The Star Online: Lifestyle: Bookshelf

Posted: 09 Sep 2011 11:22 PM PDT

Title: 30-Second Economics: The 50 Most Thought-Provoking Economic Theories, Each Explained in Half a Minute

Edited by: Donald Marron

Publisher: Icon Books

KEYNESIAN Economics, Free Market Capitalism, Monetarism, Game Theory, Moral Hazard, Creative Destruction, Efficient Market Hypothesis and The Invisible Hand. You have certainly heard of them but save for that snatch of a memory from a university semester on the subject matter, do you really remember or understand what they really mean?

It is safe to say that economics is one of the most applied of all the social sciences. We live in very economically driven environments. You need at least a passing understanding of current economic issues to comprehend many of today's daily news headlines. Even if we have never taken an economics class or it has been quite a while since we actually did, most of us have picked up some essential economic terms and theories on a piecemeal basis through a kind of intellectual osmosis. We can wade through stories in the news or business sections on the economy without feeling too out of depth.

However, don't you sometimes wish you had a handy reference that provides you with quick yet insightful dips into the background and basis of these economic terms and theories? Perhaps a nippy little primer that provides you with a more secure footing on this key social science?

30-Second Economics edited by Donald Marron may be just the book you are looking for. It is a well designed and attractive introductory book that explains each of the 50 most thought-provoking economic theories in half a minute. Marron mentions that economics aspires to be "the physics of the social sciences." He notes that "physicists examine how fundamental natural forces shape everything from the movements of subatomic particles to the orbits of heavenly bodies. Economists, in turn, study how fundamental social forces explain everything from the price of bread to the wealth disparity between the United States and Zimbabwe."

Economy isn't science

In his introduction, Marron goes on to share that "Over the past two centuries, economists have developed a host of theories that explain how markets work and sometimes fail, how consumers, workers, firms and politicians make decisions, and why economies grow or stagnate."

He reasons that while economists have been succeeding "economics will never be physics" as economic theories have their limitations because "humans are less predictable than particles and planets. Economies are complex (more like ecosystems) and so our understanding of them sometimes falls short." He uses our near-universal failure to foresee the worst financial and economic crisis in eight decades as a sorry but perfect case in point.

Each 30-second theory is presented alongside a 3-second crash course for those in a particular hurry and a 3-minute boom for those who want to dive a little deeper. The first group of economic theories, Schools of Thoughts, examines the large-scale forces – markets, inertia, and history – that determine how the macro economy actually works.

The second cluster, Economic Systems, presents theories on how economies should be structured – with greater and lesser faith in markets – and how struggling economies can improve. In Economic Cycles, Marron looks into the factors that drive economic ups and downs and the possible role of governments in smoothing them.

Growth examines how the proper blend of capital, labour, resources, ideas and social institutions can foster prosperity. Global Trade looks internationally, explaining how products and capital flow around the world. Choice peers into our heads in order to see how individuals make decisions in the marketplace, in the home, and in the public sphere. Tax & Spend Policies examines the sometimes surprising effects of government tax and spending policies. Finally, Markets documents the remarkable power of the market forces; from the miracle of the invisible hand to the tragedy of the commons.

Substance in economy

Along the way, each section also presents a quick profile of some of the most important economists; from Adam Smith and John Maynard Keynes to Milton Friedman and Friedrich Von Hayek.

The accompanying rather arty illustrations, done in a mock fifties style, try to convey some irony. However, these could have benefitted from a more "infographics" type approach where key information is summarised into iconic fact packed pictures; to increase the book's appeal to readers who digest matters better via visuals.

Interestingly, many of the top 50 theories in economics can be traced to economists who are somewhat obsolete (biologically and theoretically). Yet these theories themselves still remain vibrant; a testament to the continuing diversity of thought in this area.

As John Maynard Keynes once put it: "The ideas of economists and political philosophers, both when they are right and when they are wrong, are more powerful than commonly understood. Indeed, the world is ruled by little else. Practical men, who believe themselves to be quite exempt from any intellectual influence, are usually the slaves of some defunct economist."

In short, important economic theories are not always right. Marron challenges the reader to find, among the important theories presented, a few theories that are almost certainly wrong despite their influence.

This book lends a new kind of cool to a pretty old science. It takes a subject sometimes viewed as dry and rather theoretical and turns it into something that is fresh and fun, robust and relevant. It can perhaps encourage the economically uninitiated or dispassionate to chance a second glance at what is a highly fascinating body of work that impacts our daily lives.

Kredit: www.thestar.com.my

Sabtu, 10 September 2011

The Star Online: Lifestyle: Bookshelf

The Star Online: Lifestyle: Bookshelf

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