Tag: Gerard Book Recs

FT Best Books List

Professor Finkler points me to The Financial Times ten best books of 2014, including these that have been on my radar in one form or another:

We will be reading an abbreviated version (via Foreign Affairs) of the Calomiris and Haber book in Political Economy of Regulation course this term.  They forward a theory on why some banking systems are stable and have few crises (Canada, Scottland), whilst others are more susceptible to shenanigans and hence are less stable (U.S., England).

The Dixit book might be just what we are looking for in terms of a “textbook” for Econ 100, as the Very Short Introduction series is generally excellent.   I have also been collecting links for the Piketty book for the better part of the last year and a half.   I have read at least ten review pieces, and perhaps this summer I will sit down and slog through it.  More to come on that one.

Finally, I am starting up with John Lanchester, a name possibly more familiar to English majors than economists.  Nonetheless, Lanchester seeks to use “plain language” to convey complicated economics and financial terms to the layman.  More on that later.

Summer Reading

My summer reading is being colored by our new, exciting fall additions.  And people named Thomas.

Thomas Schelling, Micromotives and Macrobehavior.  This is a new one on the Freshman Studies reading list for the fall and parts of it promise to feature prominently in our instruction as we continue to emphasize the utility of abstract modeling.

Thomas Piketty, Capital in the 21st Century.  This is all the rage right now, and even the critical reviews say it’s worth a read.  So read it I will!

Glen Greenwald, No Place to Hide. As William Burroughs once said, “Paranoia is just having the right information.”  If you’ve ever wondered who General Keith Alexander is, what a FISA court is, or what the whole Edward Snowden thing is all about, Greenwald lays it out for you.   I was planning on doing some reading on security regulations, and this seemed like an appropriate preface…

John Mueller and John Stewart, Terror, Security, and Money.  This has been on my shelf taunting me for a couple of years.  It walks through security regulations and gives a sketch of how benefit-cost analyses are done (or not done).  This will make its way into ECON 444 in the Winter, I am certain.

Thomas Pynchon, Inherent ViceSpeaking of paranoia, nobody does it better than Pynchon. This is a quintessential summer read, the SoCal surf-side detective story from an iconic American author.   Here’s a taste:  

“It’s like Donald and Goofy, right, and they’re out in a life raft, adrift at sea? for what looks like weeks? and what you start noticing after a while, in Donald’s close-ups, is that he has this whisker stubble? like, growing out of his beak? You get the significance of that?”

Ain’t that the truth?  This one is coming to a theater near you, so read it before the hype-la.

William Nordhaus, The Climate Casino: Risk, Uncertainty and Economics for a Warming World.   A lot of interest on climate change and its effects, so I will probably revisit this one and do a seminar on it with interested students next year.  A great book for anyone interested in the nuts-and-bolts of the economics of climate change from the president of the American Economics Association.

Reading Break

As per usual when winter break hits week three, my phone is ringing off the hook* from students asking me for my reading suggestions.   So, here you go:

Charlie Calomiris and Steven Haber in Foreign Affairs, “Why Banking Systems Succeed — And Fail.”   It’s worth it for this gem alone: 

As George Bernard Shaw wrote, “The reasonable man adapts himself to the world: the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man.” Meaningful banking reform in a democracy depends on informed and stubborn unreasonableness.

Mike Veseth “Deconstructing and Disentangling the Disintermediation of the Wine Business.”  Professor Finkler turned me on to this nice piece on cutting out the middleman from The Wine Economist himself.   I should really read Wine Wars, which looks rather fascinating.   My grossly under-informed musings on the coming “wine shortage” here.

I just received William Nordhaus’ The Climate Casino: Risk, Uncertainty, and Economics for a Warming World in the mail and it seems like I should take a look at (though the audience seems to be the informed general audience rather than for academic economists).   It seems probable that I will adopt chunks of this for ECON 280 this Spring.  Nordhaus is the incoming president of the American Economics Association (!), so he has plenty of street cred among economics types.  Among the environmental crowd he is famous for his DICE and RICE models, and is certainly one of the most influential economists working  on matters of thinking about global climate change.  Paul Krugman was Nordhaus’ RA back in the day!  There is a high probability that I will offer this as a reading group option next term.

