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102 of 116 people found the following review helpful
5.0 out of 5 stars Tour the mind of an economist
If you're remotely interested in economics, you should read this book; it's a hoot.

Not too many books on economics could be described as a "hoot." But Steven Landsburg, an economics professor at the University of Chicago when he wrote this book (now he's at the University of Rochester), has a delightfully sharp sense of humor and a gift for clear,...
Published on August 6, 2001 by John S. Ryan

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96 of 121 people found the following review helpful
3.0 out of 5 stars sometimes misses the point of opposing arguments
Landsburg's book is entertaining and often witty, and written in a conversational, easy-to-read style. The book is very good at presenting often unintuitive and novel (to the non-economist) ways of looking at things. This is an invaluable book for pointing out common fallacies in arguments about deficits, inflation, unemployment, and other major political issues. At the...
Published on December 12, 2004 by James J. Lippard


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102 of 116 people found the following review helpful
5.0 out of 5 stars Tour the mind of an economist, August 6, 2001
This review is from: Armchair Economist: Economics & Everyday Life (Paperback)
If you're remotely interested in economics, you should read this book; it's a hoot.

Not too many books on economics could be described as a "hoot." But Steven Landsburg, an economics professor at the University of Chicago when he wrote this book (now he's at the University of Rochester), has a delightfully sharp sense of humor and a gift for clear, logical exposition. He also doesn't in the least mind naming names when it comes to egregious economic fallacies and the people who commit them: he keeps a "Sound and Fury file" consisting of economic gaffes from the op-ed pages and he devotes a chapter to exposing the culprits.

His theme is easily stated, and he states it on the first page: the substance of economic science is that people respond to incentives. "The rest," he writes in deliberate imitation of Rabbi Hillel, "is commentary."

Landsburg fills the rest of the book with such commentary. His witty and occasionally sarcastic exposition deals neatly with such topics as why recycling paper doesn't really save trees; why certain statistics are not reliable measures of the "income gap" between rich and poor; why the GNP is not an especially accurate measure of national wealth; why unemployment isn't necessarily a bad thing; why taxes _are_ a bad thing; why real economists don't care about what's "good for the economy" or endorse the pursuit of monetary profit apart from personal happiness; and lots of other points that will no doubt be profoundly irritating to people who just _know_ he _can't possibly_ be right.

For example, Landsburg is delightfully allergic to the claims of the "environmental" movement and recognizes it quite clearly as a strongly moralistic religion. And contrary to the opinions of some not terribly careful readers, he does distinguish firmly between the actual harm caused by pollution and the psychic harm caused by (e.g.) the use of automobiles to people who object in principle to such technology.

Interestingly, Landsburg recognizes a problem here for his own cost-benefit approach: if economic efficiency with regard to utilitarian/consequentialist goods and bads were really the whole story, he notes, he should care about _both_ the physical harm and the psychic harm, and yet he doesn't.

Which leads neatly into the other notable feature of this volume: Landsburg is stunningly forthright about the nature -- and the limits -- of cost-benefit analysis. Unlike some economists who like to pretend such analysis is value-free and involves no commitment to any particular view of morality, Landsburg is clear that cost-benefit analysis is quite unambiguously committed to one particular moral outlook (which he characterizes and describes very neatly). And he is keenly aware of its limitations, though he is not at all confident about what should replace it.

The problem, roughly, is this (the following characterization is mine, not his). As Landsburg notes several times, cost-benefit analysis does not regard "theft" as a cost, since it merely transfers existing stuff from one person to another; society is no worse off on net after the theft than before it. (Of course theft entails _further_ costs that _do_ leave society worse off, but that's not the point here.) Economics, as Landsburg describes it, looks only at _outcomes_ and not at how we got to them. And even at that, it looks only at one abstract feature of such outcomes, namely, how much "good" there is in the aggregate.

And yet most of us would say that "society" _is_ somehow worse off after a theft -- that there is some sort of "moral cost" involved in the theft itself quite apart from its further consequences, and that it makes a difference whose "good" is rightfully achieved or acquired and whose is not. (Some of us might even say that there is something illegitimate in comparing the thief's gain to the victim's loss in the first place.) In ordinary moral discourse, it matters very much how we arrived at a given state of affairs.

