Introduction to economic theory leans to the left; Five Economic Challenges, by Robert L. Heilbroner and Lester C. Thurow. Englewood Cliffs, N.J.: Prentice-Hall. $10.
This is a nice idea for a book, and for the most part a well-executed one at that. The authors are economists who are co-authors of a textbook, "The Economic Problem," that is now in its sixth edition. No doubt discerning the current popular appetite for any kind of writing that promises to make sense of the economy, they set out to whittle down the textbook to its most important points, rewritten to be clear "not only to readers of the financial pages, but to those who never get past the sports or fashion pages." Subject to some qualifications, they have suceeded.Skip to next paragraph
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The five challenges, to lift the suspense, are just about what one would guess: inflation, recession, big government, the falling dollar, and the energy crisis. In discussing each one, the authors do a good job of pointing out simple, important, but overlooked facts, the most consistently significant of which is this: Economists could solve each of these five problems tomorrow; the difficulty is not economics, but politics. It's refreshing to see such a statement in print. At a time when economists are threatening to overtake lawyers and post office clerks in public contempt, it's wise to remember that for them to prescribe medicine for our economic ailments is no longer much of a problem. But because the medicine is so often unpleasant, the patient may simply refuse to take it.
This is not to suggest that economics is a science of forces and counterforces as free of ideology as medicine or physics. It is not, and in treating that fact -- which it does forthrightly -- the book leaves something to be desired.
Perhaps it's impossible to write an ideologically neutral book on economics, but when it's intended explicitly for the unsophisticated reader, every attempt should be made. In this case it appears that the authors in fact made a conscientious attempt. Nonetheless, some bias remains and should be noted.
The book is more liberal than conservative, more Keynesian than monetarist. When the authors refer to an increase in oil prices causing an "inflationary shock," the idea would seem strange to the reader who believes -- along with the current secretary of the Treasury -- that inflation is a function of the money supply. To the reader who believes in free trade, the chapter called "Defending the Dollar" would appear to be an exercise in polemics that might be better titled "Propping Up the Dollar." The notion that inflation is a "zero-sum" situation in which each person's loss is some other person's gain, while recession is a "negative-sum" situation involving net losses to society, is hardly accepted as gospel by economists; yet it is presented as such.
The point is that the book has some leanings, which is probably inevitable, and the reader should recognize them. Overall, it may be too basic for the knowledgeable reader, though there is bound to be relief in ignoring details and taking the broad view for a few hours. But the book is best for the beginner, as the authors intended. The writing is easy and has some life, and the book is short --you'd be well advised to read this book, start reading the financial pages, and -- as the aut hors would agree -- keep your own counsel.