economist

The only reason this book doesn't get five stars are the last chapters about chaos theory, which are a bit "sticky", but nevertheless provide some interesting insights into some of the most recent developements of modern economic theory. Enjoy your reading

This is the best value for having global figures handy, and is one tenth the cost of the other great reference work, the Fitzroy Dearborn Book of World Rankings. Perhaps even more to the point, this book has something the other one does not: country by country data (although one could always go to the CIA World Factbook online for similar data as well as biographic listings). Having said that, it does not have the full range of detail that is offered by the other, such as domestic water shortages and energy consumption. This book has Internet and music charts--but none of the charts are comprehensive, generally listing top and bottom countries, not all countries. Bottom line: this is the best value for a portable book about global figures relevant to political economy.

The book clealry describes the traditional justifications for government in a market economy, market failure; but also delves into government failure, and the limitations of democratic processes in shaping rational policy.

The book describes other economic concepts; marginalism, opportunity costs, welfare economics, pareto optimality in such a manner as to make their policy relevance very clear.

Underlying this non-technical and jargon free discussion is a well intended (and on-target) critique of the academic discipline of economics. Juxtaposing early economic thinkers with today's calculus driven analysts, Rhoades sees a dearth of span of vision. Technical expertise has overwhelmed broad understanding and mathematical brilliance has driven out a wide breadth of learning.

This is an great book for the serious reader and a must for graduate students in policy, PA or politics.

Because this is an anthology of his life's work, themes are occassionally repeated. But you don't need to know much economics, and the writings are current.

After a century of fantastic organizational growth, and fifty years of economics from Galbraith, it takes a tremendous amount of balancing contrary ideas to avoid the worst of what has gone before, in particular, the "cabinet officer or high official who serves and on occasion concurs in action that he finds repugnant." (p. 82). "The Case for Social Balance" on pages 40-54 noted how, in times of economic growth that was highly profitable, industry salaries could rise faster than governments could keep up, and with high inflation, the revenues of cities "lag behind when prices rise. The problem of financing services thus becomes increasingly acute as and when inflation continues." (p. 52). Trying to balance public needs with the views of typical investors, "Urgent warnings were issued of the unfavorable effects of taxation on investment" (p, 53), Galbraith ends his balancing by trying to foist the higher sense of disorder on F. A. von Hayek, who wrote "Where distinction and rank is achieved almost exclusively by becoming a civil servant of the state . . . it is too much to expect that many will long prefer freedom to security." [THE ROAD TO SERFDOM, p. 98] (THE ESSENTIAL GALBRAITH, pp. 53-54).

Arguments tend to illustrate how primitive political positions are, and sending millions of individuals from America to Vietnam as members of the armed forces, supposedly to protect American interests in drilling for oil in the South China Sea, where oil reserves had not even been identified at the time, helped some of them to learn, "Compulsion is inconsistent with either identification or adaptation. If a person is compelled to accept the goals of an organization, he is unlikely, at least as long as he is under the sense of compulsion, to find them superior to his own." (p. 83). This does not resolve the situation in 2003, except for those lucky investors who check the news every day to see if the oil wells are still safe.

After everyone has absorbed "The Concept of the Conventional Wisdom," (pp. 18-30) in a way that assumes a higher standard of living will be most highly regarded in our society, pursuant to "The Myth of Consumer Sovereignty," the position of Galbraith as a thinker might be considered self-effacing in the extreme. Once you see what he is saying about American society, the truer it is, the less likely a political movement which must appeal to voters with such values is to succeed in putting his point across. Anyone who claims to represent the interests of the people, whether they are people of America, or peasants in Nam, or the people of Iraq, is quickly accused of being a fake with views that do not conform to reality in any corner of the globe.

