5 comments about The Commanding Heights : The Battle for the World Economy.

1. This book was rather fun to read but I am not convinced that the authors have as deep an understanding of the phenomena they are writing about as they would like the readers to believe. The book reads like a narrative, full of assertions that are not backed by rigorous analysis of hard evidence. The authors do not critically explore causal relationships, nor do they talk about research that has done so. They present only one particular perspective on the unfolding of events, and they do not defend this perspective against potential criticism.
   
   My experience with economics has always reinforced the idea that causality can be difficult to establish, and can often operate in unexpected ways. An economist must proceed skeptically, being careful to explore alternative explanations and being prepared to defend assertions with theory and data. The authors do not seem to share this view, taking instead a more naive approach.
   
   Maybe I was expecting too much; after all this book is meant to be accessible to non-economists. However, making a book more accessible does not necessitate a lack of rigour or the absence of critical thought; the authors could have removed some of the redundancy in the book (their writing is far from concise!) and replaced it with explorations of alternative perspectives. The book would be greatly enriched by adding more discussion of research that supports (or opposes) their views.



2. That's the central message of this book. But to know why it happened, how it happened, and the geographic extent of this outcome, you need to read this fascinating book.
   
   Now if we can just get our own federal government to realize this . . .
   
   Also read what could be a good companion book: The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else



3. &Both the book DVD are excellent. It is one thing to have lived through global change, it is another thing to understand the interconnections and long-term effects. The focus in several countries is a centrally planned or market-driven economy. Chile, Argentina, Bolivia, China and the United Kingdom are examined in detail for their success and failure. The Soviet Union - Russia, tried to retain dictatorial control and continues to have problems. The "Chicago School of Economics" celebrates its wisdom, models and planning in country after country. However, in every country and economics system, the sustainable natural resource base is overlooked. Keynes may be the "father" of market economics, but Keynes is a short-term perspective. We are approaching Peak Oil and Peak Water and 6.6+ billion people all striving for a USA standard of living. The USA standard of living is based on cheap oil and cheap water and we are entering the "Crude Awakening."
   
   Commanding Heights is an appropriate title, reinforced by knowledgeable people from Harvard, Washington DC and around the world. Commanding heights are about to come tumbling down in country after country as human population exceeds carrying capacity and countries compete for resources and food. The authors did an excellent job, but need to follow-up in light of resource, water and food limits.



4. If you want to understand globalization, this book is required reading. This book provides a full overview and history of 20th century globalization. It discusses the economic choices that third-world countries were making in order to become integrated into the first and second-world international trade system. It discusses the international financial institutions, the newly industrializing economies, market economic policies vs. state controlled economies, trade liberalization, trade policy decisions, and global economics and trade. I found this book to be much better than Thomas Friedman's The Lexis and the Olive Tree (which was also excellent). Although, I would also recommend that students of globalization should also read The Lexis and the Olive Tree and all of Thomas L. Friedman's books.
   
   There was a PBS series of the same name (Commanding Heights) that was based on this book. The PBS series is good, but it is not as good as the book. If you like The Commanding Heights book, you will also like Daniel Yergin's previous book called The Prize which is a history of the oil industry. The Prize is also excellent. It is the definitive history of the oil industry. In fact, I believe it is better than Command Heights. Although both books are excellent. The PBS series or special on the oil industry which was based on the book The Prize was excellent, but again it was not as good as the book.



5. A book from Dr. L's class that help to shape my belief in freedom in the marketplace. A very good historical overview of the economics of the middle and late 20th Century. There are wonderful historical explanations of the rise of socialism in the west and communism in the east as well as the two grand economic schools in the west which were the products of Keynes and Hayek.

5 comments about SOCIALISM (Lib Works Ludwig Von Mises PB).

1. It is truly unfortunate that Von Mises is perhaps the most overlooked 20th Century champion of free market capitalism. His brilliant observations have heavily influenced the momentous (and much more revered) works of Friedrich Hayek, as well as subsequent scholars such as Murray Rothbard, Milton Friedman, Thomas Sowell, and others. Von Mises is the one who towers over almost every other laissez-faire economist (except Adam Smith and few others). His insightful formulations devastated the incessant obfuscations of the socialists and demonstrated, once and for all, the comparative benefits of a free market system.
   
   At the heart of SOCIALISM is the argument that economic calculation is impossible without a free market. Von Mises effectively drove home the need for a market price in order to regulate the supply and demand of human society. Recent proposals for socialized medicine completely deny this importance of the price system: if the price of medicine (for consumers) is zero, the demand will be astronomical, and the doctors and other medical personnel will not be capable of effectively meeting such demand. Few proponents of "universal health care" ever address this concern, which colorfully evidences their lack of interest in -- or understanding of -- Von Mises' penetrating contentions.
   
   "The market is a democracy in which every penny gives a right to vote. . . . Every individual is free to disagree with an election campaign or of the market process. But in a democracy he has no other means to alter things than persuasion. If a man were to say: 'I do not like the mayor elected by majority vote; therefore I ask government to replace him by the man I prefer,' one would hardly call him a democrat. But if the same claims are raised with regard to the market, most people are too dull to discover the dictatorial apirations involved." (p. 490) Von Mises had the presence of mind to fully discern the tyrannical motivations behind most calls for a collectivist arrangement. He knew that the grotesque desires of the elite would inevitably eclipse the true inclinations of man. More than an economic dissertation, SOCIALISM was an expression of human justice, as illuminated by the deference the author paid to the individual autonomy of the common man. Respect for the personal choices of others is, after all, the defining characteristic of freedom.
   
   Regardless of the self-serving configurations of the statists and their innumerable followers, the free market works, as evidenced by the fact that even the poor feely partake in such a system and usually enjoy a much higher standard of living than even the average citizen in socialist nations. As the American federal government continues to expand at an alarming rate, we would do well as a society to better familiarize ourselves with the philosophies of Von Mises and his progeny. Reading SOCIALISM would be a start in the right direction. Those of us who have already surveyed the book should recommend it to as many thoughtful (and open-minded) people as we know. Day by day, one person at a time, we can begin to recover and restore our devotion to liberty as a society. As the author of this tremendous book well knew, the voluntary exchange of a free market will almost always be more efficient and preferable than the coercive force of government. The hollow promises of a big, active, all-intrusive state will always lure a great percentage of our soicety -- most of them well-meaning, but averse to logic and evidence -- yet such dreams always provide the essential fuel for despotism. A return to our federalist roots (in which the states are sovereign entities rather than ineffectual subsidiaries of the federal government) and to the free market principles of Smith and Von Mises would serve us well in our on-going struggle against state-sponsored tyranny.



