Classical political economy and modern theory

The economic socialisation of young peopleClassical political economy and modern theory: Essays in honour of Heinz Kurz / Christian Gehrke
London: Routledge, 2012. 400 p.

Heinz Kurz is recognised internationally as a leading economic theorist and a foremost historian of economic thought. This book pays tribute to his outstanding contributions by bringing together a unique collection of new essays by distinguished economists from around the world.
Classical Political Economy and Modern Theory comprises twenty essays, grouped thematically into five sections. Part I examines political economy and its critique, Part II looks at entrepreneurship, evolution and income distribution, Part III discusses Cambridge, Keynes and macroeconomics, Part IV explores crisis and cycles, whilst Part V is dedicated to personal reminiscences. The essays in this book will be an invaluable source of inspiration for economists interested in economic theory and in the evolution of economic thought. They will also be of interest to postgraduate and research students specialising in economic theory and in the history of economic thought.
The essays in this book will be an invaluable source of inspiration for economists interested in economic theory and in the evolution of economic thought. They will also be of interest to postgraduate and research students specialising in economic theory and in the history of economic thought.


Mass flourishing

The economic socialisation of young peopleMass flourishing / Edmund Phelps
Princeton, US: Princeton Univ. Press, 2013. 378 p

In this book, Nobel Prize-winning economist Edmund Phelps draws on a lifetime of thinking to make a sweeping new argument about what makes nations prosper--and why the sources of that prosperity are under threat today. Why did prosperity explode in some nations between the 1820s and 1960s, creating not just unprecedented material wealth but "flourishing"--meaningful work, self-expression, and personal growth for more people than ever before? Phelps makes the case that the wellspring of this flourishing was modern values such as the desire to create, explore, and meet challenges. These values fueled the grassroots dynamism that was necessary for widespread, indigenous innovation. Most innovation wasn't driven by a few isolated visionaries like Henry Ford; rather, it was driven by millions of people empowered to think of, develop, and market innumerable new products and processes, and improvements to existing ones. Mass flourishing--a combination of material well-being and the "good life" in a broader sense--was created by this mass innovation.

Yet indigenous innovation and flourishing weakened decades ago. In America, evidence indicates that innovation and job satisfaction have decreased since the late 1960s, while postwar Europe has never recaptured its former dynamism. The reason, Phelps argues, is that the modern values underlying the modern economy are under threat by a resurgence of traditional, corporatist values that put the community and state over the individual. The ultimate fate of modern values is now the most pressing question for the West: will Western nations recommit themselves to modernity, grassroots dynamism, indigenous innovation, and widespread personal fulfillment, or will we go on with a narrowed innovation that limits flourishing to a few?

A book of immense practical and intellectual importance, Mass Flourishing is essential reading for anyone who cares about the sources of prosperity and the future of the West.


The Microtheory of Innovative Entrepreneurship

The Microtheory of Innovative EntrepreneurshipThe Microtheory of Innovative Entrepreneurship / Baumol, William J.
Princeton: Princeton University Press, 2010. 246 p.

Entrepreneurs can be “replicative” or “innovative.” A replicative entrepreneur is one who organizes a new business firm. An “innovative entrepreneur” is one who finds new ideas and puts them to use. The innovative entrepreneur is not covered in basic economic textbooks. The development of theory has been impeded by the heterogeneity of the product and the view that activities of entrepreneurs are very risky and beset with discontinuities. Baumol seeks to overcome these impediments.
"Even as innovative entrepreneurship has emerged as the goal for policymakers around the globe, economists have struggled to find its proper place in microtheory. No more. In this pathbreaking new book, William Baumol provides the blueprint for understanding the crucial role of entrepreneurship and its contribution to innovation and ultimately economic growth. This lively and thoughtful book highlights the distinct role entrepreneurs play in the economy and reveals why the entrepreneur can no longer remain the invisible man in economic theory."