Speaking of Reading Groups, don’t sleep on The Great Leap Forward: 1930s Depression and US Economic Growth, the principal source material for this year’s Senior Experience read.    

And, last for this installment, I finally started making my way through Science Mart: Privatizing American Science.  Wow, this is an experience. If this looks good to you, let me know and we can talk.

*Well, maybe not “off the hook,” but I did get one email.

Read Plenty

First Down and Plenty!

Next term’s Economics Department Community Read will feature Francis Spufford’s fascinating Red Plenty: Inudstry! Progress! Abundance! Inside the Fifties Soviet Dream.  It is an idiosyncratic book that draws heavily on historical figures and events to characterize a period in the Soviet Union where central planners thought that central planning would actually work.

Though academics tend to take a dim view of works of historical fiction generally, University of Iowa historian Marshall Poe says this is clearly an exception:

Once in a great while, however, a book [of historical fiction] comes along whose truth is so powerful that even the literary critics and professors take notice. Francis Spufford’s Red Plenty: Industry! Progress! Abundance! Inside the Fifties Soviet Dream is such a book. It contains more “truth” about the Soviet project than an entire library of “serious” novels and dry-as-dust histories. If I had to recommend one book on the Soviet Union to someone who wanted to understand it, Red Plenty would be it. Read it.

The group will meet on most Tuesdays during winter term from 11:10-12:15, and you can sign up with Professor Galambos or Professor Gerard.   The reading should be an ideal complement for those taking Professor Galambos’ comparative economics systems course.

If you have some time in the next 50 days before next term starts, you might even be able to get a head start.

We do this every term, so you could pick up half a course over the course of a year.

The Triumph of Ed Glaeser

For those of you who are concerned that I don’t blog enough about economist Edward Glaeser, this post is for you.  I finally got around to finishing up his New York Times bestseller, Triumph of the City,  and it is indeed a triumph.  The tagline and thesis is “How Our Greatest Invention Makes Us Richer, Smarter, Greener, Healthier, and Happier,” with “the city” being the greatest invention. It’s a provocative read, and Glaeser’s argument will have you nodding your head one way or the other throughout the book.

Certainly, the book covers a lot of ground. If you’ve ever wondered why cities are where they are, he covers that.  If you want to know why cities like Buffalo, Cleveland, Pittsburgh have depopulated — and why many urban renewal efforts are destined for failure –he covers that, too. But perhaps the most interesting and most debatable subjects are in the environmental arena.  Glaeser spends several chapters on topics such as the “antiurban public policy trifecta” that foments urban sprawl — healthy highway funding budgets, the home mortgage interest deduction, and poor inner-city schools.  While many progressives might nod their head in agreement, they might be surprised to hear Glaeser take down of high housing prices in many urban areas as “the handiwork of regulation, not nature” (p. 191).  Indeed, Glaeser leverages this point in his comparison of Houston to New York City in terms of affordability (pp. 183-193), which is a very compelling explanation as to why we observe greater population growth in the southern U.S.

Really great stuff.

One of the marvelous aspects of the book is that Glaeser is not constrained to the format of the academic research paper, and consequently gets to show off how much he actually knows about his subject matter. There are a number of fascinating anecdotes and story lines as he proceeds to summarize and synthesize vast swaths of the urban economics literature –the paperback features 30 pages of endnotes and a 17-page research bibliography!

For a taste of Glaeser’s writing for the popular audience, you might check out his piece “Green Cities, Brown Suburbs” at the City Journal site.

I would pretty much recommend the book to anyone who might be interested in urban economics and the rise and decline of cities.  I also found myself marking down some of the academic papers that look to be of particular interest. Here’s a taste:

Matias Busso & Patrick Kline “Do Local Economic Development Programs Work? Evidence from the Federal Empowerment Zone Program,” Forthcoming in American Economic Journal: Economic Policy.