2. This is THE definitive work on the impracticality, impossibility and immorality of socialism. Von Mises, who observed socialism first hand before having to flee his home in Europe, and who lived through the age of great collectivist experiments, has written a simply devastating critique. The (supposed) reader below who wrote the review entitled "Propogating Utopian Fallacies", obviously either has not read the book, or completely misunderstood the entire thing. A more ignorant review of this book can hardly be imagined. He makes several dubious assumptions in his review and attributes them to Von Mises. He makes statements like, "Mises doesn't understand," or "Mises believes" and then proceeds to use these statements to try to refute the idea of free markets. He also fails to apply his own logical excercises to himself. For example he states that if Mises were consistent, he would have rejected all government and not just some collectivist programs. Yet the reviewer seems to be a believer in a half-way system where markets are mixed with socialism, "democracy", and government intervention. I guess he must have a monopoly on believing that governments should do some things and leave others to the anarchy of the market. Anyone familair with the rest of Mises's works and with free market and libertarian theory in general can't help but laugh at the claims he makes. This reviewer clearly does not understand property rights based, modern anarchist theory (as opposed to the Rage Against the Machine variety which he makes reference to), nor does he understand this book. The claims he makes in the last paragraph of his reveiw are so outlandish and naive that they do not even warrant a response. An important lesson can be gained here though. Without some prior (correct) understanding of concepts like markets, anarchy, liberty, the true nature of government, and without some understanding of logical processes, it is easy to fall prey to such overly-simplified arguments. I would recommend along with this book, also reading other books by authors such as Mises, Murray Rothbard, Henry Hazlitt, and F.A. Hayek.



3. October 25th 1817- The Bolsheviks stage a coupe in Petrograd and overthrow the Kerensky regime. For the first time ever Marxists seize control of a major nation. It will be several years before the Bolsheviks overwhelm their opponents within Russia. However, one question demands an answer. Will it work? Can socialism at least match the results of capitalism? The full answer to this question came in 1922- the year that Mises published Socialism, an Economic and Sociological Analysis. Here Mises proved that socialism must fail.
   
   Why must socialism fail? The simple answer is because it lacks private ownership and a market for the means of production. As Mises put it "where there is no market there is no price system, and where there is no price system there can be no economic calculation". The full answer has several parts. First, economic calculation requires functioning financial markets. Second, economic calculation requires actual rivalry in markets. Third, economic calculation requires entrepreneurial alertness to profit opportunities. With these three elements in place monetary calculation of private profit reflects true economic costs. As Mises put it economic calculation "is essentially a matter for the capitalists- the capitalists who buy and sell stocks and shares, who make loans and recover them, who make deposits in the banks and draw them out of the banks again, who speculate in all kinds of commodities". Perpetually changing economic conditions mean that- "it is above all necessary that capital should be withdrawn from particular lines of production, from particular undertakings and concerns and should be applied in other lines of production, in other undertakings and concerns". Speculation in financial markets directs resources to the most urgent consumer demands because the most profitable ventures satisfy consumer demand at the least economic cost. Socialism fails because it lacks speculation that takes place only with entrepreneurial rivalry and exchange in financial markets.
   
   The issue of economic calculation is economic, but Mises also inquired into the political and psychological reasons behind the socialist movement. He also discusses historical and cultural issues. Socialism is a full-scale treatise, comparable to Smith's Wealth of Nations. Some might think that a book from 1922 might have lost its relevance, but this is untrue. Mises explained principles that are as valid today as they were originally. In fact, Socialism is more relevant today than many recent books on economics. This is because Mises dealt with the real life problems of a dynamic economy, while much of modern economics focuses on static models that apply only to imaginary economic conditions.
   
   Socialism is not only Mises' best book; it is one of the greatest works ever written on social theory. Mises addressed vital issues with penetrating analysis and delivered profound results. All those who are serious about political economy should read this book, but only after having read Menger's Principles of Economics, and before reading Hayek's Road to Serfdom. Those who are less ambitious should read a shorter book by Mises- Liberalism in the Classical Tradition. In any case, Socialism is a towering intellectual achievement. Were its arguments more widely understood many of the tragedies of 20th century state socialism might have been avoided. This book remains important today because it explains why we live in an age of unprecedented prosperity, and how we can achieve further progress. To put it simply Socialism is as indispensable to intellectual development as property rights are to economic development.



4. Does anything else need to be said?



5. Mises' Socialism is, perhaps, the most sociologically and economically "sound" theoretical attack on socialism to date. Happily, Dr. Mises' general position has been promulgated in economic journals since the post-war generation, and is the topic of the still relevant "calculation debate." It is not so pleasant that the insights of Mises are largely ignored by the sociology profession (probably because most sociologists continue to be prepossessed by Marxian materialism). However, sociologists who are seduced by the Marxian doctrine will be interested in this theoretical work because it asserts that social life can only be completely transformed, for the worst, under a centrally planned socioeconomic system. Further, Mises' erudition is manifest as he demolishes the work of Karl Marx and other utopians.
   
   The central insight in this text for sociology is that "socialism" must manufacture an "artificial market." That is, a non-private property based market economy where managers will be given incentives in order to perform as private private owners who do business in a socioeconomic system analgous to "rational capitalism." This implication of an overhaul of social institutions (e.g., legal and monetary institutions) is a trenchant one. Hence, the idea of socialism is largely a sociopolitical problem, and one must move outside the perimeters of economic theory in order to address them. And Mises does just that!
   
   The economic and sociological acumen in this work makes the price a steal. I must add, however, that more social scientists outside of economics need to read this tome because one cannot truly understand "society" without an understanding of economics.

5 comments about Seeing What's Next: Using Theories of Innovation to Predict Industry Change.

1. Christensen's two earlier books ("The Innovator's Dilemma," and "The Innovator's Solution") provided great new insights into business history and strategic thinking. "Seeing What's Next" goes on to attempt to demonstrate implementation of these two books' insights, unfortunately with less than total success.
   
   Early in "Seeing What's Next," Christensen uses Dell Computer to illustrate the "Value Chain Evolution" theory's golden rule: Integrate to improve what is "not good enough" (speed, customization, and convenience of PC ordering and acquisition), and outsource what is "more than good enough" (the PC computer's architectural design) - certainly a potentially helpful insight.
   
   "Seeing What's Next" eventually moves on to examining several sectors and making predictions for the future. 1)Education: Christensen sees on-line services from the University of Phoenix (UOP) as an innovation that is likely to disrupt the higher-education market. However, even the UOP has had limited success with this innovation - the vast majority of its services are still provided via bricks-and-mortar classrooms. (Another major UOP problem is that increasing questions are aimed at its credibility - especially the strength of its instructors, and its very low graduation rate.) On the other hand, Christensen probably has it right in seeing community-colleges provide a much greater challenge to pupils currently "over-served" by higher-cost state universities. (This applies to businesses and the general public as well - the vast majority of "research" undertaken at major universities offers very little or no concrete value to society.)
   
   Aviation is another sector examined. Here Christensen sees low-cost Southwest Airlines as in danger of being over-ridden by major airlines - certainly about as far from the ensuing reality as one could get. As for the semiconductor sector - Christensen sees overshot customers (eg. word-processor and spreadsheet users) as becoming vulnerable targets for less expensive/capable processors; again, however, this has been little sign of this. (Christensen's "problem" may be failing to recognize that users want only one operating system/CPU, and that combination should be able to handle most/all existing PC applications. Regardless, it is also noteworthy that Andy Grove, an enthusiastic endorser of Christensen's first two books, does not have an endorsement on this book's back cover.
   
