  But in the complex space we should Probe – Sense – Evaluate (a slight change to the words Dave uses).  This obviously argues against a do-nothing strategy and suggests that maybe Roosevelt was correct in the way he conducted his economic program during the Great Depression.

 

So should we follow an academic school based in fear of consequences and also based on economic theology (yup, as compared with philosophy) of the Invisible Hand (BTW – I love Chandler’s Visible Hand idea, sort of blasts things out from under the laissez faire folks out there) or should we conduct ourselves in a far more pragmatic manner, seeking to find mechanisms that have some hope of modifying a broken system?

Comments

[Adrienne]

Ay yi yi, the human element or the massess and as I would argue the public becomes less literate in the true issues (and consequences) and the changes (I'm not sure )in control of discourse by not only politicians but especially sound bite based bloggers - is true pragmatism really possible? Could Roosevelt really have been able to make his changes if comminication and discourse had operated then as it does today? Also, we discussed Chandler's book in my American Economic History class here at Mason and the takeaway was thus: Firms developed based on the Coases's theorem of transaction costs and thus as transaction costs grew (due to natural market growth) the need of the firm grew to minimize both internal and external costs. And the idea of technology was greatly expanded to include everything even human capital (in terms of occupational efforts. Which then leads to the development of the firm "hand" being visible yet based soley on the laissez faire market forces. {That's the best I can do for clarity right now} All to say, I have no answer to your question :)!

PS: I too am intrigued by the Shop Class as SoulCraft - I believe the author was NPR and it sounded interesting - unfortunately I am on lockdown from reading any books not on a syllabus or comp reading list! You will have to let me know.

[Lindsey Bestebreurtje]

I too enjoyed Chandler because I felt like it helped me understand complex economic issues which I may not have otherwise thought of. But I dont think we should try and follow his model today. He couldn't see that managers were people who would make decissions based on their personal beliefs. They were just a perfectly rational block of "managers" to him. We should try to use an acedemic theory rooted in reality and not just throw darts at the wall, but I dont know that Chandler is it. Afterall most of the companies he hailed have since disappeared.

[Dianne Schmidley]

Let us take this "visible-invisible thing a step further. When I worked for Bell before the divestiture, one of the things I realized early on was that Bell was regulated by every federal government agency that had any regulatory authority.

This meant among other things, the obvious: reporting information to the Labor Department under several different programs; Health and Human Services under several different programs; etc. etc. and rest of the alphabet soup including the FCC. And let us not forget the state public utility commissions.

The worst thing of all was that the government was dictating what you could make and sell, and then criticizing you for doing what it said. There was no area that was not subject to criticism. despite of the hype in the news media, this changed very little under Reagan.

The invisible hand of the market place and the visible hand of managers pale in comparison to the tentacles of the federal government.

[Wayne Z.]

My comments on Chandler were mostly directed at the not so explicitly stated (except in the title) attack on laissez faire economics approaches that argue that economics is too complicated to interfere with because there is this faith in the Invisible Hand of the market. Chandler argues the invisible hand went away with the advent of managerialism. Diane appropriately points out, although I am not in necessary agreement with her obvious dislike of governmental regulation,etc., that the role of the government in structuring and even defining markets is pretty clear.

So to argue from the religion of hands off, free market, invisible handedness seems far more an article of faith than based in any analytical considerations. It makes for really good arguments and discussions, but I think it also makes for really crappy policy!

[Dianne Schmidley]

Wayne,

This is not a black and white world, so don't get me wrong. I am not anti-regulatory. My issue is that the right hand of the government does not always (ever?) talk to the left hand. Perhaps the recent mess with the finance institutions is a good example/ Perhaps regulation is the problem, not the solution.

I am more knowledgeable concerning immigration, so let me use that as an example.

The longest law on the books is the tax law, and the second longest is the immigration law. The US Code is only part of the story however. The USC does not specifically address the actual rules and regulations (operational detail) the Executive agencies develop after a bill becomes law.(Perhaps this is why legislators do not bother to read their bills?)

Conflicting parts of the immigration law and other laws that affect immigration, regulations, and political interference all govern outcomes.

Furthermore, Immigration is regulated by the State Department, the Labor Department, Homeland Defense, Commerce, and HHS among others. These agencies are often at odds with each other. In addition, depending on who is in charge at the White House, the laws are interpreted first one way then another, then another. The end result is whip lash for those affected.

Perhaps we need more sunset clauses in our legislation? Perhaps we need less partisan political interference? The Civil Service was established to combat some of the political interference of the past, however, Civil Servants are more at risk from political interference today than ever before.

Based on what I have personally witnessed and others have told me, I think much of this applies to businesses as well as state and local governments.