If so, then economic science has two choices (this is still my opinion, not his). (1) It can throw those "moral costs" into the mix and deal with "rights and wrongs" in the same way it deals with "goods and bads." In that case, the total "good" will take account of the number and quality of right acts vs. wrong acts. (2) It can ignore those "moral costs" and continue as before.

In either case, economic science _as Landsburg presents it_ is simply insufficient as a guide to policy decisions. (Landsburg tends to acknowledge this, maintaining only that cost-benefit analysis is an important _part_ of whatever it is we need to make policy decisions.) And it is certainly not -- as Landsburg also recognizes in a wonderfully forthright chapter -- sufficient as a guide to personal conduct.

So this volume gets five stars even though Landsburg doesn't have much to say about what should supplement cost-benefit analysis. It's a terrific introduction to economic thinking genreally, and it's also a clear and frank recognition of the limitations of such thinking at least as practiced by many mainstream economists.
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96 of 121 people found the following review helpful
3.0 out of 5 stars sometimes misses the point of opposing arguments, December 12, 2004
This review is from: Armchair Economist: Economics & Everyday Life (Paperback)
Landsburg's book is entertaining and often witty, and written in a conversational, easy-to-read style. The book is very good at presenting often unintuitive and novel (to the non-economist) ways of looking at things. This is an invaluable book for pointing out common fallacies in arguments about deficits, inflation, unemployment, and other major political issues. At the same time, however, I can't help but think that Landsburg occasional misses significant relevant issues, most glaringly in the final chapter on environmentalism. For example, Landsburg describes a case where Jack wants a woodland at the expense of Jill's parking space and vice versa, and argues that the desires are exactly symmetrical. While environmentalists claim that the wilderness should take precedence "because a decision to pave is 'irrevocable'", Landsburg says "a decision _not_ to pave is _equally_ irrevocable" because "Unless we pave today, my opportunity to park tomorrow is lost as irretrievably as tomorrow itself will be lost" (p. 224). While this is correct, this misses the environmentalist's point that it is much easier to convert woodland to parking lot than to do the reverse. The environmentalist fears taking actions that are irrevocable in the sense that they cannot be undone in the future. Landsburg's perspective throughout the book seems to me to ignore the possibility of actions taken which may have consequences which may adversely effect the very existence of mankind (or economic institutions).

Another example in the same chapter is when he suggests that the best way for environmentalists to support the existence of cattle is to eat beef: "If you want ranchers to keep a lot of cattle, you should eat a lot of beef" (p. 225). This presumes that environmentalists care about the number of cattle in existence, irrespective of their living conditions. Would Landsburg have told abolitionists during the Civil War to buy more cotton as a way of improving the plight of slaves?

Yet a third example in the same chapter is about preservation of the Amazon rain forest, because a new species of monkey was discovered there in October 1992. Landsburg writes that this gives him reason _not_ to preserve the rain forest, since he "lived a long time without knowing about this monkey and never missed it" (p. 226). Would he make the same argument if it was a tribe of people whose existence depended on the rain forest rather than a species of monkey? If not, then he's missing the point of those who argue that animals (or the environment) have inherent value. It is clear from his writing that he disagrees, yet his own position does assign inherent value to the interests of people and so is not neutral. He seems to admit at the end of this chapter--in the letter he wrote to his child's teacher--that his view on environmentalism amounts to a religious view that is not subject to discussion (just as he thinks environmentalism itself amounts to a religion being inappropriately taught to his child).