   Healthcare: Christensen observes a "do-it-yourself" trend with home pregnancy tests and glucose monitors. However, both are small components of a relatively trivial healthcare market not likely to sustain major innovation. His third example - cheaper/easier angioplasty replacing cardiac surgery, is an unfortunate one because the latest findings are that angioplasty is not generally an acceptable substitute. Finally, Christensen is totally correct in concluding that many patients are overserved by M.D. providers vs. eg. nurse practitioners - unfortunately, legal constraints are not likely to relax soon in this area. (This also limits "off-shore" provision of X-ray readings, etc., though combining tourism with cheaper Asian healthcare may grow into a much greater market.)
   
   Finally, "Seeing What's Next" considers the wireless communication sector. VOIP is seen as a major challenge - not likely, in my opinion, due to users being physically tied to an on-line computer, and existing wireless providers already able to offer long-distance quite cheaply via national service plans and/or offerings of free calling on weekends and after 7 P.M. during weekdays.
   
   Bottom Line: "Seeing What's Next's" greatest contribution is probably through demonstrating how difficult seeing into the future actually can be.



2. This is certainly a worthwhile read. The concepts are a great mix of grounded theory and in depth information. There are no earth-shattering concepts, or get rich quick schemes, just sound strategy on how to analyze the industry leaders of the future. One concern that is not addressed is how to determine what will be a disruptive innovation and what will be a poor investment. He does encourage readers to look at nonconsumers, and create a product or service that this group would want to consume. However, I can't help but think that behind every failed innovation is a person who thought they had this dialed in. For example, Christensen cites VOIP as likely for cooption by incumbents, and suggests that one way for start ups to prevail is to offer VOIP as a second line. I am in the telecom industry, and do not see this as a viable option. Even he admits that second lines have been in decline for years, but more than that, those that do have second lines are often the most technologically resistant consumers. They are still using dial up or resisting cell phones. The consumers who are likely to use VOIP do not want to add on a second line, they want to replace their landline. This in an example of the idea for disruption still remaining mysterious. However, for those of us whose job it is to navigate the changing environment, not come up with the idea, this book is a must read.



3. Just as Michael Porter is the authority on Strategy, Clayton Christensen has become the authority on Innovation. He has not only created a great business theory, he has created an institution that defines our modern understanding of disruptive innovation. The foundations of his business theory are unimpeachable and the illustrations of the theory across industries are appealing to professionals inside and outside the industry alike.
   
   In this book, Christensen's students expand on the theory first proposed in The Innovator's Dilemma to create a framework that can predict whether an innovation might be disruptive (read. has potential to transform an entire industry or create a new one). The impact of understanding and applying this theory is large.
   
   This book maintains the quality level I have come to expect of books published by HBS press, paralleled only by Harper Business. The illustrations in this book include the Telecommunications, Education, Aviation, Semiconductors and Health Care industries. The book dedicates a couple of chapters that are of international interest: Nonmarket Factors and Innovation Overseas. This whets the appetite but does not quench the thirst for more. In the US business environment where global influence is becoming more and more relevant for future growth, it would make sense for a next book in the series focusing entirely on the overseas perspective.
   
   It is hard to pull off a quality job on part three of a sequel without rock-solid grounding. A keen student, I hope to see a lot more come out of Innosight and the institution of Innovation that is Clayton Christensen.



4. The primary author's first two books were each sensational in their own way--.I was particularly gripped by his description of the throw-away camara as being unattractive to the high-end camara shops, but when adopted by grocery stores, led to the 90% of the non-consumers of high-end camaras getting into photography. The key: low-cost offering for the non-consumers introduced outside the incumbent arena.
   
   That is the heart of this new book, and the addition of two co-authors suggest that the author's vision is spreading.
   
   I actually read the two chapters on education and health care first--the first because my oldest son blew off his senior year in high school at not worthy of his time, and is now racking up community college credits at very low cost (with the same instructors from the higher cost Geroge Mason University) and is a living embodiment of the education chapters first focus: what matters is not credentialling from the higher end universities, but the low cost acquisition of "just enough just right" learning from key teachers (the brand is shifting from schools to teachers).
   
   Both the education and the health chapters drive home three big points that I find compelling and exciting in the context of C. K. Prahalad's The Fortune at the Bottom of the Pyramid: Eradicating Poverty Through Profits (Wharton School Publishing Paperbacks):
   
   1. The innovation and profit opportunities are with the non-consumers--the ultimate non-0consumers today are the five billion poor, and especially the 1.5 billion each in China and in India, two countries that have the capability to create call centers for "just enough just in time" learning via cell phone.
   
   2. The keys to health innovation, both in the developed world of one billioin rich and in the undeveloped world of the five billion poor, are:
   
   a. Creating "good enough" solutions that are very low cost and easy to push into remote areas that could not afford high end care; and
   
   b. Pushing innovation down the pyramid from the expensive sites and specialists to the nurse-practitioners and ultimately to the patient themselves; while also moving the diagnostics and the remedies down to the point of care and aware from the hospital "hubs" that are now as antiquated as the airline "hubs" that block point to point travel.
   
   Chapter Ten on "The Future of Telecommunications gave me goose-bumps. No kidding. Thunderclaps and blinding lighting accompanied the third page of this chapter, in part because I have been thinking about Open Spectrum (see David Weinberger's brilliant chapter on this, free online, and also his new book, a sensational new book, Everything Is Miscellaneous: The Power of the New Digital Disorder. Althought the chapter focuses priimarily on wireless versus hardline hardware options, and does not mention either the obvious fact that satellites still have too much delay for ubiquitous wireless from outer space (something that should go away in ten years with higher energy pulses), or the other obvious fact, that even wireless is being commoditized and that on demand services and sense-making are the next big offering from the innovators, I found this chapter compelling. Arthur Clarke said long ago that telecommunications should be more or less free as an enabler, and I agree. We need to make both communications and education free to all, and monetize the transactions, the patterns, the early warning, and the aggregate sense-making.
   
   The next most important chapter for me was Chapter 3, "Strategic Choices: Identifying Which Choices Matter." What stuck with me are three things:
   
   1. Start early--don't wait for everyone else to realize the need
   
   2. Hire accordingly. This is HUGE. Most companies have a profile for new employees that is 20 years out of date. Most companies have no clue that Digital Natives are completely different from Digital Immigrants (as one author notes: this is the first generation where the kids are not little version of us--they are a metaphysical transformation well beyond us and anything we can comprehend). Hence, companies have to have the leadership needed to create a "safe" skunkworks where iconoclasts and others who are largely antithetical to the gerbils and drones hired in the past, can innovate without having to deal with the insecurities, ignorance, bad habits, and "rankism" of those trapped in the pyramidal paradigms of the past.
   
   The Appendix provides a summary of key concepts and has some really excellent illustrations that are very helpful. The point within the Appendex that escaped me earlier in the book and was driven home here is that ultimately the innovative firms make investments as a means of learning, not as a means of realizing their pre-conceived notions of what is needed next. I continue to recommend the Business Week cover story of 20 June 2005, "The Power of Us." Innovation, it appears to me, works best when firms both hire and invest to learn, *and* dramatically and deliberately expand the stakeholder circle to embrace the end-user being sought as a customer.
   
   The rest of the book is very worthwhile for those that do not read broadly in the business or innovation leadership.
   
