Appearing informed about contemporary affairs requires familiarity with economics. Being informed, especially understanding current political debates, demands real grounding in macroeconomic policy. Economics today is more than an influential discipline. Leading economists – Paul Krugman, Jeffrey Sachs, Amartya Sen, Joseph Stiglizt and Larry Summers – are public intellectuals and thought leaders. Many of the big political issues we are wrestling with as a nation are really about macroeconomic policy.
While mulling this over reading a Paul Krugman op-ed piece in the New York Times, I started questioning my economic knowledge. Yes, I do know a bit of neoclassical economics and Keynes, but I do I really grasp the distinctions? Not all economists agree with Krugman. And what about the economic aspects of Marx? In fact, the more I thought about it, the more I realized that leading economists often disagree. Like that conversation you have with someone you know – and then suddenly you find yourself having forgotten their name – the issue of “knowing” economics stuck with me. Maybe a fresh look was needed. After scanning through Wikipedia and what I could troll from the web, I decided to look for a more systematic study.
What should college educated adults know about macroeconomics? Doing the math does not seem as important as understanding what the math reveals. Standard college textbooks were not all that helpful. Then I came across Richard A. Wolff and Steven Resnick’s Competing Economic Theories: Neoclassical, Keynsian, and Marxian. The authors, two respected economists who collaborated earlier, are not polemicists. They are not interested in converting minds to a particular point of view. Instead, they seek clear explication.
The book’s purpose is elegant and straightforward: explain and compare the three main economic theories. Special attention is given to the philosophical underpinnings of each theory. These first precepts have great consequences that the authors follow through to their policy implications. In other words, each of the economic theories has its own logic that dictates its area of focus, its areas of inquiry, and the kinds of answers it provides. It is fascinating how a few basic tenets determine so much of the work of economics – and a variation in those tenets effects tremendous change.
Across the board social outcomes of differing economic policies, based on differing economic theories, are also examined in the book. Comparative Economics is not a dummies book. It requires attention and thought, and it could be a supplemental reading in an upper level economics course. It is well-written book, and neither dry nor dismal. Working through it has great return on investment. If you find yourself wondering about macroeconomics, I recommend it.
Not that I would ever advocate reading textbooks for fun. . . .
David Potash