The Economist's View of the World [Paperback]

Steven E. Rhoads (Author)

Book Description

ISBN-10: 0521317649 | ISBN-13: 978-0521317641 | Publication Date: May 31, 1985 | Edition: 1st Ed.

This book explains and assesses the ways in which micro, welfare and benefit-cost economists view the world of public policy. In general terms, microeconomic concepts and models can be seen to appear regularly in the work of political scientists, sociologists and psychologists. As a consequence, these and related concepts and models have now had sufficient time to influence strongly and to extend the range of policy options available to government departments. The central focus of this book is the 'cross-over' from economic modelling to policy implementation, which remains obscure and uncertain. The author outlines the importance of a wider knowledge of microeconomics for improving the effects and orientation of public policy. He also provides a critique of some basic economic assumptions, notably the 'consumer sovereignty principle'. Within this context the reader is in a better position to understand the 'marvellous insights and troubling blindnesses' of economists where often what is controversial politically is not so controversial among economists.

Editorial Reviews

Review

"Steven Rhoads draws from a wide range of sources to survey the views of mainstream economists on how the world works...a wide-ranging and cogent exposition of the state of economics and its relationship to public policy...the author is objective, making his book thought-provoking for both expert and non-expert alike." Cato Policy Report |x x "This is a wise and judicious book. Steven Rhoads is a political scientist who has profited a great deal from learning some economics and seeing how economists apply micro theory to substantive public policy issues." Journal of Economic Literature |x x "Definitely a book that a person who tries seriously to undertake multidisciplinary work between economics and political science ought to confront, for it usefully indicates the many ways one can display narrowness or overlook important causal forces in such endeavors." Roger C. Noll, American Political Science Review

Book Description

This book explains and assesses the ways in which micro, welfare and benefit-cost economists view the world of public policy. The central focus of this book is the 'cross-over' from economic modelling to policy implementation. The author outlines the importance of a wider knowledge of microeconomics for improving the effects and orientation of public policy.

Product Details

• Paperback: 348 pages
• Publisher: Cambridge University Press; 1st Ed. edition (May 31, 1985)
• Language: English
• ISBN-10: 0521317649
• ISBN-13: 978-0521317641
• Product Dimensions: 8.9 x 5.9 x 0.7 inches
• Shipping Weight: 1 pounds (View shipping rates and policies)
• Average Customer Review: 4.0 out of 5 stars  See all reviews (5 customer reviews)
• Amazon Best Sellers Rank: #268,187 in Books (See Top 100 in Books)

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Customer Reviews

Most Helpful Customer Reviews

11 of 11 people found the following review helpful:

4.0 out of 5 stars Sophisticated analysis but lucid reading, April 21, 2000

By 

John C. Mckee "cmckee6" (Spring TX) - See all my reviews
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This review is from: The Economist's View of the World (Paperback)

This is an excellent book. I first read it while doing graduate work in public administration and then read it again as I worked towards a Ph.D. in political science. For the student of public policy, an understanding of economics is critical to understanding the underlying rationale behind many failed as well a succesful governmental initiatives. Further, for the public servant, it casts light on policy design in one's professional work. This book is helpful in both arenas.

The book clealry describes the traditional justifications for government in a market economy, market failure; but also delves into government failure, and the limitations of democratic processes in shaping rational policy.

The book describes other economic concepts; marginalism, opportunity costs, welfare economics, pareto optimality in such a manner as to make their policy relevance very clear.

Underlying this non-technical and jargon free discussion is a well intended (and on-target) critique of the academic discipline of economics. Juxtaposing early economic thinkers with today's calculus driven analysts, Rhoades sees a dearth of span of vision. Technical expertise has overwhelmed broad understanding and mathematical brilliance has driven out a wide breadth of learning.

This is an great book for the serious reader and a must for graduate students in policy, PA or politics.

