Tuesday, September 29, 2009

Is Edmund Conway Innocent?

Edmund Conway’s "50 Economics Ideas You Really Need to Know" published by Quercus at £9.99,is "well timed".

"Each of the topics – from Adam Smith’s invisible hand through to the more modern “happynomics” – follows the same four-page template, with bite-sized sections, timelines and key quotations pulled out.

Conway, the economics editor of The Daily Telegraph, has clearly done his research and the book is well-referenced given its compact size. It should be essential for anyone keen to make sense of the causes, ramifications and solutions to the current crisis and should be on the desk of everyone working in the City.

Purists may hate it, but then it is worth remembering that it was some of the purer economic theories that got us into this mess."

I have ordered my copy and will comment again when I have read Conway’s book.

Purists may hate it, but then it is worth remembering that it was some of the purer economic theories that got us into this mess.”

I agree, but it depends what he interprets as ideas we need to know.

For example, if Conway thinks we need to know about “Adam Smith’s invisible hand” as presented by modern economists along the usual lines of it controlling a process by which self-interests (in the extreme, even ‘selfishness’) are processed into always benefiting the public good, I will make an objection on the “purist” grounds that this is a wholly invented notion by the same modern economists who got us into the mess by turning an 18th-century metaphor into a myth.

Worse, they are unapologetic about what they taught their students since the 1950s that led them to believe the myth that gave comfort to entrepreneurs, politicians, media folk, and hapless employees and consumers, which inevitably had the result that reckless speculation, plus (never forget this) the role of governments and those who influenced them, together caused for the rest of us.

Anyway, let’s await the arrival of the book first, before damning Edmund, who may well be innocent of my premature suspicion.

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Blogger Lance said...

I did an Amazon book search on Conway's new book, and I'm sorry to report, he falls into the common error.

He calls Smith's invisible hand "shorthand for the law of supply and demand". Which you have covered in previous posts, showing the error in that connection.

Now, it might be reasonable to use the concept of the invisible hand as a pedagogical tool (which is Conway's point), to teach how market forces obtain equilibrium. However, invoking Smith as a proponent of the concept would be disingenuous.

11:52 pm  
Blogger Gavin Kennedy said...

Good point. The connection to Adam Smith's use of the metaphor is one major problem. He didn't link it to supply and demand or to markets. That is a modern invention.

I'm reading "The Invisible Hand in Economics; how economists explained unintended social consequences" by N. Emrah Aydinonat, 2008, which provides a detailed, scientific explanation for how Smith meant this interpretation.

However, it fails to show the link to Smith's usage in this sense (so far), except by quoting subsequent authors.

Conway's book is on its way from Amazon. I am not expecting too much.


5:40 am  

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