If readers are looking for irony, allow me to point out the observation, common in 1987 prior to the crash of October 19, "Galbraith doesn't like to see people making money." in "The Speculative Episode." (p. 254). Themes in THE ESSENTIAL GALBRAITH might be considered to be in the order followed by the economic cycle. Near the end, "In Goldman, Sachs We Trust" is a selection from THE GREAT CRASH, 1929, which was published in 1955 "and is still in print today; on occasion it sells more than all my other books combined. The reason for its durability is simple: a citizen of sense, encountering someone deeply involved with the imaginative technology of recent times and the speculative enthusiasm surrounding it, advises, `You should read Galbraith on 1929.' " (p. 255)

I like history. The history of economics is represented by Adam Smith, Karl Marx, and Thorstein Veblen in pages 153-223. Keynes is a key topic of "The Mandarin Revolution" (pp. 224-235) and "How Keynes Came to America" (pp. 236-248). The great political triumph achieved by Walter Heller for Presidents Kennedy and Johnson is described as, "they added the new device of the deliberate tax reduction to sustain aggregate demand." (p. 248). This book ends with a lecture in June 1999, which began with the idea, "Over the years I've often presented myself to ardent conservatives as a student of von Hayek; it has added in an agreeable way to their normal confusion." (p. 307).

The discussion begins with a few pages on planning. When directly questioned about TVA, Hayek responded, "There is a great deal of the TVA to which no economist in repute, and certainly not the laissez-faire people, will object. . . . If the hydroelectric power really could not have been provided by private enterprise, I have no objection." (p. 113). If you really want economic growth, Hayek has a point, "where you can create a competitive situation, you ought to rely upon competition." (p. 113). This might be the same point: "I am a convinced free-trader, and free trade is part of the same philosophy." (p. 115).

The former alderman, Merriam, notes how the competition of ideas may result in the opposite of Hayek's ideal. "It was not the fact of communism but the fear of communism that was the most powerful factor in the development of Naziism." (p. 117). The argument gets back to planning, as Hayek says, "That method of central planning which is proposed as an alternative method of organizing production to take the place of competition means that a government, or some central authority, must take complete control of the resources." (p. 119). "Most of the war controls are central planning, but it is only temporary. ... During the war, we all have to go to some extent totalitarian." (p. 119).

If people have truly lost control of the government whenever it puts itself in a war unnecessarily, the socialist Krueger might be addressing everybody when he asserts, "You seem to place no faith whatsoever in the political process as a means of keeping government responsible to the people. Is that really your position? Do you have no faith in the political process as a means of establishing responsibility?" Hayek is as contrary as possible on this point. "I am quite convinced that it cannot be effectively controlled by the democratic process. It requires a degree of agreement among people which we can never expect in a free society." (p. 121). One sure quality of death, particularly during wartime, is that we will never hear a live broadcast of those three thinkers on the radio again. Since television has cut attention spans, Merriam might be truer than he knew then about Hayek's chapter of THE ROAD TO SERFDOM "on `Why the Worst Get on Top,' you seem to express grave doubts about the ability of a democratic society to accomplish much. You say, for example, that the more intelligent people are, the less likely they are to agree." (p. 122). Who would be willing to apply Hayek's concluding sentence to a current catastrophe -- lacking any economic sense, but costing billions -- American activities in Iraq? "I had realized that some kind of state action is extremely dangerous. Therefore, my whole effort was to distinguish between legitimate and illegitimate action. I have attempted to do that by saying that, so far as the government plans for competition or steps in where competition cannot possibly do the job, there is no objection; but I believe that all the other forms of government activity are highly dangerous." (p. 123).

Part Four starts out with some "wholly abstract problems." (p. 125). He spent years writing THE CONSTITUTION OF LIBERTY, "so that I was able to take the finished manuscript to my American publishers on my sixtieth birthday, May 8, 1959." (p. 130). Most of us were a lot younger back then, and to escape retirement at the age of 65, Hayek moved back to Germany. While the conversations quoted in this book are often after that date, they usually refer to what occurred in the years when he was most active in what was going on in the world. As a thinker, it is not surprising that he made more money than Karl Marx. The Index of Persons and Places on pages 161-170 is one of the best I have seen for explaining who each person mentioned in the book was, with more about Lord John Acton than about Achilles, and not much on Karl Marx (1818-1883). A question that he was asked in an interview printed in Reason magazine (July 1992), supposed that Joseph Schumpeter had been more right than Marx on how governments could be more responsible for "the collapse of capitalism due, not to its weakness (as Marx had predicted), but due to its strengths." (p. 154). Hayek could enjoy this paradox of Schumpeter, "that capitalism was certainly much better but it will not be allowed to last, while socialism is very bad but it is bound to come." (p. 154). Democracy allows the freedom for people to complain in ways that can inspire the government to make things worse, if I am catching the drift.