Raymond Fisman (2001) ‘Estimating the Value of Political Connections,” American Economic Review , 91(4):1095-1102

Edward L. Glaeser (1998) “Are Cities Dying?” Journal of Economic Perspectives, 12(2): 139–160.

Joshua D. Gottlieb & Edward L. Glaeser (2006) “Urban Resurgence and the Consumer City” Urban Studies 43(8): 1275-1299.

Edward L. Glaeser, Joseph Gyourko, & Albert Saiz. 2008.”Housing supply and housing bubbles,” Journal of Urban Economics.64(2): 198-217.

Edward L. Glaeser & Kahn, Matthew E., (2010) “The greenness of cities: Carbon dioxide emissions and urban development,” Journal of Urban Economics 67(3):404-418.

Edward L. Glaeser and, Bruce Sacerdote (1999) “Why Is There More Crime in Cities?” Journal of Political Economy  107(6): S225-S258.

Edward L. Glaeser, Jenny Schuetz, Bryce A. Ward (2006) Regulation and the Rise of Housing Prices in Greater Boston: A Study Based on New Data from 187 Communities in Eastern Massachusetts, Pioneer Institute for Public Policy Research,

Andrew Haughwout, Robert Inman, Steven Craig, Thomas Luce (2004) “Local Revenue Hills: Evidence from Four U.S. Cities,” The Review of Economics and Statistics 86(2): 570-585.

Thomas J. Holmes (1998) “The Effect of State Policies on the Location of Manufacturing: Evidence from State Borders,” Journal of Political Economy  106(4):667-705

Lawrence Katz and Kenneth T. Rosen (1987) “The Interjurisdictional Effects of Growth Controls on Housing Prices,” Journal of Law and Economics. 30(1):149-160

If anyone is interested in reading through a sample of these, this would make a very nice directed study project.

A Remarkable Fact

Continuing our string of posts about the EU, here is a remarkable but perhaps unsurprising fact:  Since gaining its independence in 1829, Greece has defaulted on or rescheduled its external debt five times (1826, 1843, 1860, 1893, and 1932).  Greece has been in default roughly half the time period since 1829.

That is culled from the astonishing This Time is Different: Eight Centuries of Financial Folly from Carmen Reinhart and Ken Rogoff.

I’m finally plowing through some of summer reading recommendations.  This particular recommendation was from 2010.

Early Holiday Book Recs

Ah, Winter Break is almost upon us, which means that it is almost time to get to my pile of books.  I’m not sure what came over me, but I just went out and bought a whole bunch more that I can’t possibly get to.

Here’s the latest in the queue:

Roger E. Backhouse and Bradley W. Bateman Capitalist Revolutionary: John Maynard Keynes.  I picked this one up after reading this New York Times piece where the authors argue that contemporary economists are lacking in the “worldly philosophers” department (see also the previous post).

Douglas W. Allen The Institutional Revolution: Measurement and the Economic Emergence of the Modern World.  A perfect little something for the New Institutionalist that has everything. Allen is an expert on transaction cost economics, co-author of some great work on agriculture contracts, and one of the funnier economists you are likely to ever meet. I will bet dollars to donuts that the book contains at least one example that you’ll be dropping at your next mixer (From the publisher: “Allen provides readers with a fascinating explanation of the critical roles played by seemingly bizarre institutions, from dueling to the purchase of one’s rank in the British Army”).  It says available December 1, but I got my copy in the mail today.

Eugene Fitzgerald, Andreas Wankerl, and Carl Schramm. Inside Real Innovation: How the Right Approach Can Move Ideas from R&D to Market – And Get the Economy Moving.  Schramm is from Kauffman, one of our recent visitors to the innovation class touted this as a must read, and I hear rumors that this will rear its head in Econ 405 next term.  A convincing trifecta!

