Tag Archives: economics

The Great Economists: How Their Ideas Can Help Us Today – Linda Yueh

Joan Robinson points out that if markets are imperfectly competitive, then firms can earn economic rents because rents aren’t entirely eroded by competition. In that situation, firms have market power…a theory of ‘monopsony’ [refers] to the market power that firms can wield in the labour market alongside the more familiar and established term, monopoly power, where firms have market power in the product market and can charge more for a good or service above their costs, earning them monopoly profits. Monopsony power allows employers to pay workers less than the value of their output, and keep more for themselves.

The book presents a selection of 12 illustrious economists, from the modern era to contemporary times. Linda Yueh introduces the reader to the ideas, times and life of those economists, but also speculates how one such economist would answer to the hot questions of today, from his/her perspective.

The Great Economists includes:
Adam Smith
David Ricardo
Karl Marx
Alfred Marshall
Irving Fisher
John Maynard Keynes
Joseph Schumpeter
Friedrich Hayek
Joan Robinson
Milton Friedman
Douglass North
Robert Solow

Linda Yueh is actually an economist, a fellow of the University of Oxford and assistant professor at the London Business School. A formal lawyer and journalists, she tries to present the groundbreaking ideas of those 12 economists in simple, non-academic terms. On that front, Yueh marvelously encapsulates the times and concepts put forward by those famous economists in the last three centuries.

The book is structured in 12 main chapters, each presented an economist. Each chapter is further divided into an introduction to the economist’s ideas, a presentation of his/her times, a study of today’s societies, with no focus on a particular country, and finally, a subsection where the economists’ ideas are tested to see how they can help us for today’s problems.

The book is truly enjoyable, particularly for a reader accustomed with the domain. It is a great reminder of important economic ideas. It is an interesting read for someone outside the domain as well, as it acts as a textbook, including a dictionary of terms at the end. I particularly liked the short biography for each economist and the brief presentation of the times they lived, bringing many insights into the motivations for their research.

Maybe exploring more the answers that such economists could have given to today’s questions would make the book even more interesting. I would have been delighted to see more economists added into the book, as each was carefully presented through the lens of their time and with a well-written, thoughtful and clear introduction of their ideas.

Overall, a great book to read that has a deserved place on my bookshelf.

Energy and Civilization: A History – Vaclav Smil

Despite many differences in agronomic practices and in cultivated crops, all traditional agricultures shared the same energetic foundation. They were powered by the photosynthetic conversion of solar radiation, producing food for people, feed for animals, recycled wastes for the replenishment of soil fertility, and fuels for smelting the metals needed to make simple farm tools.

The books from Vaclav Smil are a trove of knowledge on energy evolution. This book discusses the evolution of human energy advances over time, from agriculture to weapons.

The book reads more as an academic article, with a plethora of references and sources. One sixth of the book is just references. Very dense in knowledge and explanations, it overwhelms the reader with the sheer depth of analysis.

Smil tries to use largely a single energy unit, joules, to measure everything, from the various techniques to harness animals to work to the different ways to pass water through the watermills. The purpose is to quantify the evolution of human energy efficiency over time.

The book is encyclopedic in its depth and range, truly a history. The book dryness of writing and data is broken by very informative and engaging boxes, explaining various facts and developments.

The only downside is the grammar errors found here and there sometimes.

I was impressed by the precision and correct analysis of energy sources and transformations, missed by many pundits.

Also impressive is the general neutral tone regarding various sources that the author manages to impose.

Overall, an incredible book, THE book on energy history.

End This Depression Now! – Paul Krugman

There’s another element in the euro crisis, another weakness of a shared currency, that took many people, myself included, by surprise. It turns out that countries that lack their own currency are highly vulnerable to self-fulfilling panic, in which the efforts of investors to avoid losses from default end up triggering the very default they fear.

This is an economics book by the Nobel awarded economist, Paul Krugman, where he presents his neo-Keynesian ideas in dealing with the 2008–2012 global recession. Krugman sees as the solution to economic crisis an increase in government expenditure, to balance the consumer decline in purchasing and reignite the economy. Government expenditure is made by the central bank (Federal Reserve in the US) creating money, with which governmental bonds, for example, are purchased, which in turn are used to make governmental projects or purchases.

In the European Union, the central bank bought eurobonds and company bonds, that is corporate debt, debt used by companies for investment or keeping production, in order to stop the vicious circle.

On macro-economics of depressions: the Keynesian view.

The US indeed had an expansionary economy, but Professor Krugman considered that the level of government expenditure was not enough to alleviate the consequences of the economic crisis. Ben Bernanke, the Federal Reserve Chairman, was a history economist and an expert in the Great Depression.

For the austerity policies adopted in several countries of the European Union, he considered that they only create unnecessary pain, calling for the stop of austerity and the end of economic depression.

His economic ideas are drawn from the Great Depression that took place mostly during the 1930s, of which Keynes considered that the government should intervene and balance the private production with public demand, until the economy is reignited. Indeed, largely until the New Deal of President Roosevelt, the Federal Reserve focused mainly on keeping the federal budget and the inflation in check. To recall, the New Deal created numerous public projects, such as government buildings, airports, hospitals, schools, roads, bridges and dams, around 35,000 overall.

A critical review comes from the Austrian school of economy, which notes that, despite significant spending from governments, the crisis continued, hence the measures were inefficient. Furthermore, the reasons that created the crisis will not be corrected, if the government kept pouring money.

Professor Krugman got his Nobel prize for his contributions to New Trade Theory and New Economic Geography.

The book manages to give a solid macro-economy insight into the world economic crisis of 2008-2012, while having an attractive writing style.