Despite my complaints, I found the book as a whole to be entertaining and informative, and would recommend it along with David Friedman's _Law's Order_ (I haven't read Friedman's _Hidden Order_) for insight into economic analysis of issues of the day.
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12 of 13 people found the following review helpful
3.0 out of 5 stars Delightfully thought-provoking but uneven, April 23, 2002
By 
David P. Caldwell (Cleveland Heights, Ohio, USA) - See all my reviews
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This review is from: Armchair Economist: Economics & Everyday Life (Paperback)
"Why do rock concerts sell out in minutes -- couldn't the promoters raise the ticket prices?" "Why does movie popcorn cost so much?" "How much harm is caused by government debt?" "Why is it hard to measure inflation? Output? The rich/poor gap?"
This book is a series of loosely organized essays about "how economists think." The target audience appears to be people like myself, who are interested in economics, but are not highly trained in the field. It's a good companion to "The Economics of Public Issues," which focuses on real-world illustrations of basic economic concepts. This book focuses on how to approach analyzing the real world for yourself.
According to the Introduction, many of the essays have grown out of discussions Landsburg had with his regular lunch group ... and what lunches those must have been! Questions are raised, and explanations batted about and critiqued. Assuming that Landsburg is a typical economist, the book succeeds spectacularly in illustrating "how economists think." Many of the essays retain what must have been the original feel of the lunchtime debates (ideas are raised, then criticized, then rejected or refined) -- a form which sheds considerable light upon how economists approach problems. The essay about why economists are sometimes wrong is very enlightening. It describes why economists thought that unemployment and inflation were inversely related -- until government started acting on that assumption, which destroyed the relationship. While I'm not very good at macroeconomics, Landsburg's explanation of this is simple and persuasive, and creates more insights into how the study of economics works.
As a series of essays, some are better than others. Landsburg slips easily between making arguments about issues to making assertions about issues. Since the target audience is amateurs like myself, it's a little hard for an untrained reader to critically evaluate the assertions, but (after much head-scratching) I think some of them are flawed. Landsburg clearly feels strongly about some topics, and it's possible that when he gets worked up about an issue he loses some of his open-mindedness. The essay on environmentalism beats up on environmentalist excess but provides little in the way of alternatives. (I worked for an environmental group at one point; Landsburg's critiques are largely accurate but veer off-topic and illuminate little.) He ridicules several prominent public figures (Felix Rohaytn, extensively, and several US presidential candidates from 1984-1992) for making statements reflecting economic illiteracy, but fails to address the issue: the public's economic illiteracy would instantly render unelectable a candidate who said the things Landsburg says.
Still, distilling several years of what must have been stimulating lunchtime discussions into a book which can be read in a few hours is a valuable service. The reading is easy, the topics are accessible (for the most part), and the thinking is clear. Also, since these essays came from leisure time, they successfully communicate some of the joy of studying economic issues.
The book feels like one long lunch with a great group. The more standoffish, angrier essays were concentrated near the end, so they feel like one guest had had one too many martinis and should go home rather than back to work. But they'd still be worth eating with again.
(N.B. Landsburg has a monthly column for Slate, if you'd like to sample some of his writing or you liked this book and want more.)
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11 of 14 people found the following review helpful
4.0 out of 5 stars a perspective-altering study demonstrating its own limits, April 23, 2001
By 
Matthew Tomich (Basel, Switzerland) - See all my reviews
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This review is from: Armchair Economist: Economics & Everyday Life (Paperback)
Enough has already been said about the perspective on economics that this book gives, and how it can give laypersons a good insight into the thought processes behind economic analysis. This review is in regards to the final chapter, an out-of-place editorial tirade entitled "Why I Am Not An Environmentalist: The Science of Economics Versus the Religion of Ecology." (This chapter can be taken as an editorial afterthought since, unlike the other twenty-three chapters, it lacks any listed academic sources in the appendix.)
It's possible that this final chapter on the evils of environmentalism is a clever satire not unlike Swift's "A Modest Proposal" (that the author himself references in chapter 15). Or maybe he's merely speaking point blank about his own ideas. Regardless, whether Landsburg intends to or not, he writes the perfect final chapter to a survey of economics: he exhibits the limits of the applicability of economic theory.
What he either demonstrates or merely fails to take into account is that some things have worth beyond their immediate market value. Forests and other natural resources have consequence outside their economically-quantifiable use for paper or recreation. What Landsburg shows is that economics, which explains behavior though simplified models, falls short at the point where it fails to take into account actions that alter the world that contains the model itself.
The ease and comfort (and the world that it takes place in) that economists are attempting to maximize through consumption is put at risk by that consumption itself. Explain the point through models, put a market value on trees, put a market value on oxygen, and use natural resources for their greatest economic potential, but if the ecosystem breaks down, it doesn't matter what the interest rate or money supply is; life quality will be inextractably decreased for the model world as a whole. If you prefer cleaner air, maybe you can move to a higher priced neighborhood as Landsburg suggests, but unless you're moving to another planet, there won't be a piece of real estate that is unaffected from the effects of environmental degredation. The economic model presented in this chapter fails to take this result into account.
But it's not likely that Landsburg's beliefs are a satire. The letter that he sends to his child's preschool against their recycling program only mirrors the fanaticism and righteousness that he rallies against when he uses the analogy of an academic curriculum that includes environmentalism being akin to forced religious conversion.
One of the most telling points of Landsburg's ignorance on the subject is that he continually confuses 'ecology' (a true science, arguably stronger in its hard scientific analysis and ability to predict outcomes than the social science of economics) with 'environmentalism', a social movement. Perhaps Landsburg should best stick to popcorn and avoid showing his ignorance of biology.
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3 of 3 people found the following review helpful
4.0 out of 5 stars Eloquent, Concise, Occasionally Oversimplified, January 20, 2006
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This review is from: Armchair Economist: Economics & Everyday Life (Paperback)
This short and eloquent book does a mostly excellent job of explaining to non-economists how economic reasoning works in a wide variety of mostly non-financial areas. But it's frustrating how he can get so much right but still demonstrate many annoying oversimplifications that economists' biases make them prone to.