4 of 4 people found the following review helpful:

5.0 out of 5 stars For Economists and Noneconomists, January 14, 2002

By 

P. Murray (Florida) - See all my reviews
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This review is from: The Economist's View of the World (Paperback)

Rhoads is an effective promoter of the economic way of thinking. He quotes Kenneth Arrow: "the economist's frequent job is to say 'this or that, not both. You can't do both.'" Perhaps owing to his outsider's perspective as a political scientist, he is able to usefully contrast the economic way of thinking with various alternatives. Whereas engineers concentrate on making equipment safer in order to reduce the number of accidents in the workplace, economists would tax each firm based on the number of accidents in its workplace.
Rhoads understands the economic way of thinking well. On regulations aimed at saving lives, he states: "We must weigh in our own minds, using our own standards, the gains forgone elsewhere when money is spent on such programs." On marginalism: "Many doctors will want to use scarce resources to the point where the marginal utility of further expenditures equals zero (`everything possible for my patients'), not to the point where it equals the opportunity cost." He explains the economist's approach to reducing (not eliminating) pollution through taxes on pollution and licenses to pollute. "With the incentive schemes", the advantage is that "the possibility of increasing profits by reducing pollutants remains as long as any taxes are paid or capital is tied up in the marketable effluent licenses, that is, as long as any pollutant remains." The author's knowledge of the literature on the microeconomics of public policy and his explication of it impress this reader.
Although Rhoads proves to be a clear believer in the benefits of a price system, his philosophy is not free market or libertarian. He justifies subsidies for science and art on grounds that appreciation and fondness for those subjects "are higher, more distinctively human, pleasures, but also harder and less enticing initially." A good sentence that describes Rhoads's perspective and why economists and noneconomists might find the book interesting is this: "I think economists should read more outside of economics, but most people should read more within it."

2 of 2 people found the following review helpful:

4.0 out of 5 stars Must read for our elected officials, May 7, 2007

By 

R. E. Bremer (Glen Allen, VA) - See all my reviews
(REAL NAME)   

This review is from: The Economist's View of the World (Paperback)

The Economist's View of the World by Steven E. Rhoads reads like a textbook as it explains and assesses how economists view the world of public policy from various economic viewpoints. Rhoads provides a sound framework for understanding opportunity costs and marginalism as important concepts and economic considerations in making public policy decisions. He also analyzes some basic economic assumptions such as the principle of consumer sovereignty. He then uses these concepts in exploring and debating key issues that the government must deal with in setting policy. The issue of welfare economics and equity is a particularly interesting debate over the right economic distribution of wealth versus the right socially responsible distribution of wealth. Are the economist's view of the right answer and the sociologist's view of the right answer consistent with the public policy maker's view of the right answer? What should guide the public administrator's decision in the debate? The issue of how the government should deal with the economic concept of externalities and cost-benefit analysis is exposed. The issue of how to compensate losers in a policy decision is also exposed and debated. Again, these are important economic concepts that can guide, but not always dictate, the direction of public policy. Throughout the book, Rhoads compares the political way of thinking and the human way of thinking about public issues with the economic way of thinking about those same issues. What may often be controversial politically is not always controversial economically and vice versa.

Rhoads raises an issue about how the lack of microeconomic knowledge among politicians adversely affects the orientation and impact of public policy. He uses a number of meaningful examples to demonstrate his assertions. For example, politicians have established rent control to help the poor afford housing; but we ended up with the unintended consequence of slums, as the rent was not enough for landlords to maintain their property. It is clear that the public would benefit if politicians had a greater knowledge of economic theory when setting public policy. Rhoads, however, does not just single out politicians for their lack of economic knowledge. He also addresses the limits of economics and economic models in guiding public policy decisions. The concept of consumer sovereignty is largely a myth in the face of advertising and other producer influences. The ability to deal with the economics of externalities is not simple when attempting to identify and allocate public costs. Rhoads points out through his discussion that economists could learn more about public policy perspectives to temper their economic models, thinking, and prescriptions. Rhoads is credible in writing about public policy because he is a political scientist by training who is also knowledgeable about economics and objectively critical about its weaknesses.

Rhoads's work is significant because it shines a light on the need to integrate economic theory, sociology, and political science into the understanding and development of public policy. Would politicians make the same public policy decisions if they had at least a basic understanding of marginalism and opportunity costs? Would economists make the same recommendations if they had an appreciation for sociology, political science, and the myth of consumer sovereignty? Many issues that public administrators deal with today are economic issues wrapped up in a political debate. If politicians really understood externalities, would the nature of the political debate change from what actions to regulate to what material incentives would create the desired outcomes? If you assume that one role of a public administrator is to develop good public policy, then you have to agree that politicians need an economic base combined with their social and political experience to write good policy. Rhoads is uniquely qualified to argue this position and does so effectively.