Join getAbstract to access the summary!

Economics Rules

Join getAbstract to access the summary!

Economics Rules

The Rights and Wrongs of the Dismal Science

W.W. Norton,

15 min read
10 take-aways
Audio & text

What's inside?

When can you trust economists to be right or wrong? And how do you know?

  • 0.5×
  • 0.75×
  • 1×
  • 1.25×
  • 1.5×
  • 1.75×
1×

Editorial Rating

8

Recommendation

Economist Dani Rodrik critiques the discipline of economics as a social science, acknowledging its occasional successes but also panning its many failures. He includes historical context, theory and clear explanations of how economists tackle real-world problems, and he manages to do all this without littering the text with mathematical equations or Greek letters intelligible only to specialists. Rodrik’s argument, which is quite accessible to the noneconomist, is educational and almost entertaining. getAbstract believes students, teachers and mentors dealing with economics and fiscal policy will appreciate such a rare feat in a book about the dismal science.

Summary

“The Science of Economics”

Economists are often at odds with their peers in the social sciences. Social scientists believe economists are inclined to use simple approaches to examine and explain complex situations. Conversely, economists see social scientists as wordy, “soft,” and lacking discipline and sound empirical analysis. Nevertheless, many examples abound that illustrate the successful application of economics to real-world needs, including the following:

  • The Bretton Woods system, which established an international economic order that endured for more than 30 years.
  • Congestion pricing, which successfully uses economic tools to ameliorate traffic.
  • Conditional cash transfer programs, which reward lower income individuals for making decisions that policy makers want to encourage.

But social applications of economics don’t always work. Failures often are due to the mathematics or the model underlying the economics. Mathematics in economics is controversial. According to economist Ha-Joon Chang, author of Economics: The User’s Guide, “95% of economics is common sense – made to look difficult with the use of jargons and mathematics...

About the Author

Economist Dani Rodrik is a professor of international political economy at Harvard University’s John F. Kennedy School of Government and the author of The Globalization Paradox.

Comment on this summary