MAKING SENSE -- October 23, 2012 at 9:44 AM ET
A Few Books That Influenced Paul Solman
Economics correspondent Paul Solman. Photo by Elizabeth Shell
Paul Solman frequently answers questions from the NewsHour audience on business and economic news on his Making Sen$e page. Here is Thursday's query:
Brian Mecca: Can you cite two or three books that influenced your economic overviews? I love your programs. They help to dismantle myth and dissect the difficult into eatable bites.
Paul Solman: Just two or three? Jeez. Do they too have to be eatable?
OK. For an introduction to modern economic history, I still think Robert Heilbroner's "The Worldly Philosophers" is as good as it gets. (Heilbroner's editor was right in once telling him he hadn't written a book, but "an annuity.") A more recent history of economic thought reaching much further back in time that taught me a lot: Jerry Muller's "The Mind and the Market."
Of the classic philosophers both Muller and Heilbroner cover, I've been most swayed by Adam Smith and have actually done an annotated abridgement of his "Wealth of Nations" for classes I teach. But WofN is only half the Adam Smith story. Without reading his "Theory of Moral Sentiments," or at least the first chapter -- on "Sympathy" -- you miss the essence of Smith: a balance between the impulse of self-interest (he often called it "self-love") and our interest in, or love of, others.
The modern book that most shaped my thinking about this balance is Robert Frank's "Passions Within Reason."
My favorite exposition of the nature of markets (and of the role of chance in economics) is chapter 12 of John Maynard Keynes' "General Theory." Nassim Taleb's "Fooled by Randomness" (and "The Black Swan") confirm much of what I came to believe when I first read Keynes.
I could go on and on but let me finish with one suggestion you're probably not expecting: the first 25 paragraphs of Chapter 1 of "The Communist Manifesto," up through the paragraph: "Into their place stepped free competition, accompanied by a social and political constitution adapted in it, and the economic and political sway of the bourgeois class."
After that, Marx and Engels go a little nuts, and predict the self-inflicted demise of "the bourgeoisie," by which they mean the capitalist class or really, free-market capitalism itself. As you may have noticed, it didn't happen. But the revolutionary nature of global industrialization under a free market system has profound effects for good and not-so-good. It was true in 1848 as that system first blossomed. It is true today.
Mind you, I'm grateful for the bourgeoisie. Truth be told, I'm a card-carrying member myself. But my thinking about economics has evolved to appreciate balance, as opposed to the extremes of narrow self interest or global 'kumbayology.' That evolution has been a function of the works mentioned above.
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As usual, look for a second post early this afternoon. But please don't blame us if events or technology make that impossible. Meanwhile, let it be known that this entry is cross-posted on the Making Sen$e page, where correspondent Paul Solman answers your economic and business questions.