For example, on page 145 he claims that a trash collection company could cheaply prohibit Styrofoam peanuts in the trash by checking everyone's trash once a year and fining violators $100,000. But anyone who thinks about the economics of such fines will be able to imagine massive costs from people disputing who is responsible for peanuts in the trash. Maybe there are cultures in which such fines would ensure negligible violations, but there are probably as many cultures in which disputes over people putting peanuts in someone else's trash cans would produce more waste than the peanuts do.

His suggestion of applying antitrust laws to politicians is almost right, but ignores the public choice problems of ensuring that laws marketed as antitrust laws do anything to prevent monopoly. The details of antitrust laws are complex and boring enough that few people other than special interests pay attention to them, so special interests are able to twist the details to turn the laws into forces that protect monopolies.

On page 183 he says "Flood the economy with money and the nominal interest rate goes up in lockstep with inflation". Given a sufficiently long-term perspective, this is an arguably decent approximation. But he's disputing the common sense of a typical reporter who is more interested in a short-term perspective under which those changes clearly do not happen in lockstep (on page 216 he provides hints at a theory of why there's a delayed reaction).

He makes some good points about the similarities between environmentalism and religion, but it seems these points blind him to non-religious motives behind environmentalism. He says on page 227 about relocating polluting industries: "To most economists, this is a self-evident opportunity to make not just Americans but everybody better off." Maybe if he included a payoff to the U.S. workers whose jobs went overseas, this conclusion would be plausible. But it's hard enough to figure out how such a payoff should be determined that I suspect he simply ignored that problem.
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3 of 3 people found the following review helpful
3.0 out of 5 stars 3 1/2 stars - Very good but a couple of damaging flaws, August 10, 2007
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This review is from: Armchair Economist: Economics & Everyday Life (Paperback)
This is a very good book for those looking to learn fundamental economic principles and the way they are applied in practical terms every day. Some of the analysis is deft and subtle and surprising while in other places he either ignores practical behaviour (he assumes that people consume an evening at the movies without regard to the movie being shown and that popcorn eaters always eat popcorn and make their movie decisions based on this). Most surprising is his abandonment of economic principles during his alarming rant against environmentalists and their "hysteria" where he admonishes a primary school teacher for preaching environmental conservation to children. I agree with the fundamental point of not indoctrinating youngsters but Landsburg overreaches and attacks environmental concerns as a form of mass hysteria rather than focusing on the economic principle of negative externalities and their social costs when the overwhelming majority of scientists (and economists for that matter) agree that there is a long term social cost which needs to be addressed by either a forced market (cap and trade for instance) or government regulation (less desirable from an economists standpoint). A good book though and he would be a lively, convivial and intelligent dinner guest at an intellectual banquet.
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20 of 27 people found the following review helpful
5.0 out of 5 stars Thoughtful, entertaining, and right on the money, January 6, 2000
By 
M. P. Barry (The Woodlands, TX) - See all my reviews
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This review is from: Armchair Economist: Economics & Everyday Life (Paperback)
Landsburg hits the nail on the head with this book. I was looking for a short and to the point explanation of economics for the benefit of my 17 year old daughter when I picked up this book and found that and more. His premise is that "people respond to incentives and the rest is just commentary." Landsburg takes off from there and explains economic concepts with simple but apt examples and deflates quite a few myths in the process(using no formulas or complicated math in his presentation but including endnotes with references for readers inclined to look behind the words).
