Invitation to Economics: Understanding Argument and Policy - Hardcover

Mayer, Thomas

Hardcover

ISBN 10: 1405183586 ISBN 13: 9781405183581

Verlag: *Wiley-Blackwell, 2008

Inhaltsangabe

Invitation to Economics empowers the reader to spot naive and spurious economic arguments by inculcating an intuitive 'feel' for economics.

• A unique and critical guide to understanding economic arguments in the media
• Focuses on microeconomics, specifically on the idea that economic policies often have important indirect effects
• Key ideas are applied repeatedly in numerous case studies drawn from newspapers and other media
• Economic principles are presented in an accessible and non-rigorous format using case studies
• Incorporates the value judgments and political judgments that underlie economic policies

Über diesen Titel

Über die Autorin bzw. den Autor

Thomas Mayer is Emeritus Professor of Economics, University of California, Davis. He has also taught at Notre Dame University and Michigan State University, and as a visitor at West Virginia University and the University of California, Berkeley. He has written numerous articles in professional journals, and is the author or co-author of eight previous books. In 1978 he served as president of the Western Economic Association and in 1978-79 as chairman of the International Network for Economic Method, and has served on the editorial boards of several professional journals.

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Our media is filled with stories of economics and policymaking. This book helps you to keep your head above water in this sea of information by empowering you to spot naive and spurious economic arguments. In short, this book will help you become a critical consumer of economic arguments. Accordingly, the book provides many examples of these arguments, and explains why they are wrong.

It is not, however, just an exercise in negation; it does present some economic theory, though not in a formal and rigorous way. Instead of stressing a well-explicated theory, it inculcates an intuitive ‘feel’ for economics, which economics courses often overlook due to their strong emphasis on the technical apparatus of economics. Even those who have taken some economics courses, therefore, will still find much to learn from this book.

It is not, however, just an exercise in negation; it does present some economic theory, though not in a formal and rigorous way. Instead of stressing a well-explicated theory, it inculcates an intuitive ‘feel’ for economics, which economics courses often overlook due to their strong emphasis on the technical apparatus of economics. Even those who have taken some economics courses, therefore, will still find much to learn from this book.

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Invitation to Economics

Understanding Argument and PolicyBy Tom Mayer

John Wiley & Sons

Copyright © 2009 Tom Mayer
All right reserved.
ISBN: 978-1-4051-8358-1

Chapter One

Introduction

There is no lack of information about economics. If you seek comprehensive discussions, there are textbooks, and if you prefer more specialized and scholarly analyses there are monographs and journal papers galore. If you seek information about the latest developments, there are numerous stories in the media, while TV programs, magazines, and books slake the thirst of those seeking advice on how to invest. And if you are after headier fare, and want to set your blood boiling, many editorials and magazine articles offer you harrowing tales about the stupidity and venality of the other side, and the wisdom and virtue of those who share your ideology.

1.1 What This Book Provides

This book tries to satisfy a different need: to enable you to keep your head above water in this sea of valid and invalid information by empowering you to spot naive and spurious economic arguments, that is, to become a critical instead of a passive consumer of economic arguments. Accordingly, it gives many examples of spurious arguments, and explains why they are wrong. (Box 1.1 illustrates how easy it sometimes is to spot inadequacies in a popular argument, if one just takes the trouble to think about it.) Its theme is that in much, though by no means all, of economics, a little serious thinking can go a long way. Although it focuses on only one subject, economics, its emphasis on thinking things through means that it could also be described as a book on applied logic.

However, this book is not just an exercise in negation. It does present some economic theory, because that is needed to spot spurious economic arguments. But the theory it presents is not the structured and carefully explicated version found in standard textbooks. It is a much less formal one, which tries to provide an intuitive "feel" for economics, something that economics courses often fail to do because of their strong emphasis on the technical apparatus of economics. Even those who have taken some economics courses will therefore find new things here.

