28 of 28 people found the following review helpful:
5.0 out of 5 stars
Wy read 'Freakonomics' when you can read this?, December 18, 2009
This review is from: Economics for the Rest of Us: Debunking the Science that Makes Life Dismal (Hardcover)
"Freakonomics" was a popular sensation a couple of years ago. Why? Because it used a series of cute anecdotes to show the ingenious ways in which economists can explain virtually any aspect of our lives, including some we don't normally think of us "economic." As if it hadn't been already, "Freakonomics" raised the "dismal science" to cult level, implying that everything can be understood by quantifying it: the clockwork universe of the Enlightenment run amok, sort of.
Thankfully, along comes Moshe Adler with "Economics for the Rest of Us" to debunk that notion. He takes aim at two of the founding myths of modern economic theory and practice, and eviscerates them. One is "Pareto efficiency": the notion that you can't change the rules to alleviate the misery of the poor because it would take away too much from the affluent, and therefore make "the economy" as a whole less efficient. The other is the notion that there is such thing as a quantifiable "marginal product of labor" that determines how much each person earns for his or her labor. (In reality, wages are determined by the workers' bargaining power, which is why management loathes unions.)
Taking off from these two points, Adler raises - and answers - a set of questions far more interesting than anything in "Freakonomics": Are monopolies good or bad? Can public education, for instance, be improved by "throwing money" at it? What's the impact of rent control? What's the impact on employment of a minimum wage? Can low wages cut unemployment during a recession? Why are corporate CEOs so eager to pursue mergers and acquisitions?
Along the way, Adler uncovers some forgotten aspects of economic history. For instance, Adam Smith and David Ricardo, those supposed icons of the ultra-free market, didn't believe in a quantifiable marginal product of labor. They both understood that wages are based on bargaining power. It was later, "neo-classical" economists who fabricated the theory that workers always receive the full value of what they produce: a myth that's hoodwinked even supposedly liberal economists to this day.
Adler signs off with some recommendations for getting us back to economic reality. These include setting the minimum wage at a level where it always constitutes a living wage. But more important, he reminds us of a basic, humbling fact that's been forgotten in our market-obsessed world: "There is really no such thing as 'the economy,' there are only people." What's so terrifically "efficient" about a society that will let people starve and allow the environment to be destroyed rather than violate an abstract economic theory? Fortunately, Adler is here to ask the question and provide some timely answers.
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24 of 26 people found the following review helpful:
5.0 out of 5 stars
A timely rebuke, November 29, 2009
This review is from: Economics for the Rest of Us: Debunking the Science that Makes Life Dismal (Hardcover)
In clear prose and with some well chosen examples, Adler demolishes two of the central tenets of received textbook economics. The first is a justification for social non-action known as the principle of Pareto efficiency. Stated simply, this principle states that on grounds of efficiency, one must be wary of a policy which feeds the hungry, if that policy would reduce the bonus of a Goldman Sachs executive by even one cent. The second is the view that the relative earnings of the rich and the poor are determined by the application of calculus to a technologically determined relationship between inputs and outputs independent, for example, of relative political strength. (For an obvious counter-example, again think Goldman Sachs).
The non economist reader of this book will wonder how such thinking could ever have come to dominate the discipline of economics (Adler provides a nice historical overview). The economist reader will never again think about these two concepts in quite the same way.
If teachers of Econ 1 really want their students to "think for themselves" they will require this book as supplementary reading. But let them be forewarned. Dropping these two principles cuts the legs from a great deal of the psudo-scientific defense of policies which permit the continuation of social injustice, a defense into which many teachers of introductory economics have been co-opted without even knowing that they have been duped.
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6 of 6 people found the following review helpful:
5.0 out of 5 stars
Lively and Eye-Opening and Yes, Fun to Read, June 9, 2010
This review is from: Economics for the Rest of Us: Debunking the Science that Makes Life Dismal (Hardcover)
Moshe Adler takes the reader on a kind of 'insider's' trip through the conventional justifications of how wages are set and why we pay what we do for things, and actually makes it fun to realize how dyspeptic and unnecessary those views are. He makes it seems reasonable to expect that we'll be moving toward a system that's a lot less destructive and that feels a lot better to the masses of individuals that live within our world economy. I'm planning to wait a month and read this book again.
Economics for the Rest of Us: Debunking the Science that Makes Life Dismal
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