Michael Lewis Boomerang: Travels in the New Third World.  If you read this blog semi-regularly, you’ve probably seen something about Lewis’ new compilation of economic disaster tourism writing.  I was going to recommend this as an e-book, but it has an unusually awesome dust jacket. Great for the plane.

Gretchen Morgenson and Joshua Rosner Reckless Endangerment: How Outsized Ambition, Greed, and Corruption Led to Economic Armageddon.  This was on my wish list and I no longer remember who tipped me off to it.  Looks great, if a bit thick.

I have some course-related pieces that probably aren’t such fab holiday gift ideas, but I will get to them as I get to them.


Sustainable Energy without the Hot Air

Sustainable Energy - without the hot airEsteemed alumnus Thomas Baer has been making the rounds on campus, visiting the I&E class and delivering a nice Science Hall Colloquium earlier today (here’s his bio).  Dr. Baer gave a rundown of his perspective on renewable energy technologies, particularly solar energy, and even more particularly solar energy made with silicon.

I’ll spare you the details of the role of photonics (since I didn’t quite understand those details), but I will second his recommendation of David MacKay’s excellent Sustainable Energy Without the Hot Air. I bought several copies of this and generally loan them out to anyone interested in energy policy.  Indeed, I was working with another colleague on developing a course around the book prior to moving to Lawrence a couple of years back.

If you haven’t borrowed my book already, you can download a copy here.

Thoughts on The Big Short

I finished up Michael Lewis‘s The Big Short and I think I found it worthwhile and poignant.   It’s a character-driven piece that follows some of the players — as the title suggests — who shorted the housing market and went to the bank.  To Lewis’s credit, he seems to do a pretty good job of explaining the crazy financial instruments created and deployed to bet against subprime mortgages.  To my debit (?), I still don’t understand what was going on with all of this.

The big villains of the story are certainly the ratings agencies, who could have stopped much of this chicanery in its tracks by rating garbage as garbage rather than as AAA investment-grade bonds.  But, perhaps a pithier point comes in the book’s denouement and is worth quoting at some length:

The people on the short side of the subprime mortage market had gambled with odds in their favor. The people on the other side — the entire financial system, essentially — had gambled with odss against them. Up to this point, the story could not be simpler. What’s strange and complicated about it, however, is that pretty much all the important people on both sides of the gamble left the table rich… Continue reading Thoughts on The Big Short

Old School Essay and Book Recommendation (Summer Reading, Part 3)

In a piece dear to the hearts of all my Econ 300 students, Master of rhetoric Deidre McCloskey lays out the case for teaching old school, Chicago economics.  Although I certainly beat the maximize! drum, the central intuition is certainly that profits drive economic activity in the long run. McCloskey traces the historical context back to Adam Smith:

The core of Smithian economics, further, is not Max U. It is entry and exit, and is Smith’s distinctive contribution to social science… He was the first to ask what happens in the long run when people respond to desired opportunities. Smith for example argues in detail that wage-plus-conditions will equalize among occupations, in the long run, by entry and exit. At any rate they will equalize unless schemes such as the English Laws of Settlement, or excessive apprenticeships, intervene. Capital, too, will find its own level, and its returns will be thereby equalized, he said at length, unless imperial protections intervene.

The essay is interesting throughout, and I certainly approve of her message on this point.

If you like the rhetoric of this piece, you might consider checking out some of McCloskey’s  other works, as she is indeed a prolific writer.  One recent add to my summer reading list is her update of The Rhetoric of Economics. In it, she argues that “economics is literary,” and that making a persuasive case is “done by human arguments, not godlike Proof.”

This is one of McCloskey’s continuing projects. This one began with her work in the 1980s, and continues to be discussed today. The preface to the second edition, in fact, begins with a discussion of why more people didn’t read past chapter 3 in the first edition.

Summer Reading, Part 1

Now that Commencement has passed, we can get on with our summers.  For me, that means I can try to take a bite out of the big, tasty stack of books I have been accumulating over the past 9 months.

