From Publishers Weekly
Starred Review.In this shrewd piece of intellectual history, former Boston Globe columnist Warsh shows how two contradictory concepts of Adam Smith-the invisible hand and the division of labor (famously, at a pin factory)-took on lives of their own after their 1776 publication in The Wealth of Nations, and then finally converged in the work of late 20th century economist Paul Romer. In the first half of this book, Warsh gives an entertaining and precise history of economic thought from Smith forward, through the lens of what have come to be two of his key constructs. Warsh's treatment of difficult economic concepts like value is brief but clear and accurate, and he gives equal weight to personalities, institutions and broader social forces. In the second half of the book, Warsh advances the claim that in the 1970s and 80s, when Romer divided economics into people, ideas and things, instead of labor, capital and land, he touched off a revolution in the field, one that is still playing out in now-dominant "New Growth Theory" economics. Warsh does not focus narrowly on Romer's work, but describes the social and institutional framework of modern professional economics: how ideas percolate, how papers are published, how careers advance and how meetings and societies are organized. The book brings sophisticated ideas into a complex story without losing the thread, or the reader's interest.
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Warsh, who had a long-running economics column in theBoston Globe, here journeys through the discipline's history en route to an analysis of an influential 1990 technical paper. Written by Paul Romer, "Endogenous Technological Change" is described by Warsh as mathematically formidable, which is the way modern economists like their fare, begging the question of why its story would be of general interest. First, hundreds of thousands annually enroll in university-level economics courses; second, Romer's paper, pertinent to the information revolution that is our zeitgeist, is clearly explained by Warsh; and third, Warsh reveals the occupation of economics to the benefit of those who aspire to it. After historical exegesis of Adam Smith and his successors, Warsh depicts post-1945 schools of thought, biographically summarizing figures such as monetarist Milton Friedman and Keynesian Robert Solow, and those of Romer's generation now in their career primes. Appraising the intellectual lineage and gestation of Romer's paper, Warsh imparts in a comprehensible way the engagement many have with economic thought. Gilbert Taylor
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