Book Recommendation: New Ideas From Dead Economists

I heard Buchholz speak at a conference, and purchased this best selling economics book, plus his novel The Castro Gene, which I also enjoyed and recommend.

Buchholz won the Allyn Young Teaching Prize at Harvard and holds advanced degrees in economics and law from Cambridge and Harvard. For more on Buchholz, see http://www.toddbuchholz.com/

New Ideas is a review of the ideas of the luminaries of economic thought, from Adam Smith to Ricardo to Marx to Maynard Keynes and Milton Friedman. Buchholz presents their theories in a clear and easy to understand style, with humorous illustrations, and in a non-judgmental way that lets the reader make up his own mind. He also presents what their critics said, and discusses how the theories have worked out in the real world.

First published in 1990, New Ideas was revised and reissued in 2007. It would benefit from further revision in light of the economic turmoil of the past three years.

I was particularly struck by the passage below.

“In an economic model I developed back in the 1980s, I concluded that when time horizons shrink, the value of acting honestly diminishes, leading to economic collapse. With due respect to one’s Sunday school teacher, honesty is not always the best policy, if your goal is to get rich with the least amount of effort. Two forces usually dissuade even amoral egotists from cheating or stealing, especially in business. First, the fear of punishment. Second, the fear that a bad reputation will repel others from dealing with you in the future. But what if you do not care about the future? Crime goes up.” New Ideas From Dead Economists, Todd G. Buchholz.

The light dawns. This explains the mind set of teens (and those nominal adults who are locked in perpetual adolescence, unable to establish normal lives in an adult world). They will do drugs, neglect responsibilities, living in squalor, ruin their credit ratings, borrow money with no intention of repaying and steal, even though it will make their future miserable, because they are mentally unable to understand that there will be a future. If it gives them pleasure today, they will destroy their futures because they can’t envision that their will be a future. They are mentally locked in childhood.

The book was full of interesting insights. It is not polemical—doesn’t push a point of view.