These are my picks:

Michael Lewis, The Big Short.  Almost anything by Lewis is fun to read.  I was plussed* by the series he did for Vanity Fair, and recommend those highly. Last year we read his classic, Moneyball.

Peter Drucker, Innovation & Entrepreneurship.  This summer’s Reading Group pick.

Tim Harford, Adapt: Why Success Always Starts with Failure. Harford writes beautifully (well, for a guy on the economics beat) and his explanations are generally lucid, convincing, and theoretically sound.  More on Harford here.

Daniel Okrent, Last Call.  Tyler Cowen calls this history of U.S. prohibition “a masterpiece.” I am interested in the causes and consequences of criminalization of drugs and alcohol, and I am guessing excerpts of this will end up on my political economy reading list. Perhaps a course on the subject?

Ron Howard and Clint Korver, Ethics (for the real world): Creating a Personal Code to Guide Decisions in Work and Life.  Howard is considered the father of decision science by many (and founder of the purple balls!). Korver is a successful entrepreneur and fellow Grinnell alum! I like this quote on “ethical dilemmas,” which they say is often fundamentally misunderstood:

“When we pick up just about any newspaper, we read about people caught in ‘ethical dilemmas.’ But nine times out of ten, they are not dilemmas at all. They are conflicts between prudential gain and ethical action. They are issues of temptation.” (p. 38).


Philip Mirowski, Science Mart: Privatizing American Science. This looks like a clear winner. A historian I sometimes fraternize with is excited about this one, and I hear that “Mirowski is a wild man.” Let’s hope so. Expect to see this in Econ 450.

F.A. Hayek, The Road to Serfdom.  Following the Schumpeter Roundtable and Discovering Kirzner, we are picking up Hayek this fall as our department reading pick.

Jonathan Franzen, Freedom. Well, I am going to be on the beach for a week.

*It’s possible that “plussed” isn’t a word.  Perhaps it should be.

On the Road with F. A. Hayek

This fall, Professor Galambos and I will be leading a group read of F.A. Hayek’s The Road to Serfdom. The course will be offered for one unit as DS 391 — On the Road with Hayek, and we will have a sign up and coordinate times at the beginning of fall term. I expect with this book we will probably meet eight of the ten weeks.

If you are the type that lets one-unit courses slide, you might consider picking up the book and giving it a once over this summer in preparation for fall term. I suggest you get the edition edited by historian of economic thought, Bruce Caldwell.

For those of you looking to kill an hour with a podcast, here’s Caldwell at EconTalk, talking about Hayek.

Here’s Hayek’s classic American Economic Review piece, “The Use of Knowledge in Society.”  And here.  And here’s Hayek’s Nobel lecture, “The Pretence of Knowledge.”

See you this fall.

UPDATE:  You can get an add course sheet outside of our offices.

(Not so) Undercover Economist

The Undercover Economist, Tim Harford, is all over the internets these days.  He has just come out with a new book, Adapt: Why Success Always Starts with Failure — a meme no doubt familiar to the Pursuit of Innovation crowd.  Beginning Monday, you can hear an extended discussion about the book over at our favorite economics podcast,  Econtalk. I have penciled this one in on my summer reading list.

Harford also recently named his top five books that give unexpected lessons in economic principles, a list that included Klein & Bauman’s Cartoon Guide to Economics (my intro textbook!), Charles Perrow’s classic, Normal Accidents, and Cory Doctorow’s For the Win, a book that should “appeal to any enthusiastic player of MMO [Massively Multiplayer Online] games.”  Huh.

Undercover. Unexpected.  Un for the whole family.

Rethinking US Economic History

Economic historian Alexander Field’s new book, The Great Leap Forward: 1930s Depression and US Economic Growth, is making big waves, and is one I’m considering seriously for the Senior Experience book option for next year.

