Customer Reviews

Economics Does Not Lie: A Defense of the Free Market in a Time of Crisis

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First of all, anyone who appreciates Thomas Sowell's clear writing on economic issues will appreciate and should immediately purchase Guy Sorman's Economics Does Not Lie. Like Sowell, Sorman offers clear arguments about the free-markets and reminds us why this system works. In comparison to Sowell, however, who often justifies the free-market system in terms of human nature, i.e. the free-market system "works" because it is congruous with human nature, Sorman emphasizes that the free-market system works, because it does not "lie," i.e. it follows scientific principles that are based on truth and are falsifiable. Finally, what I appreciated about Sorman's book was his "international" perspective. In the first part of his book, Sorman interviews economists around the world (Europe, Scandinavia, Latin America) who share his appreciation of the free-market system. In the second half of his book, Sorman takes us on a whirlwind world tour, demonstrating how countries, like Chile, have benefitted from the application of these principles, whereas, countries, like Argentina, suffer "unnecessarily" from ignoring them.

Well, first off, most of my writing concerns culture and I'm always looking for educational sources that can bolster my knowledge of economics and I certainly found one here in Guy Sorman's defense of the free market. What's the answer to our current crisis? More government spending--no, just kidding. It's allowing the people to keep the money that they earn. That's the true meaning of social justice. We need that mentality instilled in our leadership...now more than ever! Due to my own interests, the last chapter, "Will the Greenhouse Effect Leave Us Broke," was the one I found most valuable. With somehow perfect timing, the House just passed Cap and Steal so Sorman's commentary is very topical. There's no question that leftist attempts to sabotage our economy in the name of saving the world are a total boondoggle and I found his solution--allow for innovation--inspiring. I also thought his deconstruction of Nicholas Stern was outstanding. The whole book is great though.

Economics does not lie is like a timely book. People are moving to roll back the free market amidst crisis, but Sorman provides good reasons to resist this trend. Sorman effectively puts the current crisis in perspective. Does the overall track record of Capitalism warrant large increases in government regulation and spending? Are cycles and periodic crises inevitable?

While I do disagree with some elements of this book, this mostly concerns the type of finer theoretical points that economists find interesting, and most other people find mind-numbing. My guess is that most amazon.com review readers are interested in general conclusions and I have too few disagreements with Sorman on those issues to bother with here. Generally, free market capitalism has a proven track record, despite some obvious faults. Not everyone wants to recognize the overall success of capitalism, but it is true. Not everyone wants to admit that government policy drove the Subprime boom and bust, but its true.

This book is highly readable, well reasoned, and timely. People are learning the wrong lessons from the past decade, and are forgetting the lessons of the past century. Buy EDNL. Read it. Learn from it.

I've been reading quite a few books on economics and the ongoing crisis. This is the best.

There are a fair number of books explaining the current crisis - the causes and and proposed fixes. Most are pretty good, but many seem to be very agenda driven - i.e. lets use the crisis to force some government to spend money fixing our favorite problems. Mr. Sorman write a very calm, well-reasoned and mostly-apolitical explanation of what nearly all economists would agree on.

The chapters on India, China, Brazil and Japan were especially well-thought-through.

Truly one of the best economics books to date. The principles Sorman outlines are nothing new, but the manner and clarity with which he does so certainly is. It demonstrates the necessity of the free market in these troubled economic times. Genius is when the complicated is made simple and clear. Sorman does exactly that.

French economist Guy Sorman has delivered a groundbreaking treatise which debunks several myths about capitalism that have been floating around since our recent financial crisis hit a little over one year ago. In the process, we learn that government intervention of economic policy (i.e. socialism) is the biggest deterrent to economic prosperity; not a failure of capitalism. That's why the Berlin Wall came tumbling down in the late '80s and why the Soviet Union broke apart a couple of years later; they realized capitalism---a free market society---leads to prosperity. They finally got it right.

Certainly, the model being displayed by America and other successful free market societies helped facilitate that dramatic transformation; score one for the Reagan adminstration; our champion of smaller government and bigger economic growth. They weren't called "The Big '80s" for no reason.

In the meantime, nearly a billion people in China, Brazil & India have benefitted from the free market, as a continuing collapse of "state socialism" has fueled this progress. In short, we live in a global free market economy, thanks in large part to the growth of the internet, which has essentially connected the entire world over the past fifteen years; that trend will only grow stronger.

Sorman concludes that the study of economics has recently become more quantitative; in fact, we are now experiencing a scientific revolution in economics. With this comes the understanding that economic cycles---some good & some bad---results from innovation; a process of trial & error which is necessary for a free market economy to flourish. The only detriment to the economic balance of nature is when our leaders enact bad economic policy.

