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The Economist's View of the World

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The Economist's View of the World

And the Quest for Well-Being

Cambridge UP,

15 min read
8 take-aways
Audio & text

What's inside?

This updated classic explains how economics affects the choices society and government make.


Editorial Rating

9

Qualities

  • Background
  • Concrete Examples
  • Eloquent

Recommendation

Professor Steven E. Rhoads didn’t start out as an economist, and that may be why, in 1985, he was able to write an economics book for noneconomists that went on to become a bestseller. In this update, his now-classic text retains its readable style in presenting clear and thought-provoking examples of economic principles applied to real-life issues. Rhoads offers a full-throated endorsement of the role of economists in political decision making, but his tone is neither partisan nor ideological – except in defense of free markets. 

Summary

All economists appreciate the power and capability of markets.

Economics contains many schools of thought and a range of opinions, but all economists tend to agree with philosopher Adam Smith’s original message: Markets provide price signals and incentives that allocate scarce resources effectively. A brief study of the dense interconnections in trade can reveal just how much communication, calculation and decision making a well-functioning market can achieve automatically.

This belief in markets underlies economists’ reactions to certain controversies. For example, when people complain about the shrinking size of airline seats, economists tend to believe that, as long as everything is transparent to the customer, a range of seat sizes can suit a range of preferences, thereby maximizing efficiency. Similarly, many people support rent controls, but nearly all economists know that the inevitable results of restricting market prices is rationing, waiting lists and even bribes.

Opportunity cost, marginal analysis and cost-benefit analysis are the tools on which economists rely.

Economists...

About the Author

Steven E. Rhoads is a professor emeritus of politics at the University of Virginia. He is also the author of Taking Sex Differences Seriously and Incomparable Worth: Pay Equity Meets the Market.


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