   Other books that I have found as exciting at this one:
   Groundswell: Winning in a World Transformed by Social Technologies
   Mobilizing Generation 2.0: A Practical Guide to Using Web2.0 Technologies to Recruit, Organize and Engage Youth
   The Change Handbook: The Definitive Resource on Today's Best Methods for Engaging Whole Systems
   Society's Breakthrough!: Releasing Essential Wisdom and Virtue in All the People
   How to Change the World: Social Entrepreneurs and the Power of New Ideas, Updated Edition
   The leadership of civilization building: Administrative and civilization theory, symbolic dialogue, and citizen skills for the 21st century
   The Wealth of Networks: How Social Production Transforms Markets and Freedom
   
   Finally, a book I published with 55 contributors, free online but utterly wonderful in hard-copy from Amazon:
   Collective Intelligence: Creating a Prosperous World at Peace



5. Well, bought it based on reviews, tried to read it but now its taking the dust. I feel that the content is theorical and I am missing the practice behind. Or maybe it's not for me.
   
   I read the Blue Ocean, prefered it. A bit simplistic, which some make people doubt about its pertinance, but the tools inside are good.

5 comments about Peddling Prosperity: Economic Sense and Nonsense in an Age of Diminished Expectations.

1. I see this book is in someone's "Listmania!" as being on the Economics reading list of the Wharton MBA program, alongside two primers on economics 101. Good grief. Please don't read it thinking that Krugman is explaining what economics is REALLY all about, or is doing so in a non-partisan way. Indeed, this IS how the book comes across, and perhaps this is why it is on the Wharton B-School reading list.
   
   However, this book is hardly even-handed, and it fails to present a complete picture of the really important ideas in economics.
   
   To be sure Krugman does discuss MOST of the modern big ideas in economics, and there are a lot of interesting insider perspectives in this book. What's more, Krugman provides a solid introduction to how economic theory can affect economic policy. Finally, Krugman is a hyper-intelligent and prolific economist, and one of the central figures in economics today - and these facts alone lend interest to the book. But if instead you're looking for answers as to which of today's economic ideas might be the best, this book falls well short of providing a balanced and complete picture of the possibilities.
   
   First, the reader needs to be aware that Krugman is a strict Keynesian/new-Keynesian economist, which in short means that he has a distinct intellectual leaning towards all things originating in the theories of John Maynard Keynes, an extremely infuential economist who came to the fore in the 1930's. Nothing wrong with having an intellectual preference, per se. However, in Krugman's guided tour through the modern economic landscape he fails to mention one particular school of thought - the Austrian school - which happens to present a very serious challenge to Keynes, and indeed to all of the other major modern schools.
   
   The three schools that Krugman DOES discuss in this book - the Keynesians, the Chicago School, and the Supply Siders - are along with Marxism the three most dominant schools of economic thought of the 20th century. And contrary to popular belief, these schools all share something fundamentally in common: they all base their ideas upon John Maynard Keynes' conceptual framework of the economy. That is to say, in the 1930's Keynes presented his theory as to what the primary building blocks of the economy are, and the other schools have subsequently accepted these as being the starting point for economic analysis.
   
   For example, the Keynesian framework holds that A, B, C, and D are the economy's fundamental components, so that any and all conclusions one draws about how the economy works must take into consideration each of these. And though the disagreements among the different schools are excruciatingly complex, they ultimately are merely disagreements about how A, B, C, and D act upon one another other; not about whether for example C belongs in the analysis in the first place, or whether the addition of E might not indeed clarify things a bit.
   
   The Austrian school, on the other hand, argues with considerable force that the Keynesian model is flawed. The Austrians - who almost no one has heard of and who even most economists pay little attention to - believe the Keynesian components A, B, C, and D are simply the wrong ones. The economy, they say, can instead be MUCH better understood in terms of A, C, F, and G for example. But no matter how penetrating and insightful their arguments are, the Austrian challenge to Keynes was dismissed decades ago due to historical circumstances and political expediencies, and is now far out of favor by practice. And it is very unfortunate that the reader will walk away from Peddling Prosperity without hearing the Austrians mentioned.
   
   In sum, anyone interested in learning about how economic theory affects economic policy could benefit from reading this book. It gives a brief, accessible, and interesting snapshot as seen from one of today's central figures in the field. However, it would be a big mistake to come away from Peddling Prosperity thinking that you could now make an informed decision about which modern economic ideas might be the best. For while Krugman DOES give you a view of MOST of the big ideas - at least as seen from a Keynesian perspective - his omission of the Austrians is a critical one. Anyone who is interested in exploring the really important ideas in economics needs to include the Austrians on their reading list. The ideas are extremely powerful and their critique of Keynes and the Keynesian framework is truly profound. Warning: if you already know a thing or two (or even three) about economics be prepared, the Austrian perspective may just flip your lid and take you to a place firmly outside of the mainstream.



2. "If you are a good economist, a virtuous economist ... you are reborn as a physicist. But if you are an evil, wicked economist, you are reborn as a sociologist."
   
   Krugman begins 'Peddling Prosperity' with this quote to expose a fallacy of conservative economists: they do not appreciate the fact that the real world is messier than over-simplified economic models of perfect competition. As someone who has already been through the 'markets are perfect' phase, I can relate. I had high hopes that this book would provide a more balanced and nuanced view of economics. Unfortunately, I was disappointed.
   
   Issue One: Inequality and Out of Wedlock Childbirths
   
   The first flaw is that Krugman ignored his own advice and treated modern day poverty as an economic issue, rather than a problem best studied by those "evil, wicked" sociologists. On page 4 Krugman notes that child poverty rose from 1973 to 1991, and that family income is only 5% higher in 1991 than it was 1973. He follows this up in chapter five with a whole host of data showing that the poorest families have gotten poorer and the richest families have gotten richer.
   
   What Krugman does mention is the increase in out of wedlock childbirths, which have increased from 11% to 69% among blacks, and from 1% to 28% among whites (including Hispanics), with most of the increase taking place after the mid 1960's. (See the book 'The First Measured Century' about changes in 20th century America).
   
   This rise of single motherhood has two consequences.-The first is that we created an entirely new category of poverty through single motherhood. In 1965 the late Democratic Senator and, and "evil, wicked" sociologist Daniel Patrick Moynihan showed that the breakdown of married two-parent family is the number one cause of poverty with his famous Moynihan Report. Modern research from conservatives like Charles Murray and liberal sociologists like Sara McLanahan and Gary Sandefur has confirmed the link between family structure and poverty.
   
   Out of wedlock childbirths cause increased poverty, inequality, and lower wages in the bottom quintile of Americans, but Krugman consistently puts the blame on conservative economics while avoiding mention of family structure. I do recall one vague mention that social upheaval of the 1960's probably increased poverty, but that's about it.
   
   For an accessible summary of the research on family structure and poverty, see 'The Marriage Problem' by the sociologist James Wilson. 'Civil Rights' by Thomas Sowell is an excellent example of an economist (and a conservative, no less) who does take into account cultural factors when discussing poverty.
   
   Issue Two: Public Choice Theory
   
   Krugman is correct that many conservatives are too wedded to simplified models in which markets always work. But there is an equally negligent assumption in the case for government intervention, which is that government interference can provide a better solution.
   