College students would do well to read through this book before plunging into macro- or micro- economics because it puts the theory into perspective with real world examples and stories. Everyone else can benefit from having a better understanding of how our economy works.
I highly recommend this book as informative, thoughtfully written, and thoroughly entertaining.
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89 of 127 people found the following review helpful
1.0 out of 5 stars Not a good introduction to economics, January 18, 2004
By 
Derek Jensen (Bremen, IN USA) - See all my reviews
This review is from: Armchair Economist: Economics & Everyday Life (Paperback)
Landsburg apparently sets out to explain real-world, everyday economics phenomena (the subititle is "Economics & Everyday Life" and the cover has every-day examples) but proceeds to merely use real-world, every-day examples to show that economics is inscrutable and political. He fails to actually reach any conclusions about most of the scenarios on the cover--or any others, for that matter--and continually concocts loaded scenarios that enable him to reach bizarre conclusions. The worst part about this technique is that it leaves the reader continually baffled--knowing that his conclusions are wrong but not sure why.
Landsburg is best when he is talking directly about economics and worst when he applies theories of economics to law, science, and the environment.
He concludes that air pollution is great because it makes a city so unlivable that poor people can afford it, ignoring the fact that real-world cities are always more expensive to live in than the (unpolluted) countryside and that cities--polluted or not--always contain lots of poor people and rich people.
Landsburg claims that we shouldn't elect the best candidate for senator because that person's productivity is better used in private industry. He fails to take his argument to its logical conclusion and have the country run by autistic children. Apparently, he can't see that the work of a senator also has value and can actually be more beneficial to the economy as a whole than the work of a private businessman.
He goes on to claim that the value of proving scientific theory with experimentation is mainly in giving credibility (and higher salary) to the scientist (it's actually in the economic value being right more often). He claims that there are "high-powered" research firms and "low-powered" research firms so that bad scientists can work at the "low-powered" ones and stay out of the way (high-powered firms are actually for theories with high profit potential, not high correctness potential). This shows that Landsburg thinks that science works like economics: theories don't have to be proven right before they are implemented.
Landsburg's hatred of environmentalism, which is a recurring theme (he ends the book with a letter attacking his daughter's kindergarten teacher), is especially peculiar. He seems unaware that the destruction of flora and fauna is a permanent loss of not just value but a resource to the planet and its people. He argues that the value that could be obtained by destroying it is also lost if it is never destroyed; this is true (it's the definition of "consumption") but there is a fundamental difference between a non-renewable rainforest and a renewable resource like wheat or cows. The rainforest can even provide us with value (exotic plants and animals, tourism, oxygen) without destroying it, making it a renewable resource. Perhaps Landsburg looks out on the Statue of Liberty and bemoans the waste of all that good scrap metal that could be had.
He casually observes that since he never heard of a certain species of monkey, it didn't have much value. Well, that monkey has never heard of Steven Landsburg, but I'm sure that Landsburg and his family would say that the world is still a better place with him than without him. But the monkey and I am not so sure.
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50 of 71 people found the following review helpful
1.0 out of 5 stars the armchair narcissist, perhaps, October 1, 2003
By 
rasputin "zdoc2" (rancho santa fe, ca) - See all my reviews
This review is from: Armchair Economist: Economics & Everyday Life (Paperback)
This may not be the worst book on economics ever written, but it surely ranks among the most narcissitic and self-indulgent.
Landsburg explores through 24 short chapters a number of myths, problems and paradoxes that confront the contemporary economist. The problems in the book fall into two general categories.