Beyond mechanical markets

Beyond mechanical marketsBeyond mechanical markets: Asset price swings, risk and the role of the state / Roman Frydman and Michael D. Goldberg
Princeton: Princeton University Press, 2011. 285 p.

The year 2008 saw not only financial failure but the failure of an idea, the economic theory in which financial markets are mechanically determined to settle at equilibrium and economically efficient prices. So why did standard models in financial economics not see the crisis coming? What can be done to keep a repeat of this crisis from happening? These are the questions at the heart of Roman Frydman and Michael D. Goldberg’s book. The authors not only show the insufficiency of current theory, they also present an alternative, “Imperfect Knowledge Economics”, that aims to address these issues and give very different policy recommendations from the ones considered en vogue now. What’s more, Beyond Mechanical Markets gives us a doctor’s prescription for dampening – and possible even avoiding altogether – the next economic crisis.


Regulation versus litigation

Regulation versus litigationRegulation versus litigation: Perspectives from economics and law / Daniel P. Kessler
Univ. of Chicago Press: Chicago, 2011. 332 p.

The efficacy of various political institutions is the subject of intense debate between proponents of broad legislative standards enforced through litigation and those who prefer regulation by administrative agencies. This book explores the trade-offs between litigation and regulation, the circumstances in which one approach may outperform the other, and the principles that affect the choice between addressing particular economic activities with one system or the other. Combining theoretical analysis with empirical investigation in a range of industries, including public health, financial markets, medical care, and workplace safety, Regulation versus Litigation sheds light on the costs and benefits of two important instruments of economic policy.


Beyond the invisible hand

What money can't buyBeyond the invisible hand / Kaushik Basu
Princeton, Princeton Univ. Press: 2011. 273 p.

One of the central tenets of mainstream economics is Adam Smith's proposition that, given certain conditions, self-interested behavior by individuals leads them to the social good, almost as if orchestrated by an invisible hand. This deep insight has, over the past two centuries, been taken out of context, contorted, and used as the cornerstone of free-market orthodoxy. In Beyond the Invisible Hand, Kaushik Basu argues that mainstream economics and its conservative popularizers have misrepresented Smith's insight and hampered our understanding of how economies function, why some economies fail and some succeed, and what the nature and role of state intervention might be. Comparing this view of the invisible hand with the vision described by Kafka - in which individuals pursuing their atomistic interests, devoid of moral compunction, end up creating a world that is mean and miserable - Basu argues for collective action and the need to shift our focus from the efficient society to one that is also fair.
Using analytic tools from mainstream economics, the book challenges some of the precepts and propositions of mainstream economics. It maintains that, by ignoring the role of culture and custom, traditional economics promotes the view that the current system is the only viable one, thereby serving the interests of those who do well by this system. Beyond the Invisible Hand challenges readers to fundamentally rethink the assumptions underlying modern economic thought and proves that a more equitable society is both possible and sustainable, and hence worth striving for.
By scrutinizing Adam Smith's theory, this impassioned critique of contemporary mainstream economics debunks traditional beliefs regarding best economic practices, self-interest, and the social good.


How much is enough? : Money and the good life

What money can't buyHow much is enough? : Money and the good life / Robert Skidelsky and Edward Skidelsky
New York, Other Press, 2012. 243 p.

What constitutes the good life? What is the true value of money? Why do we work such long hours merely to acquire greater wealth? These are some of the questions that many asked themselves when the financial system crashed in 2008. This book tackles such questions head-on. The authors begin with the great economist John Maynard Keynes. In 1930 Keynes predicted that, within a century, per capita income would steadily rise, people’s basic needs would be met, and no one would have to work more than fifteen hours a week. The Skidelskys explain why Keynes was mistaken. Then, arguing from the premise that economics is a moral science, they trace the concept of the good life from Aristotle to the present and show how our lives over the last half century have strayed from that ideal. Finally, they issue a call to think anew about what really matters in our lives and how to attain it.