From the May-June issue of Cato Policy Report (I did not write the preview, or even read it before it came out, but it provides a good foretaste).
while Kling’s primary audience is other scholars of economics, his writing also provides a first-rate introduction to economic ideas that are easily accessible by students with little or no previous training in economics.
Think of this as the book that every first-year economics graduate student should read (but won’t).
Here is a provocative sentence:
Kling argues that post-World War II economists have mistakenly placed the concepts of scarcity and choice at the center of economic thought.
While scarcity and choice are certainly important concepts in economics, I have two problems with making them central.
1. Scarcity and choice are concepts that focus on a fixed pie. Yet economic growth and the enlargement of the pie are what matter most.
2. Scarcity and choice are taught using “2×2″ economics. That is, a choice between 2 activities, hiding the fact that there are millions of specialized tasks in the economy.
These two problems are related. The growth of the pie is the effect of specialization that is vast and mind-boggling in its complexity.
Also, consider where macroeconomics fits in. Your choices are:
1. Treat macro as something that departs from and even contradicts micro. This is the way things worked in the 1960s, and it is where most of the profession seems headed again today.
2. Do macro as general equilibrium theory. This was the attempt to integrate micro and macro in the 1980s, an attempt that strikes me (and others) as having failed.
3. Think of both micro and macro in terms of patterns of specialization and trade. In macro, the focus is on the process of old patterns becoming unsustainable and the process of finding new patterns that are sustainable.
The book makes the case for (3). Along the way, as the preview points out, it takes a hard swipe at MIT-influenced economics for being mistakenly mechanistic in its approach to both micro and macro.