First, Landsburg seems far more interested in proving his own cleverness and superiority than presenting useful discourse. Take this example: "In my experience economists are extraordinary in their openness to alternative preferences, life-styles, and opinions." One senses that Landsburg could go on at length about the intellectual and characterological virtues of economists. Mercifully, one can fit only so much self-praise in such a brief volume.
There are other examples, but let one more suffice: "There is an appalling population of otherwise literate adults who prefer the poetry of Rod McKuen to that of William Butler Yeats." He follows this observation with a contrived scenario in which McKuen-lovers buy volumes of Yeats for public display so as to conceal their real preference.
Now mass culture is certainly fair game for criticism, but Landsburg's contempt for anyone not a member of the allegedly superior economist class is so pervasive and mean-spritited that it finally is just offensive. He outdoes even himself in one chapter that is nothing more than a puerile diatribe against environmentalism.
This arrogance might be tolerable if the text were otherwise virtuous. But failures of substance are legion. Many of the "problems" that he addresses are trite or have trivial solutions. There are numerous examples of inconsistency between chapters and, in at least one case, a hypothetical with analysis that disregards its own assumptions. Finally, some of his commentary is simply jejune, as for example his discussion of air pollution in which obvious externalities are somehow ignored.
On the positive side, the book may have some use as a thought-starter; some of the problems posed are thought-provoking. And a pervasive theme -- that obvious solutions to economic problems may well be wrong -- is certainly correct.
The failings here are unfortunate. Economics is a poorly understood science; and that poor understanding has led to misguided social and economic policies. Landsburg had an opportunity to produce a really useful volume here but was diverted by his own attempts at cleverness and self-congratulation. Too bad.
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13 of 18 people found the following review helpful
3.0 out of 5 stars A word from an economics student, May 20, 2000
By A Customer
This review is from: Armchair Economist: Economics & Everyday Life (Paperback)
To be fair, this book has moments that are very funny, some of the funniest I've ever read in economics, and Lansburg provides some economic insights into social problems that are truly enlightening, such as his comments on competition among the sexes for mates, competition among political parties for voter-consumers, and his lucid explanation of what the "random walk" of stock prices really means. However, I could not finish the book for the style in which the ideas are presented. First, the prose is not fluid. Lansburg often wanders in his argumentation, leaving the reader behind to anticipate where he intends to go with his analogies. The result is a lack of transition that makes you want to read the chapters over again to absorb what he is saying. Second, he contrives some overly simple hypotheticals to drive home his points, and these don't even survive a moment's critical reflection. Granted, his economic arguments, however outlandish someone else may think them to be, are correct, but his models are so abstract as to have little relevance in the real world. Most importantly, Lansburg is guilty of making straw men out of his opponents' arguments. More than once Lansburg makes his opponents' arguments into weak, brittle little straw men and then proceeds to hack them apart. Lansburg's arguments are correct and proven in the literature, but he is an argumentative bully. As a final criticism, I would say that a few of the chapters are downright awful.(I wonder if other readers will understand any of it.). On the flipside, Lansburg is very funny, and you won't find any falsehoods in the book. So, my advice is to skip the book, or read discerningly, skimming the poorly written chapters. Economists were never known for their writing ability, but you can probably enjoy a book buy Paul Krugman (Age of Dim., Peddling Prosperity, etc.) a lot more. (Krugman is also more current.) --Lewis Gainor, Mizzou Econ
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Armchair Economist: Economics & Everyday Life
Armchair Economist: Economics & Everyday Life by Steven E. Landsburg (Paperback - March 1, 1995)
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