Wednesday, July 21, 2010

Economics for non-economists

Yesterday I went to the launch of a new book by Madsen Pirie of the Adam Smith Institute, called Understanding Economics and subtitled Economics for non-economists. Dr Pirie maintains that economics is an intuitive discipline and depends largely on people understanding their own and others' actions and desires. The aim of his book is to explain the basic principles to all of us and not just those whose brains have been somewhat befuddled by academic economists.
The chapters I read on my way home yesterday deal with trade and its beneficial effect on all those who participate in it. As this happens to be something I more or less understand and more than agree with, I can testify to those chapters being clear and persuasive. I may, later on, take issue with Dr Pirie's apparent assumption that people will always make a rational decision to improve their performance and productivity. History is littered with examples of people, for instance the peasants of Russia, who, offered ideas and assistance to improve their productivity, refused to do so, continued with their inadequate methods and nursed resentment against those who did better. I shall see how Dr Pirie deals with that problem. In the meantime, I do recommend the book - it is clearly written and assumes an intelligent but not specialist reader.
The launch took place in St Stephen's Club, the favourite grazing place of all conservatives and the garden space was shared (and separated by a niftily tied rope) with the Conservative Way Forward's summer party where Lady Thatcher was the guest of honour. Would she have preferred the ASI launch, one wonders.

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