Here’s Field in the New York Times:

The conventional wisdom is that the war somehow magically transformed the doom and gloom of the Depression into the U.S. standing like a colossus astride the world in 1948. My counterargument is that potential output expanded by leaps and bounds between 1929 and 1941, and it was this expansion in capacity that both helped us win the war and established the foundations for postwar prosperity.

Tyler Cowen discusses it.

Arnold Kling reviews it.

This looks like a winner.   We’ll see where I’m at this fall.

Stuck in The Mudd

Looking to pick up some reading recommendations for the upcoming Reading Period?  My pick is Tyler Cowen’s e-book, The Great Stagnation, which has been something of a sensation since its release (if by sensation you mean, which I do, a bunch of economists and policy wonks have been reading and reviewing it).  Plenty of buzz about this one, and at $4, it is about the price of a magazine.

Just not that into Stagnation? We’ve got more.  Professor Finkler also just recommended a slew of books to me, including these:

Most of these are stocked over on the shelves of The Mudd (subject to availability, of course), along with a constant stream of tasty new releases.  Just scanning that RSS feed, I see Michael Lewis’ breezy The Big Short as an appetizer(library info; more on Lewis here).  And the fascinating-looking title LinkEntrepreneurship, innovation, and the growth mechanism of the free-enterprise economies edited by Sheshimski, Strom, and Baumol could be a very enticing main course. I might just go run that one down.

You might consider adding to that list Branko Milanovic’s new book, The Haves and the Have-Nots (discussed here), that I plan to order presently.

For those of you who only do things for credit, there is a rumor floating around the department that as a follow up to the Schumpeter Roundtable, we will be Discovering Kirzner by reading Israel Kirzner’s Competition and Entreprenuership this Spring term. It was also recently announced that the Spring Lawrence community read will be Cheap: The High Cost of Discount Culture. Professor Galambos and I are both signed up for that one.

Finally, I am right in the middle of Steven Johnson’s Where Good Ideas Come From, which my colleagues mostly seem to like.  Something you can probably read in the car, if it wasn’t for the 6-point font footnotes.


The Strangest Man?

All right, who said it?

I am not interested in literature, I do not go to the theatre, and I do not listen to music. I am occupied only with theories.

Is that Professor Galamobos talking about what he did on his sabbatical leave? His advice to students taking Econ 300 during winter term?  Professor Brandenberger talking about how LU professors used to be back in the day? Our new mantra for the Math-Econ major?

Not at all.

It’s Nobel Prize winning physicist, Paul Dirac, describing the work ethic that led him to international superstardom, if only he would have desired such a thing.  I picked up Graham Framelo’s biography of Dirac this past summer, and I would definitely recommend it as a good read for break, or a gift to that bookworm in the family.

Here’s a short review:

Continue reading The Strangest Man?

Talk Like a Pirate Day

It’s Talk Like a Pirate Day over at The Mudd, and elsewhere.

Perhaps you should celebrate by reading Peter Leeson’s The Invisible Hook, an economic analysis of piratical organization.  Or perhaps the JPE piece it was based on. Or even one of its many favorable reviews.

Here’s the gist:

The idea of the invisible hook is that pirates, though they’re criminals, are still driven by their self-interest. So they were driven to build systems of government and social structures that allowed them to better pursue their criminal ends.

I read this over the summer and found it interesting that the classic pirates created reasonably democratic governance structures with built-in checks and balances, whereas most organized crime we think of today — including modern-day pirates, I’d guess — is more conventionally hierarchical.

Is Gladwell’s Perspective on K-12 an Outlier?

I just finished up Malcolm Gladwell’s Outliers: The Story of Success, with a rather unconventional take on the U.S. public schools.  The girl he is discussing, Marita, is from a single-parent, low-income household.  He is concluding a chapter on an experimental public school program in New York City, the Knowledge is Power Program (KIPP, for short).

