“A beautifully crafted and eminently fair review”

I’ve just written a book review for the eh.net website which I would not normally mention except that it attracted this comment from Tom Humphrey, one of the great historians of economics writing today:

A beautifully crafted and eminently fair review by Steve Kates. He takes a strong stand. But he does so in a spirit that few scholars could object to even if they disagree with him. In overall quality and readability his review rises far above the level of the average review. Wish all reviews could be so good. Nothing is as helpful and valuable as a good book review, if done right. Reviewing is an un- and under-appreciated art.

You will just have to forgive me from mentioning it like this, but such words from such an authority seldom come my way. This is how my review begins:

There was a time that one might have said that economic theory was comprised of a series of concepts that help explain the way communities provision themselves and became more prosperous over time. Economic theory as it developed came in the wake of the pamphleteers of more ancient days who saw the world around them and thought there had to be a better way of getting things done. They therefore wrote polemical accounts aimed at addressing various problems as they saw them, to try to persuade others to take up the approaches they were attempting to advocate….

Economists are the inheritors of the latest manifestations of the theory of the economy that more or less satisfies most of the profession. There are now theories of such astonishing abstraction that it is almost impossible any longer to look into what economists believe they know and truly understand how the economic world is structured or what can and should be changed to improve the operation of the productive aspects of our economies.

If you would like to read the entire review, you can find it here.

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10 Responses to “A beautifully crafted and eminently fair review”

  1. NoFixedAddress says:

    Thank you Steve.

  2. BorisG says:

    I have read the entire review. As a person with some experience in academic writing, I feel that the book you reviewed is useless. It is written by experts in narrow historical subjects obsessed with discussing minute historical details without even an attempt to present the subjects in broader context for the plebs that do not know such context in great detail. And since the greatest gap in economists’ knowledge is the context itself, this book does not even attempt to fill this gap. The only people who will read this will be narrow specialists on various aspects of history of economics.

    You agreed with the aspirations announced in the Introduction but were disappointed with the execution. But the introduction was probably written after most of the articles and could not guide the authors in any way…

    I do admire your way of writing a book review, where the book itself is first mentioned in the middle of 7th paragraph…

    If only you wrote your blog posts in the same friendly and dispassionate style…

  3. Faye says:

    Supply and not demand will keep us healthy, wealthy and wise.
    I vaguely thought “demand” was the power behind economies. Thank you Steve, for teaching me it isn’t. It means a lot to me. My more learned teacher friend still thinks that Keynes is the authority of how economies should be run.

  4. Herodotus says:

    Typical shit from Boris.
    Don’t worry about him, Steve. What he really knows a out economics would fit on a postage stamp.

  5. Perfidious Albino says:

    Kudos Steve

  6. Bad Samaritan says:

    Faye. Supply drives demand for goods. Services however need demand first. This latter because there is no inventory: no stock on hand. The hairdresser or accountant or cinema or dentist is idle until demand walks through the door.

    Meanwhile, in the modern world where manufacturing takes place in highly underdeveloped countries (the exact opposite to how it was in classical economic times) rich countries can “print money” without having first produced goods within their own countries, and still buy stuff that already exists.

    Example: the RBA “prints” 100 billion dollars and gives it to the Oz Govt in return for Bonds the Govt has likewise just “printed”. The Govt then spends some of it or else gives it to the citizenry. Now that printed money “orders” the services sector (hotels, cafes, tradesmen etc etc) into producing their services, as it also buys already-produced goods from overseas, so long as they will accept $A. No domestic goods production is necessary!

    Classical economics has been made obsolete. A flattering review of my next article will appear shortly.

  7. David Brewer says:

    Sounds like many essay collections with worthy aims but containing only abstruse articles on micro-issues of interest to almost no one. What causes them? Too much specialisation? Publish or perish? Too many people of only average intelligence getting Ph.Ds and becoming academics? Too much government money on the table for universities? Perhaps we need a collection of essays on the topic…

  8. BorisG says:

    worthy aims

    Worthy STATED aims.

    Too much specialisation? Publish or perish? Too many people of only average intelligence getting Ph.Ds and becoming academics? Too much government money on the table for universities?

    Probably all of the above.

    Of course it is standard practice to publish such articles on micro issues at a staggering pace in all sorts of scholarly journals. Yet when it is a book with worthy stated aims, yet with no attempt at a unifying thought or integration of any kind, it is more glaring.

  9. BalancedObservation2 says:

    Wow Steve. Very impressive. You’re more than a pretty conservative face. You do write and think beautifully.

    I do like the fact that people can disagree but still respect the quality of each other’s thought. That is something we are losing. And it’s a major problem. Nice to see it alive still here in the praise for your review.

    I’m certainly not the full bottle on classical economic theories – more like a drop. However we did cover them in my degree many years back and I still find my learnings from them useful in understanding what’s happening today.

    In the addiction to stimulus policy we seem to have forgotten some of the fundamentals. Don’t get me wrong I think stimulus policy has been necessary to smooth out glitches in the market. I probably think it’s more necessary than you do. Although I am fundamentally a believer in the market.

    There seems no end to stimulus policy, particularly in its monetary policy form. Although I note in recent times direct government stimulus spending is also looking like increasing dramatically and entrenching itself as well.

    Stimulus policy overall now seems to have taken on a life of its own. Popular commentators now seem to be toying with the idea we can even continue with it forever. As if by magic all we need to do is print money and everything will be just lovely.

    Maybe I’m just too pedestrian and old fashioned but I cannot see how we can make real economic progress in aggregate unless we can produce more with what we have already or with what we can discover or rearrange. That’s an extremely fundamental and basic point many seem to be fogetting.

    The idea of lifting productivity seems to be almost lost. Sure it’s ritually mouthed but there’s no real effort to introduce policies to boost it. I think such policies can involve market intervention but also the removal of interventional policies to let the market actually do more talking. I think the latter scares the daylights out of many. For example we’ve distorted the cost of capital on an almost permanent basis to address what are fundamentally only market glitches.

  10. Faye says:

    Thank you for replying Bad Samaritan, I appreciate your thoughts.

    I am no scholar of economics but here is my two bob’s worth. The world today is run by a few people within the world’s corporations, institutions, governments, lobbyists, etc who dictate the markets. It isn’t a free market, it is controlled. Consequently, manufacturing ended up in low wage China, whilst America lost jobs and companies from its manufacturing base in Middle America. A controlled outcome!

    The service industry’s stock is expertise such as you describe, doctors, tradesmen, hairdressers, actors, etc. Wouldn’t it be good to be an industry unto oneself and be able to entertain, fix a leak and pull a tooth? However, there is a dark side to the service industry and that is the rich taking advantage of lowly paid “servants”.

    The most important thing I think is JOBS which keep societies healthy, wealthy and wise. But the jobs have to create wealth and add value to what went before – ie profit. Your sentence “Supply drives demand for goods.” I agree. Ever bought something you didn’t need just because it was there or you ‘found’ something you needed? Supply the goods and the demand (purchase) follows.

    As far as quantitative easing, (another terminology to hide its truth from the masses), it stinks. How does printing money in fresh air create value? To me the risk comes first to create the good and only AFTER selling it, does the value kick in, the risk is covered and the profit is made. Of course it is not always that easy. How low can governments go? Worthless money buying worthless bonds. Or am I being too harsh?

    And at the same time the market hot-shots wager pushing up a company’s falsified worth although that company has never made a profit.

    The world’s economy has been taken over by the top powerful echelon of world players aka shysters who make their own rules, receive trillions and are on their way to turn us into their low paid servants.

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