   The rise of Public Choice Theory, for which James Buchanan received the 1986 Nobel Prize in economics, shows that this assumption is unwarranted. Government failure tends to be worse than market failure. This is why there were no Southwest's and JetBlue's when airlines were regulated, and why the price of phone service dropped rapidly after AT&T's government-granted monopoly was broken. And as another reviewer has mentioned, the purported market failure of higher prices after cable deregulation is really due to being granted legally protected monopolies at the local level. But the real lesson of Public Choice Theory is not that governments are innefficient, but that they are corrupt. This leads to regulatory capture, in which regulators help Big Business dominate an industry, rather than serve the consumer, small businesses, and entrepreneurs.
   
   Krugman should have discussed Public Choice Theory, even though it bolsters that case for markets over government. Paul Samuelson, who has historically been the most important Keynesian economist in America, and the author of the best selling economics textbook of all time, did discuss public choice theory in his textbook. It is one of the main reasons that Keynesian economists abandoned the use of public works projects to stimulate the economy - it leads to corruption and graft.
   
   For a good discussion of Public Choice Theory, check out 'New Ideas From Dead Economists.'
   
   Issue Three: Europe
   
   Europe has put into practice many of the policies that Krugman supports, so it seems almost unbelievable that Krugman criticized Europe for being too conservative. Europe has the policies that Krugman freely discloses at the start of his book that he supports: progressive income taxes and social welfare safety nets for the poor.
   
   Europe also has a stubbornly high unemployment rate that runs about 3-4% or so higher than the United States. This cannot be explained by invoking "hidden unemployment" because all the major organizations that track international employment (BLS, ILO, OECD, Eurostat) agree that Europe has higher unemployment. Furthermore, there are objective measures of hidden unemployment, such as U-6 unemployment, and they are even higher still in Europe (they are a whopping 20% for Sweden). That should come as no surprise because a large part of hidden unemployment consists of people who have given up on finding a job. This is easier to do if you have extensive government safety nets to fall back on.
   
   But the biggest problem with Europe is that its productivity lags the United States, even hourly productivity (although you can cherry pick individual European that do better, western Europe as a whole is worse). This productivity gap is understated because productivity only measures the employed. But Europe's higher unemployment is concentrated among the young and minorities (unemployment among young Muslims was 40% at the time of the Paris Riots). Young, inexperienced workers pull down the average productivity, so excluding them boosts Europe's productivity statistics.
   
   Of course, it should come as no surprise that Europe is lagging in productivity. Although you do not think of bankruptcies as being good for the economy, they allow misallocated capital and labor to be put to a better use (think: employees at failed dot.coms going to work for more viable businesses). Much of the productivity gap between the United States and Europe has occurred because the United States has been allowing its manufacturing jobs to go overseas and focus on services. But the more protectionist Europe has kept those jobs at home and paid the price with lower productivity growth. The statistics bear this out. Germany has a mere 735 bankruptcies per 10,000 businesses compared to 1012 in the United States (page 59, Cowboy Capitalism: European Myths, American Reality).
   
   The costs of starting a business in the United States are also lower. It costs about 1.7% of the per capita GDP to start a business in the United States, compared to 32.5% for Germany. France and Italy are even higher. So each year only 906 businesses are started per 10,000 in Germany compared to 1240 in the United States. Consequently, when Business Week did its survey of the 100 most important IT firms, the United States topped the list with 44, compared to only 4 for France and 1 for Germany(page 60, Cowboy Capitalism: European Myths, American Reality). Asian countries like Korea did better than Europe.



3. Krugman has bought into the myth that we are forever going backward and that true progress for all is impossible. This is completely wrong. He may not be as extreme as Marx, but he still believes in the "limits to growth" school of economics. No how much evidence is produced to debunk this, it is still the foundatation for benighted folks like Krugman. He has no understanding of innovation and why wealth is unlimited in today's world. He also throws up extreme views and then shoots them down, such as claiming that many argue for no role for government. Goodness, how silly and extreme can you get? If you want to liberate your mind and see the unlimited possibilities of the human mind see anything by Milton Friedman.



4. I enjoyed the first 120 pages of Krugman's book. It was very readable and given his biases, I thought, very fair. At that point the discourse becomes an indictment of the "Supply Siders". The evenhandedness disappears and one sided views of all conditions,actions and results take over. I am surprised by the large number of "5" level reviews. In reading them it is obvious that many of these reviewers have some experience in economics and must be aware of the not only the fallacies of Krugman's conclusions but the bias with which he treats the facts.



5. Fiscally I'm very conservative, so I don't relish hearing my ideas bashed and those of Keynes extolled.
   
   Such that I never paid Krugman much attention until he won that Nobel prize. Sure, I had read a couple of his NYT articles, but I didn't realize how well-respected he was academically until then. After Stockholm made its announcement, I decided to read a few of his books carefully -- to see what I was missing.
   
   "Peddling Prosperity" is the second Krugman book I've read so far. It's very good. Krugman has a gift for explaining complicated ideas in a homely and memorable way. But I guess that's why he makes so much money.
   
   Though this book can be characterized as an overall primer on macroeconomics, its major thrust is exploring what went wrong with productivity growth after 1973. It's an analysis of the problem paced in a leisurely enough way that you end up getting a lot of very useful background on the subject, although the book really goes nowhere and essentially concludes with Krugman admitting "we still don't know." But listening to his musings will improve you despite that admission.
   
   The real problem with this book is that it sorely needs a second edition. It came out in 1994, before the productivity gains of the internet hit, before the Clinton surpluses, before the Bushian twin deficits, and, well, a lot else.
   
   It's still very readable, and its merits far outweigh this shortcoming, but I wish Krugman would update it. About 20% or so of the text is totally useless by this point.
   
   I think he's on to other things by this point, though.

5 comments about New Ideas from Dead Economists: An Introduction to Modern Economic Thought.

1. This book would make an excellent pre-100 level textbook for students interested in economics. Buchholz covers all major economic theories and their proponents from Adam Smith's Invisible Hand to the most currently vocal Rational Expectations theory. The detail never gets so deep as to actually present charts and diagrams, but is solid enough that the reader comes away with a general understanding of each theory.
   
   The book suffers a little in the beginning as Buchholz seems uncomfortable simply presenting the dry facts and ends up regaling the reader with anecdotes and economist in-jokes that may play in the classroom but fall flat in textual form.
   
   Buchholz really hits his stride when he starts talking about Keynes, though. Perhaps it is the benefit of having multiple economic theories at odds with each other by the early 20th century that make writing about it so easy. Whatever the case, his coverage from Keynes to the modern day is exceptionally well done. Focusing less on the character of the men and more on the value of their theories, Buchholz clearly describes Keynesian, Monetary, and Rational economic theories. He proceeds to play them off each other to the delight of the reader. Where the first part of the book failed to be dynamic, the latter half is exceedingly entertaining and informative.
   
   The problem is that I'm not interested to know that Smith was a klutz or that Malthus was well-polished. Those things are only used by Buchholz to bring life to these dead economists. He could have brought them more to life with more focus on what keeps them alive than the things buried with them.
   
   I recommend this book to anyone with an interest in getting an overview of economic thought. It will introduce you to just about all the important economic theories that have made an impact as well as the latest 'cutting edge' theories that present alternatives to the existing body of work. I hope to find a book that can replicate Buchholz's success with the modern era theories for those economists that I feel he short-shrifted in this one.



