Saturday, February 21, 2009

Two book reviews

I just finished reading Animal Spirits by George Akerlof and Robert J. Shiller and The Dismal Science: How Thinking Like an Economist Undermines Community by Stephen A. Marglin. I was not pleased with either. For those interested, here are my reviews from

Animal Spirits
This book covers a number of important topics that are lacking from modern macroeconomic theory, and has come out at a time when interest in the problems with modern theory has reached a fervent pitch. Sadly though, the book is short, very unevenly written and clearly rushed to press in order to meet a new demand for answers as to why our economy is ruled less by logic than by the psychological complexities of individual people.

These criticisms are all the more interesting given that in their acknowledgments, the authors note that drafts of the book were used for the last 5 years as textbooks for a class at Yale. Surely there was enough interest in the psychology of markets, and time to finish the book, before the current crisis began.

Is the lesson to learn here that even economists who want to improve their field suffer from a laziness that permeates academia, and leads to such poor modeling to begin with?

The Dismal Science
I was excited to read a critique of the economic system I had not heard before. Sadly, this book offers little insight that hasn't been said elsewhere, and better.

If you're looking for a criticism of capitalism and economic ideology, I suggest sticking to the original sources of Karl Marx and latter researchers that build on his work: the Frankfurt school, including Max Horkheimer and Theodor Adorno, and, more importantly, Jurgen Habermas. Sadly, Marglin does not cite any of these thinkers (except Marx).

In the end, this book reads to me like the author is unhappy that the world has changed and is convinced it was all better once, long ago.

Also, do not buy this book thinking that Stephen Marglin is a practicing economist. While he was trained in economics and teaches at Harvard, he has not worked professionally for decades, and his only research that I am aware of is from the 1970s. That is not to say his opinion is unimportant, but it is not that of one engaged in the field.

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