Marita doesn’t need a brand-new school with acres of playing field and gleaming facilities. She doesn’t need a laptop, a smaller class, a teacher with PhD, or a bigger apartment. She doesn’t need a higher IQ or a mind as quick as Chris Langan’s (a genius discussed earlier in the book). All those things would be nice, of course. But they miss the point. Marita just needed a chance.

That is both a conclusion about our schooling, as well as a conclusion about how our society produces talent.  Gladwell is the master storyteller, and in Outliers he writes convincingly how a combination of arbitrary advantages mixed with an extraordinary work ethic can compound to produce “outlier” talents ranging from Bill Gates to Canadian professional hockey players.

My way or the Norway?

Indeed, Gladwell is explicitly discounting exceptional talent as a significant factor in determining exceptional success.  Instead, he contends that there is some threshold level at which incremental improvements don’t matter.  So, there are many people who could have been Bill Gates, but Bill Gates was the only one with that level of ability that happened to fall into a situation that allowed him to become such a dominant captain of industry.

Those interested in a discussion on this point far outside of my research domain might consult the special issue of Behavior Genetics on people with high cognitive ability.  In that issue, psychologist David Lubinski addresses Outliers and concludes: “The vast majority of scientists in talent development would say that it takes at least ability, ambition, and opportunity; there is no need to minimize the importance of any of these when it takes all three.”

I am certainly not qualified to discuss the literature on talent development, so I will leave it at that.  My feeling is that Gladwell consistently conflates more mundane successes associated with someone like Marita with extraordinary successes of someone like Mario Lemuiex.  This makes it both easier and more difficult to attack his argument.  On the one hand, I completely buy the argument that most successful people are a product of chance and of hard work — there are few truly self-made men.  On the other hand, it’s hard to believe that truly great scientists and mathematicians aren’t blessed with a skill set far beyond the domain of the 95th-percentile student.

800 Years of Ineptitude

For today’s recommended reading, The New York Times profiles Carmen Reinhart and Kenneth Rogoff, authors of This Time Is Different: Eight Centuries of Financial Folly.

You may recall this title from our summer reading recommendations that we posted a few weeks ago.  You can find a paper approximation of the book here and a summary of its principal findings here.

Both of these economists seem to be pretty interesting characters and the article is a fun read.

I&E Reading Group, Prophet of Innovation

I’m sure that I am not the only member of the I&E Reading Group plodding through Thomas McCraw’s enthralling Prophet of Innovation this week.  I will also start in on the “live blog,” as promised.

The book is a linear progression through both his life and his thinking about economics.  One of the clear messages, and, indeed, a clear message of virtually any history of thought book, is that the thinker is shaped by his or her environment (see, for example, The Worldly Philosophers and New Ideas from Dead Economists).   McCraw certainly paints Schumpeter (a.k.a., Jozsi, Schum, Schumy, Schump, Go-Go) as a product of his environment.   From his mother’s social climbing (Chapter 2 Summary:  Jozsi was something of a mama’s boy) to the horror and devastation of World War I to his spectacular failure as an investment banker, each of these experiences is linked to Schumpeter’s intellectual and professional trajectories.

McCraw divides this world up into three parts: L’Enfant TerribleThe Adult, and The Sage.  By the time he’s 40, he’s already “played many parts — boy genius, Austrian aristocrat, English gentleman, Cairo attorney, Viennese economist, university professor, minister of finance, investment banker, socialite, and free-spirited Casanova” (124). Not to mention, triumphant swordsman in a duel with an uncooperative librarian (I’m looking at you, Mr. Gilbert).  That’s quite a whirlwind.  Not incidentally, he had also written some defining pieces, including The Theory of Economic Development and “The Crisis of the Tax State,” which made him almost world famous.

So, this week and next, I will be “live blogging” the book.  Rather than recounting the fascinating details of Schumpeter’s life in the “live” blog, I am simply going to offer up some thoughts and topics for discussion that I have carved out and that other members of the group have provided me.   I will likely have my first post up later tonight.

You can get a listing of our progress by clicking on the tag “live blog” below.   I hope it’s helpful.