2. When I first saw this book, I thought this sounds really interesting. It is, if you like to read trivia about economists, most of whom are dead. There are loose connections made to miscellaneous events in modern times, but the bulk of the book combines jokes that have been around for decades (as dead as the economists) with mini-biographies more suited to a fan magazine, focusing on John Stuart Mill's dysfunctional childhood, John Maynard Keynes' marriage to a ballerina, John Kenneth Galbraith's height, Thorstein Veblen's odd mode of dress and his lecture on cannibalism, and similar delicacies.
   
   My impression is that the author found no use for this information when he was studying economics, but hated to throw out his boxes of notes. So he came up with a great, if dishonest, title and packaged the miscellany for sale. If you have no real interest in economics, but love gossip columns and want to sound like you know something about famous economists, this is the book for you.



3. This books generally delivers what it promises, a review of major thoughts from economists evaluated (somewhat) in a modern context. If that's what you are looking for, it's probably worth reading. However I had three problems with the book. First, he says some incredibly, bizarrely wrong things (quantum mechanics is not a hard science, the internet was invented by private industry, California may float away into the ocean). Even though they are topics outside of economics, they made me generally suspicious of his knowledge. Second, from some of his comments it is clear his writing has a political/philosophical bias but he never comes out and states what it is. Since I'm not an economist (after all, that's why I'm reading this book), it seems impossible to figure out what his bias is and how to correct for it. Third, perhaps a minor point, but he keeps drifting slightly off-topic in order to include a cute saying or clever remark. I mostly found this annoying, but other readers might find it helps keep the book light and fun.



4. Luckily, economics got that "dismal science" label a long time ago, because this book is quite the opposite. Written in both lively style and learned content, the reader will want to go through each chapter wondering "who's next on the chopping block?" And who would have expected to find this gem in a normally dry-sounding field (economics), or a self-serving field (biography). Lest anyone be turned off by the relatively un-recent publication date (1989), the author has updates covering fairly recent events.
   
   This book adds a nice thought just by itself: humor and economists. Marx and laughter. Adam Smith and mirth, etcetera. The story covers the really big names in the field in chronological order, and you just know that each personality coming up will get the same fair treatment: a description of the old economists' philosophies and systems, the good parts, the bad parts, the dumb parts, and what they said about each other. At the end, just as we figure out what the author REALLY thinks is the best economic structure, we find the answer is more along the line, "it depends." How can you not like a work like this!
   
   Dead economists. Some books are not that good, but have a great title (e.g., "Blink" or "Feel the Fear but Do It Anyway"). Many, many are the other way around, such as "Rise & Fall of the Roman Empire." "Dead Economists" is both. Do read it.



5. The book is so boring that I have to leave my first review on Amazon.com. I don't know economics. I'm expecting ideas from the famous economists and how to apply their ideas in the 21st century. I'm not interested in the their lives, their childhood, their education, their friends, their abilities, etc.
   
   For example, "Marshall also realized that facts teach nothing by themselves". I'm not interested in how he teaches, I'm interested in what he teaches. I'm already bored to death before the author put some economic ideas at the end of each chapter.

5 comments about The Wealth of Nations: Books 1-3 (Penguin Classics) (Bks.1-3).

1. This Book is a classic. I would not go so far as to add it to the western Canon, but it contains the foundations of modern Economics. Its explaination for how economies work is still unsurpassed. Division of Labour, the invisible hand of consumer demand and the uses and mis-uses of taxation are all here. It should be stressed however, that this edition does not include books IV and V which concern the proper role of govt. It is also the section most ideologues forget to read and contains all the rudiments for a minimal welfare state and and active role for govt. in planning FOR competition, NOT the planning OF competition --- a very important distinction and one lost on those who see no positive role for the state in the economy.

   It is unfortunately most used as a classic for those seeking a rationale for exploitation. Smith did not intend it as such and to see it as that is indeed to read it very selectively. The invisible hand is a useful interpretation for demand economics, but it is, like all other things only a description of market forces as they operate. It is not always the best way to organise everything as modern day ideologues would presuppose. It is of course the basis of business --- and it should be --- but Smith also has lots to say about how other economic factors operate in society.

   One thing to make clear is this: Smith is not anti-State, as some ideologues in the US would like to think. He is balanced in his view of the state --- it is best left out of economic planning --- but it does clearly have an important role to play. The role of the State is to

   1) create the conditions for the smooth flow of capital and its allocation into its most efficient uses and not to erect barriers in the process.

   2) It also must necessarily collect taxes since the smooth and efficient operation of the state and the benefits its provide is in the interest of the accumulation of Capital.

   3) The State also directly participates in the economy when projects which are obvious to the public benefit, but "which to no one would accrue an economic profit" --- he offers such examples as lighthouses and some roads and defence --- areas where there is an obvious public good, but to which no one would make a profit. Lighthouses are good examples, but like everything else in today's economy an interpretation for this could be made for universal health care and, of course, education; the mere fact that people do not have to worry about providing for education or health allows them to carry on in amassing capital in other endevours. Of course there is a slippery logic here but such is the rationale for the limited, but much greater role, the state provides in most developed economies outside of the United States.

   4) Taxation policy is here as well. In the last book, Book V (not included in this edition), Smith describes the foundation of taxation and where it works best. He starts with the idea that "those who benefit the most from the smooth functioning of the state, should also be the ones who pay more." While not a prescription for progressive taxation policies it is the right way to think about tax and certainly would never excuse preferential taxation policies for the rich (such as in the US) but could be used as a foundation for a universal flat tax.

   Such a tax is perhaps the best, but as Smith points out, where and how to collect it is always the difficulty. He comes out more or less in favour of a consumption tax policy since it would approximate the wealth the people earn in the first place and would not, for example overburden companies or people with high income taxes when they may not have high earnings.

   There is however little in here about social policy, but Smith does see it as the right of the State to, in his time, provide welfare in the guise of work houses (19th Century hell holes). But that was as good as public welfare got in those days so we can posit that Smith would have carried his logic somewhat forward and provided for some social programmes --- though the extent of them would be a subject of no doubt fierce debate.

   Overall a book that every thinking person should have on their shelf. Like most things it has some warts over time, but it is still the logical Tome on which capitalism rests its bones. Not until Marx did someone really challenge its dictates --- Smith basically won the argument on most points. But willingness for those with an inability to think critically, to use this book as justification for the domination of the weak by the strong, has little to do with Smith --- it has everything to do with those who are looking for justification of Greed --- and Gordon Gecko and Adam Smith have little in common.




2. This is one of the truly great books produced by the Western world. Although much has been written on economics since, it considerably broadened my perspective to read it in the original.

   I can't help feeling that those who pan Wealth of Nations as an apology for exploitation simply haven't read it. That�s simply not what the book is about. For if you really do care about the underpriveleged masses -- and it's imminently clear that he really does -- then you better consciously organize your state in such a manner that money will flow naturally where it's most needed.

   I'd been told before I read it by several people that AS was, for example, apologizing for the East India Trading Company? Does his apology for EIT include the lengthy chapter which discuss in full detail how and why the East India Trading Company was responsible for an wide array of abuses in the Far East, and why no similar company would be legal if a society were fully moral and knew its own best interest?