Monnet deserves to be recognized, alongside King and Gandhi, as one of the three great citizen leaders of the 20th century. The book tells his stories in his own words. It is worth reading.

This book is of interest to business economists, and others, for at least two reasons. First, Swonk has had a successful career for almost two decades at Bank One in Chicago. Although the times were turbulent, she kept her same job and phone number through six chairmen and two mergers, she tells us. This book provides insight on how she did it and lessons for how we, in a highly competitive business world and tight job market, might do it. She advises us to ask the right questions, worry about how the world might change, and make economic analysis relevant for our firms. She describes how a successful economist operates-not just relying upon economic models, but using them in conjunction with other sources of information from clients, policy makers, and other economists. Use clients not only as customers but also as sources of industry information. Develop a deep pool of sources that can provide insights into economic policy issues and policy-making. Develop ties with the top economists in key industries and countries and draw upon their knowledge and information. Further, become an expert in the data, but use data with caution. Lay out a road map of where the economy will move next, what structural changes can be expected, and advise management so it won't be surprised. She relates her experience forecasting the industrial Midwest economy and then the tactics she used to convince senior management of her views, ultimately influencing a change in the bank's own strategy. She advises us to develop good rapport with the public relations person in our organizations. She also outlines her approach for getting her message across to the business press-among them, promptly return calls to press members and kick stories around with them (even if you aren't a part of the story). All this helps in building relationships. She gives tips on how to become a good speaker-practice is essential, but the challenge is to connect with the audience; and she tells you how to do it.

Secondly, the book serves as a useful review and analysis of economic events over the past two decades and provides insightful interpretations. The book covers the 1980s, when Swonk began her professional career, to the present. Chapters 9 through 16 provide a narrative of these decades. Among the events that she discusses are the early 1990s jobless recovery, changes in credit markets, the low inflation/high growth of the 1990s, the Asian financial crisis of 1997-98, the 1998 debt crisis in Russia and other countries, and the more recent U.S. asset bubble. She weaves in Fed policy actions through much of the narrative. Swonk compares the stock market crashes of 1929 and 1987 and demonstrates how they were not alike. She illustrates the importance of timely and quality data, noting that policymakers might have acted differently in early 1990 if they had better data: "revisions, which did not occur until two years later, revealed that the recession was already well under way in the fourth quarter of 1990."

The book overflows with practical advice such as five old rules for the new economy and reprints of Bank One reports including "A Road Map to the Internet" and "A Scapegoat or an 800-Pound Gorilla" on the global economy. The book identifies two structural changes that can help us analyze the economy going forward. Type I changes that "have a fairly fast and dramatic effect [and] tend to be more cyclical than secular in nature." Type II changes "are rooted in long-term shifts in the economy." While Type I changes are the focus of much attention, Type II changes are more important and easier to analyze. She gives a "Structural Change Watch List" in Chapter 28. A bonus is an outlook for the economy over the next five to ten years in Chapter 30.

The book is not without controversy. Some readers may take issue with her characterization of armchair analysts and of MBAs complaining about lack of jobs, or her opinions about the quality of economic research and analysis. Others might have a different take on the interpretation of economic events. But the usefulness of the book to the business economist overwhelms these minor criticisms.

The Passionate Economist is partly a professional and personal autobiography. A discussion of the personal is necessary because it provides a framework for economic interpretation, as it does for most of us. It makes economics intuitive for her rather than abstract. And through the use of many personal anecdotes, the book also makes economics intuitive for us. She draws on experiences from her childhood family car trip to Mexico to the more recent September 11, 2001 terrorists attack at the NABE annual meeting, where she served as past president. She also uses brief biographies of friends and colleagues to illustrate her points.

There is no question that Swonk has a successful and rewarding career. She generously shares how she did it and offers helpful hints how we can do it.