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54 of 56 people found the following review helpful
5.0 out of 5 stars Wy read 'Freakonomics' when you can read this?, December 18, 2009
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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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Showing 1-4 of 4 posts in this discussion
Initial post: Mar 16, 2011 3:02:49 PM PDT
superb, economic writing, insightful probing of key complex concepts -both stated and implied, apt contrast w/Freakonomics.
Thank you

Posted on Apr 26, 2011 7:38:11 PM PDT
D. S. Perrin says:
I find it astounding that so many people believe that we are living under a free market. It is crony capitalism, bargain basement socialism, casino captalism, central planning, and many other things, but it is not a market, and far from free. Those of us who believe in economic freedom have proposed policies (consistent with the rule of law), to prevent the destruction of our environment and they are much more "efficient" than those proposed by any of our environmental agencies.

A free market can only occur in a free society. It is based upon the rule of law, not of men - like we have today. It is NOT a free-for-all as many seem to think.

Economic freedom is based upon cooperation, not force. There are no "little totalitarians" running around forcing everyone to follow their directions that we may go down their path to the way and the truth and the light and if we don't agree, then off to the gas chambers we go!

If you want to find a free market, you certainly won't find it on Wall Street!

In reply to an earlier post on Jul 31, 2012 7:05:13 PM PDT
Jeff Little says:
I agree and disagree with the free market comment. I agree that it is astounding that many people believe we live in a free market, but I think the requirement for a free market is something other than freedom, just like I think that the requirement for rain to spread evenly on a plain is something other than lack of an existing ditch. The first drop, where-ever it lands will start to cut a groove and you have already lost equality. The key goal is to not preserve ultimate market freedom, but rather to curb the worst excesses and try to take advantage of increasing physical efficiency while minimizing monopoly lock-in and increasing wealth inequality.

I certainly agree that you won't find a free market on Wall Street today.

In reply to an earlier post on Nov 5, 2012 2:51:29 AM PST
Last edited by the author on Nov 5, 2012 2:52:41 AM PST
@Daniel S. Perrin

Yes, reality has utterly failed the free market.

Humans have failed capitalism.

Seriously, how on earth do you imagine your desiderata would ever come into existence? How would these "laws" appear without "men" (sic) actually getting their partial fingerprints all over them? And how would something so Procrustean it has never appeared anywhere constitute "freedom"?
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