   Nor is it a blind apology for laissez faire economics, though it does recommend non-intervention by the government insofar as that is possible. Still he fully recognizes the need for social services, rightly understood and rightly executed.

   In fact, I can't see how anyone who reads it could view it as an apology at all -- it's simply a statement of fact. Adam Smith is not the one carrying an ideology around on his shoulder. You may not like it that the world works this way -- that's another matter. But that IS the way it works... you are made to see that for yourself. It is not imposed on you as dogma.

   And after reading AS, I'm left feeling very happy that that's the way the world works.

   I think the most fundamental idea I am left with after reading all those pages, is that wealth is a verb, not a noun. Land and labor (i.e. food and farming) are the bottom line of economics. Treat your farmers well. Unjust practices in trading will ultimately backfire.

   The dynamo which runs the machine that creates wealth lies within each individual - it is the individual�s will to better his or her condition. To the degree that this aspect of human nature is given the power to express itself , the nation will be vitalized internally.




3. The Wealth of Nations handles a lot of economical phenomena in a concrete but sometimes complex way. On one hand the book is filled with ideas, some convincing, some out-dated, some fundamental to the current believe in free-markets. These ideas are combined with appealing (or appalling) examples of the injustice done to people by disturbing the free-market. On the other hand however, I find that certain sections of the book require a lot of concentration. The book is an interesting, but slow and at times difficult, read.
   
   Essentially, it is a treatise on the power of individuals to maximise their own wealth and therefor a support for the natural liberty of men and an argument for free-markets. Not as a perfect system in which there will be no misery, but as a system that gives individuals the greatest (and most just) opportunity to gain happiness and which will be the quickest to respond to changes in supply and demand (and therefor decrease the misery which is created when governments ignore gaps between supply and demand).
   
   It is not a book that believes in the pure goodness of companies (but explicitly states that companies have a interest which is directly opposite to that of society as a whole. I.e. the interest of companies is to create a supply shortage so they can ask prices above costprice), but says that the best way to break the power of these companies is the allow free competition. It also reveals that political decisions that at fist glance seems compassionate, might in fact be inhumane, cruel and the cause of much suffering (because on the long run they lead to a supply shortage). The examples given here, are still relevant to view the decisions made by politicians in today's so-called free market countries.



4. "The market price of every particular commodity is regulated
   by the proportion between the quantity which is actually
   brought to market, and the demand of those who are willing
   to pay the natural price of the commodity."
   [The Wealth of Nations]
   Not easiest book to read, nor shortest one. But it deserves attention of serious student of Economics. It constitutes the baseline from which all modern Economics theories developed. Kind regards, Mario.



5. The first three "books" (the term for "chapters" in Smith's age) of the Wealth of Nations are the most important of the book. The introductory essay by the Smithologist Skinner also provides great insight into the book per se, Adam Smith and how Wealth of Nations fits into Smith's other works. This is despite the fact that it is only about 70 pages long. THis essay is much more enlightening than many books on either Smith or the Wealth of Nations. The price of the book is worth that essay alone.

5 comments about The Mind of the Market: Compassionate Apes, Competitive Humans, and Other Tales from Evolutionary Economics.

1. A few years ago, I read Shermer's "Science of Good and Evil," in which he explains how evolutionary psychology can explain human's moral natures. The issue I had with that book is very much the issue I have with this one, which uses evolutionary psychology to explain human economic behavior (particularly in markets).
   
   The fact is that Shermer bases just about everything in both books on a very tenuous "science" of evolutionary psychology and where Shermer is very skeptical when it comes to many things, he is probably more accepting of evolutionary psychology explanations (which are generally "could be" propositions that Shermer takes as "is" propositions.) While I don't have any major qualms with evolutionary explanations for behavior, the problem is that evolutionary explanations of behavior are not empirical as are evoluitonary explanaitons of physical structures. (Many times in the book, Shermer says things like, "We know we have x tendency. The reason this strategy evolved IS..." instead of, "This could have evolved in humans because..." With every page, I had to ask myself why a careful skeptic like Shermer chose to write a book based on a very tenuous and tentative "science" that he unskeptically takes as unquestioned fact?
   
   Beyond this, I must confess that the thesis of the book seems quite jumbled: sometimes, it seems like Shermer is suggesting an analogy between the market and biological evolution. Other times, it seems that Shermer is making the case that human psychology functions best in a market system. Other times, whole chapters are devoted to discussing asides like why humans are not quite the rational actors that "rational choice theory" has us believe, without so much as telling us where this ties in to Shermer's story.
   
   The upside is that the book is very interesting. As usual, Shermer is a great popularizer and summarizer, interspersing theory with fascinating anecdoes (both personal stories and recounting others' experiments). In the end, though, I must caution readers against the book owing (a) to usually-skeptical Shermer's unquestioning reliance on the very tentative ideas of evolutionary psychology for the bulk of the book; and (b) to the book's lack of any real clear thesis, instead having a very disjointed and hurried feel.



2. The title of this book led me to believe that it would be an in-depth analysis of the psychology and behavior of the stock market. However, that is not really the subject of this book. Instead, the book advances a thesis regarding how to apply evolutionary principles to economic and political frameworks, and consisting mostly of a defense of free markets and democracy. Also, the author identifies some popular conceptions of evolution (social Darwinism, "nature red in tooth and claw," the "selfish gene") as "myths" that inaccurately characterize evolutionary concepts, and that he suggests that cooperative behavior is actually a more evolutionarily advanced strategy in species.
   
   As I read the book, some questions occurred to me regarding the assertions made in the book:
   
   1. The linkage of free market competitive ideology with evolutionary concepts and efficiency (Adam Smith's "invisible hand" paradigm) was developed in a era of continuous western expansion into new land frontiers, rich with resources and free land. This affected the relationship between "producers" and "consumers." The author suggests that free markets favor consumers over producers, and that favoring producers over consumers (via protectionism, tariffs, unionization, etc.) leads to stagnation and inefficiency. Whether or not this may be true, now that we live in a time of increasingly scarce material resources with fewer virgin frontiers to exploit, producers will necessarily gain greater power in the relationship with consumers (as with oil production, energy, technology, etc.) This skews the "free market" relationship the author describes and may therefore warrant governmental/outside regulation or mediation to keep the playing field level. This also has relevance to the tendency of some producers to gain a monopoly of resources, information, or access, which renders them effectively impervious to true competition and therefore causing consumers to be less likely to gain the benefits of free market competition in quality, price, etc.
   
   2. The characterization of "producers" and "consumers" as separate entities may itself be somewhat inaccurate. Ideally, in our society all will possess both roles. Therefore favoring one over another, or speaking of them as opposed interests may inaccurately characterize our consideration of the topic of optimum structuring of markets.
   
   It seemed to me that there were a number of ideological assertions made as statements of fact, with a lack of supporting evidence presented. However, I found the book to be interesting, engaging and thought-provoking, and would recommend it as stimulus for thought, reflection, and development of ideas.
   
   (For another perspective on some of these concepts regarding free markets and democracy, I suggest "World on Fire" by Amy Chua.)