In order to do that in the space of this average-length book, and to do it as painlessly as possible, I have avoided, where feasible - and that is in most places - theoretical concepts that would require elaborate explanations, and I have introduced as few technical terms as possible. You will not learn the lingo of economics here. For example, supply and demand curves show up only in an appendix that can be skipped without losing continuity. Introductory textbooks need an abundance of diagrams because these courses are intended to provide not only a general education in economics for non-majors, but also to provide the foundations that economics majors need for their more advanced courses. By contrast, I assume that readers of this book are not planning to take more advanced economics courses. And why put up a five-story scaffold to build a one-story house? Instead, I concentrate on basic economic logic. But making this logic part of someone's mental reflexes requires more than simply stating it in a persuasive way. I have therefore provided numerous examples. Proofs prove, but examples explain and convince.

Moreover, unlike writers of textbooks, I have felt no need to be comprehensive. Thus, except for a few passing comments, I have omitted macroeconomics (the part of economics that deals with recessions and unemployment, expansions, economic growth, and inflation), even though my own work has been primarily in macroeconomics, because macroeconomics requires technical apparatus, and provides fewer easy ways of demonstrating the theme of this book. Two additional reasons are the currently unsettled state of macroeconomics, and a wish to keep this book relatively short.

The research that economists, particularly academic economists, do is usually complex and mathematical. But much - though certainly not all - of what economics has to contribute to the outside world, its exports, so to speak, are ideas that are simple and intuitive, and do not require the mathematical sophistication that academic economists look for in each others' work. Even those with math phobia can read and enjoy the most renowned book on economics ever written, Adam Smith's The Wealth of Nations. The only mathematical background I assume, is that readers know how to add, subtract, multiply, and divide, and can look at a chart. Box 10.1 provides the only other bits of mathematics needed, except for the equation for a straight line, which is explained in chapter 13. And even these are needed only in very few places, which can be readily skipped. If Brian Greene could write a book on modern physics that has virtually no mathematics in the text it should be possible to do the same with economics. This is not to deny that mathematics is immensely helpful in economics, but much of economics can be understood on an intuitive level without it. Similarly, I do not assume any prior knowledge of economics other than what you find in a newspaper.

Moreover, I realize that for most people, though not for me, the feeling of satisfaction one gets from understanding a subject is less for economics than for physics. And, being an economist, I know that if you offer something of lesser value you have to do so at a lower cost. The main cost of reading a book is the time and effort required. I have, therefore, made this book much easier going than the popular books on physics that I buy, try to read, and in good part don't understand. It is intended for the coffee break, not the coffee table. Such a book should be of interest to humanists because it deals, not with ways of making a killing on the stock market, but with the way human beings spend much of their time, and, in that respect, economics is a humanity.

1.2 Looking around Corners

What the book does require is a willingness to look beyond readily apparent surface effects for indirect effects, and at long-run as well as immediate effects; or putting it another way, a readiness to "look around corners," and to watch for the operation of the law of unintended consequences. That means recognizing that if the government adopts a new policy, not only will the target of this policy be affected, but so will some other conditions, perhaps in highly undesirable ways. For example, suppose the government requires airlines to install a costly new safety device that will on average save three lives per year. If your ethics tell you that saving even one life is more important than corporate profits you might be tempted to approve. But, when faced with greater expenses, airlines will raise fares. This will induce some people to drive instead of flying. And since driving is more dangerous than flying, the net result of requiring the safety device could well be more fatalities. Or, to take a more complex example: as explained in chapter 8, it turns out that a law giving artists a share in the capital gains obtained when their work is resold makes artists worse off. People often ignore such indirect effects and act like an inexperienced chess player who moves up a pawn to capture his opponent's knight, and does not consider that he will simply move the knight. Chapters 8 and 9 provide many such examples of how the law of unintended consequences frustrates good intentions.

Related to the pervasiveness of indirect effects is the pervasiveness of...

Details zur Ausgabe

• Verlag: *Wiley-Blackwell
• Erscheinungsdatum: 2008
• Sprache: Englisch
• ISBN 10: 1405183586
• ISBN 13: 9781405183581
• Einband: Gebundene Ausgabe
• Auflage: 1
• Anzahl der Seiten: 352
• Kontakt zum Hersteller: Wiley-VCH GmbH; product_safety@wiley.com; ; Boschstrasse 12; Weinheim; 69469; Deutschland