This is a call to action for any free market society. Clearly, socialism doesn't work & big government needs to go on a diet.

I love this book because it tries to explain how economics affects the distribution of wealth to individuals, countries, and regions. It is not about people and their personalities, but about how education and the rule of law govern the capital value of a country. It cites numerous examples of governments injecting excess liquidity into banks, with unintended negative results. It refers briefly to past economic events, but concentrates mostly on current events like the emergence of India and China, the Euro, and in the US.

As the title indicates, this book offers a general case for the free market system. I enjoyed this book for the summary of many different economists work, including Gary Becker, Edward Prescott, Edmund Phelps, Xavier Sala-i-Martin, Daniel Kahneman, and many others. The book also gives an overview of several countries transitions to capitalism, with separate chapters on the Asian Tigers, India, Brazil, China, India, and Turkey. Sorman also explores the relative economic stagnation of Japan and Western Europe. He largely attributes their lack of growth to reductions in the work week and policies which make labor more expensive. Sorman includes an interesting chapter on economics and global warming. The book concludes with a chapter of basic propositions that top economists generally agree on. Overall a very informative book. I wish it spent a bit more time on the current financial crisis, which it does address but not as the main focus of the book. To some extent Sorman appears to see the subprime failure as a result of experiments which didn't end up working, as will inevitably happen in the capitalist process of creative destruction. He does offer a brief critique of federal reserve policy based on the work of Anna Scwartz.

Sorman's book has three major elements:
- a triumphant assertion of the victory of free markets over socialism (fully crediting Chicago-style economics for that victory)
- a sampling of recent economic ideas
- a review of developments in select countries

I enjoyed Sorman's decidedly "fresh water" and French perspective on economics

But Sorman grossly overstates the "science" of new classicalism, which amounts to little more than the assertion that "markets work, leave them alone". Their claim to have built their macro model on microfoundations is hog-wash. Anyone with a passing familiarity with computational economics knows that even simple systems can exhibit wildly complex behavior.

To pick on one "hero" of the book. Ed Prescott seems to have discovered that output per hour is the same in the US and Japan and Europe. Not hugely surprising. But does the shorter work hours in Europe and Japan cause the lower output? Or does the lower output require fewer man-hours? The flow of causality is not clear, and most probably runs from output to jobs. Unless you blithely assume that output creates its own demand. Prescott has explained nothing.

Sorman spends most of the time asserting that markets always work. However, Sorman furtively acknowledges market failures in certain areas:
- the need for government involvement in health care and education
- the need to save the banking system during a crisis

These and other market failures are important. We know that markets usually work well. But there are lots of potential market failures that somehow need to be avoided. The focus of economics should be identifying these market failures and understanding the best way to address them. Markets by themselves are extremely unstable. Clearly, intelligent regulation is required.

Iceland is a perfect example of what happens if you follow naïve market liberalism. The government focused on deregulation and containing inflation. And let the economy drive itself over the cliff. It may take generations for the Icelanders to repay their accumulated debts.

I found huge gaps in Sorman's world view, particularly concerning international economics. I found his analysis of China and his explanation of the crisis in Argentina to be particularly inaccurate. Argentina did not collapse because of fiscal problems; Argentina collapsed because its currency was overvalued. Sorman doesn't like China's institutions. But China is not growing (or not) because of its institutions - China is growing rapidly because it has mastered the art of export-led development, including management of external financial flows. Sorman's assertion that the yuan would fall if the currency became convertible is laughable.

I enjoyed the book. It is well written and full of interesting information. I actually agree with about 70% of what Sorman says. But the 30% where he is wrong is an important 30%.

Read and enjoy, but don't assume that Sorman's conclusions are irrefutable.

As is becoming ever clearer, the US has drifted dangerously far from it's roots in free markets, individual liberty, and personal responsibility. Our preeminence is not an accident but the result of deliberate policies and actions taken over the past 250 years. As our position is now endangered, it is important for concerned citizens to be informed as to the source of our success: the free market.

This book touches on a number of areas in which the free market's success is undisputed. Its is quite readable and I believe anyone with a high-school level of economics understanding will grasp it. The text is well-written and contains numerous references to back up it's assertions. It does, however, have the feel of a book hurriedly completed to coincide with the market's collapse, and could probably have benefited from a bit more editing.

If you're interested in understanding the roots of our prosperity and developing critical analysis of current policy proposals, this book should be on your reading list.