It’s hard to imagine the invisible hand. After all, it’s invisible. Leaving things alone, leaving people to their own desires and dreams would seem like the last way to make the world a better place. So most people have a natural disposition for using the government to make things better. It would seem that managing something is always better than leaving something unmanaged. But it’s not true. I think the world would be a better place if more people understood the virtues of unmanaged, uncoordinated, unorganized, undesigned action.
Ms. Lieber, a fictional economics professor at Stanford, is the alter ego of Russ Roberts in his forthcoming novel The Price of Everything. Roberts takes on perhaps the biggest challenge in economic education–explaining the concept of spontaneous order. It is at the same time fundamental to all of economics and yet so subtle and advanced that many professors, not to mention students, lack a true grasp of it.
The format of a novel allows Roberts to insert some melodrama into what otherwise is a set of economics lessons given by Ruth Lieber to Ramon Fernandez, a fictional Cuban-born tennis star attending Stanford. Fernandez serves up typical anti-market bias, and Lieber returns with statistics and logic on the other side. They volley back and forth.
I hope the book is a best-seller. I hope it becomes a hit movie. I certainly plan to recommend it to anyone who wants an introduction to economics, and to many people who don’t.
Ironically, shortly before my review copy arrived, Tom Keene of Bloomberg radio talked with me in (or you may have to go here and search for it–I can’t make a direct link work) that ranged over the topics of economic education and book recommendations. I forget what I said, but the headline they gave it was “Kling Calls Advanced Placement Economics ‘Horrible’.”
If you listen to the entire interview, you can hear me attempt to draw a libertarian lesson from the novel One Flew Over the Cuckoo’s Nest. The scene I describe shows the weakness of the desire for human freedom. It implies that some people prefer the security of tyranny, whatever their complaints about it.
READER COMMENTS
Jaap Weel
Jun 15 2008 at 2:25pm
You can get the podcast at http://digg.com/podcasts/Bloomberg_On_The_Economy/1006776 by clicking the “Listen” button.
Les
Jun 15 2008 at 5:38pm
I certainly agree that it is difficult to explain the concept of spontaneous order.
However, I have had some success by giving examples of systems other than economics that are based on spontaneous order, such as:
The human body.
The ocean.
The rain forest.
The desert.
Planet earth.
The universe.
brian
Jun 15 2008 at 5:55pm
I think the world would be a better place if more people understood the virtues of unmanaged, uncoordinated, unorganized, undesigned action.
This is a ridiculous statement. As Ronald Coase showed over 70 years ago, all action is coordinated, organized, and designed. The question is who is to do the planning.
Dr. T
Jun 15 2008 at 6:23pm
I agree with Les. Perhaps economics majors should take an ecology course. Understanding how ecosystems evolve, interact, and stabilize probably would help the students understand this similar process in non-governed economies.
Koen
Jun 16 2008 at 7:03am
I don’t feel comfortable when economics is compared to eco-systems. I know it’s an analogy that’s very tempting, but:
– ecosystems consists of plants and animals
– plants and animals don’t think
On top of that, a lot of comparisons with nature have been made in the past:
– societies are like organisms: they are born, they grow, they grow old and then they die, it’s an eternal law of nature
– life is a struggle, as Darwin has shown, so it’s best for Mankind if peoples fight each other so that the best races may survive
etc.
My favorite is language. Languages evolve spontaneously, they have certain rules and principles, yet we can all understand eachother.
Floccina
Jun 17 2008 at 9:15am
I think that might help if we avoided terms like invisible hand and market. Instead we should talk about what people should and should not be allowed to do. Then we can discuss what people, in and out of government, are likely to do in reaction to a proposed policy and incentives.
alexa-blue
Jun 18 2008 at 7:12pm
@ Koen, Alchian showed that thinking is neither necessary nor sufficient for a successful firm, while Dennett argues convincingly that treating nonthinking entities as if they are rational agents is useful for doing scientific work.
Comments are closed.