3. If you find fascinating the author's tales of bicycle racing, then you're his mum or dad. If you find his summary of psychological experiments interesting, then join the club, but there's little new here. This is a very conceited book, fuller of references to his own less than groundbreaking work than of the usual suspects'. (Skiiner, Game Theory, etc.)
   There are some genuine and interesting puzzles about the market. Why do prices vary by marketplace? Is 'market failure' an aberration, a temporary madness, confined to some (public?) goods, an universal condition? Would better understanding of human nature avoid manias, panics and crashes? Why do banks always seem to bet the farm at the very worst moment (or do they)? Why is the return on capita cyclical? Why is the long run rate (smoothed for the cycle) so stable? Is Efficient Market Theory true, a useful proxy, an approximation, a crafted illusion? You can think of additional questions of your own.
   If you hoped for answers, forget it. This is a pop psychology book with 'market' tacked on the end.
   Despite discussing some titanic German bores (Hegel, Marx, Weber, et al) along with the genuine greats (Voltaire, Smith, Schumpeter, Hayek) J Z Muller's near identical title 'The Mind AND the Market' is a far better read.
   To be fair, for amateur psychologists the bibliography in Shermer's book is really quite good.



4. Michael Shermer always has very informative sociological statistics and analysis, but would have liked a little more about the "market"



5. Neuroscience says just like the rest of human anatomy has been shaped by evolution, so has the brain.
   
   That branch of neuroscience focusing on economics is called neuroeconomics.
   
   It's very fortunate that this book was written by Michael Shermer because not only is he well versed in neuroscience but he's also really coming more into his own as a writer.
   
   In telling the story of neuroeconomics, Shermer begins by reciting the obvious and significant fact that humans have spent the greatest part of their evolutionary history living not in cities and advanced societies but rather in small hunter gatherer tribes. Accordingly, the inbuilt prejudices we have for what is and what is not fair are sometimes taxed by modern society.
   
   How are Bill Gates and a criminal alike? According to Shermer both experienced their greatest drive to produce in their twenties and both did it for the same reason: to attract women. Shermer noted that it's fact that while women generally attract men by virtue of more physical qualities men have to resort to showing themselves capable of being financial producers using whatever talents they may have.
   
   Though admittedly Shermer lets slip some of his more Libertarian economic philosophies later in his book (you get to hear a lot from the French Libertarian Frederick Bastiat) for the most part he keeps it scientific.
   
   And in doing so he keeps it compelling.
   
   Sure, we may be moving about our jobs and banks and malls but evolutionarily we're basically chimpanzees with wallets.

5 comments about Origin of Wealth: Evolution, Complexity, and the Radical Remaking of Economics.

1. I would recommend this book to anyone with an interest in human society and social evolution. The book discusses a lot of interesting aspects from an analytic viewpoint.
   
   Despite the title which portrays the book as an economics text, this book isn't about making money - it's more about analysing how our economic society works (or doesn't as the case may be).



2. Don't be put off by the lengthy critiques found here. You may get the feeling that these reviewers should be writing their own books. If they actually did so, I'd bet they would find that one can't cite every sentence, can't reference every economist who ever contributed to the field, can't explain every generalization at every opportunity. Ignore them and don't miss this great synthesis that pulls from many disciplines to form a wonderful construct that shows how economics is part and parcel of the main drivers of organic life - evolutionary processes.
   
   Btw, Publisher's Weekly also blows their summary. Beinhocker does not use this synthesis as a "panacea." For we humans, his ideas are potentially a more accurate worldview, not a global cure for disease. Beinhocker writes with the aim that we might construct better approximations of reality using this line of thought. Worldviews are big, but that is not the same as a panacea that will cure all that ails you. This is a brilliant work that all thinking members of homo economicus should read.



3. A must read for anyone trying to figure out the future of finance, economics and risk management.



4. The provocative theory of this book, that economic theory is all wet and that economies evolve according to social and technological intervention, is presented well early in the book but then suffers from the presentation of too much information much of which does not appear relevant to the theory itself. Still, necessary reading for those interested in how and why the world works the way it does.



5. The author probably learnt a lot by writing this review of the complexity theory as it applies to microeconomics and strategic management. Not sure the reader will have the same experience.
   
   If you already have read a little bit in this area this book is just too general and unfocused to sustain interest. If you haven't read anything then I guess the book is a fair overview but still long and unfocused.
   
   The writing is okay, but not as smooth and interesting as some other pop-science writers. Sometimes the author comes across as an angry outsider who thinks he has all the answers (compare the pompous title!) and that doesn't make for a pleasant reading experience.

No comments about The Wealth of Nations: With a Foreword by George Osborne, MP and an Introduction by Jonathan B. Wright, University of Richmond.

2 comments about John Maynard Keynes.

1. This book contains an excellent summary of what Keynes emphasized in the GT -the impact of uncertainty on long run investment spending,on the rate of interest(liquidity preference and the speculative demand for money),and the subsequent dominating role that various forms of speculation,based on margin account financing and leveraging,would obtain periodically in financial markets both in the USA and the world.
   The main criticism of the book is that Minsky had absolutely no idea about the technical analysis that Keynes presented in the GT in chapters 19(appendix to chapter 19)20,and 21 in the form of elacticities which demonstrated the special case nature of neoclassical economics.However,this criticism applies to practically all economists,historians,etc.None can follow Keynes's mathematical analysis,although Meade came very close to duplicating Keynes's results in 1937.



2. This is a great book. But it is a book about the views of Minsky, and not really on Keynes. The first chapter examines the way in which Keynes' 1936 book was received and interpreted, and Minsky's explanation is for the most part correct, namely, that Keynes' work represents more a revolution than an extension of "classical" economics. However, as is argued throughout Minsky's book, The General Theory contained only "the seeds for a deep intellectual revolution in economics and in the economists' view of society." According to Minsky, the Keynesian revolution was aborted and the seeds were prevented from reaching their full fruition due to the "bastardization" of Keynes' seminal message. Minsky sets himself the task in this book to bring these ideas back to life.
   
   Chapter two explores the more orthodox (conventional) view of Keynesian economics. Chapter three is very good, as it spells out the concepts that are to be used later in Minsky's analysis of capitalism: the recurrence of the business cycle, uncertainty, and investment and disequilibrium.
   
   Chapters 4 - 7 develop Minsky's theory of capitalism. Minsky argues that booms are inevitably followed by crises and debt deflation not because of certain institutional weaknesses, but because of the fundamental nature of capitalism. In other words, "Keynes visualized [the imperfections of the financial system] as systemic rather than accidental or perhaps incidental attributes of capitalism." Minsky explores the way investments are made, and examines how they are financed. Central to Minsky's analysis is the importance of uncertainty. Financing and liability structures cannot insulate themselves from danger (excessive risk) precisely because the future is uncertain. Another important element in Minsky's book is the importance of money, which he describes as as "insurance policy." This is consistent with Keynes' definition of liquidity. In the event that sales proceeds cannot meet existing liabilities, the possession of money becomes essential due to the frequent revaluations of capital assets making their quick sale at certain prices nearly impossible.
   
   I really enjoy Minsky's work, but this book gives me the impression that Minsky was more concerned with fitting Keynes in his (minsky's) own analysis than in explicating very clearly and honestly Keynes' own economic views. This can best be seen in the last two chapters on social policy. Nevertheless, Minsky is the most important expositor of the "Financial Instability Hypothesis" and this book is a great place to begin.