"Magrathea is a myth, a fairy story, it's what parents tell their kids about at night if they want them to grow up to be economists, it's…" Douglas Adams, Hitchhiker's Guide to the Galaxy.
What books should you give your children (nieces, nephews, friends) if you want them to grow up to become economists?
Harry Potter's magical universe is a Thatcherite's nightmare with its protectionist restrictions against magic carpet imports and bloated public sector. With a tri-metalic (gold/silver/bronze) currency and no paper money, effective monetary policy is impossible. The economic fundamentals of the wizarding world are basically unsound.
What about some of the classic children's literature? The entire Chronicles of Narnia is a paean to autarky. Devotees know that other countries lie north and south of Narnia, but their inhabitants are (mostly) evil and untrustworthy, and any contact, including trade, is generally avoided. The Lord of the Rings? The Battle for the Shire is a Luddite uprising, a fight against economic development and greater integration of the Shire with the rest of Middle Earth.
The recent series The Hunger Games does feature entrepreneurial heroes, including one who provides for her family by buying a goat and marketing goat's milk products. However even here the lack of respect for property rights – the celebration of poaching, for example – is to be deplored.
The Wizard of Oz might be a good choice, especially if supplemented by additional readings on the underlying monetary allegory. But unfortunately Baum seems to have been more concerned with the politics of bimetalism than the economics.
In general, it is hard to point to books for budding economists. Perhaps the difficulty stems from the nature of the economics discpline. Innovation and discovery makes for good stories. Mainstream economists take production functions as given, and leave the study of entrepreneurship to their business school colleagues. Personal relationships add drama to any tale. Yet the paradigmatic perfectly competitive market is a place where all agents are price-takers and all goods are homogeneous – power, personality and politics don't matter.
This is unfortunate because, as Deirdre McCloskey has argued, an economy needs ethical soil in which to grow. What she calls the "bourgois virtues" of hope, faith and love, of justice, courage, temperance and prudence, are the basis for flourishing capitalism.
McCloskey's thesis is good news for lovers of children's literature, since there are dozens of children's books that celebrate McCloskey's bourgois virtues: the power of love drives the plot of A Wrinkle in Time; The Golden Compass is a study of courage; Thomas the Tank Engine praises prudence. Harry Potter defeats Voldemort because he has love and courage, things that Voldemort, in his quest for immortality, has forgotten. But are these books for econonomists, or for emergent capitalists?
I don't have time to write more, so please add your suggestions and thoughts in the comments.
Thanks to Nick for suggesting the McCloskey angle.
Worthwhile Canadian Initiative 
@Jacques René Giguère
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I always thought that Frances Woolley was a “Frau Professor Doktor (econ.)”.
Before I forget, for slightly less young audiences (I’d say late teens and above), I’d include much of China Miéville’s novels as well, particularly the New Crobuzon books (e.g. Iron Council).
david: re policy and the powerful. Well, yes, but that doesn’t mean that policy is the best way to have a shot at controlling the powerful under present conditions, cf. here.
Whoops, Ms. Woolley.
Policy is what lever you have. Controlling the powerful is ambitious; aligning their interests with the state is a little easier (it is not accidental that Singapore and Hong Kong pay their civil servants extraordinarily well. Who is the wealthy elite in these states?).
David – Professor or Frances, please.
Must go to put on turkey.
I have to put in a plug for one of my own childhood favorites–Aesop’s Fables. Surely they are rich reading for those preparing for a career in economics (or as a para-economist):
– The Ants and the Grasshopper: an illustration of time preferences
– The North Wind and The Sun: Regulation versus consumer sovereignty
– The Farmer and His Sons: behavioral economics and nudging
And, of course:
– The Old Woman and the Physician: Health economics and information asymmetry
They speak for themselves.
Merry Christmas to the four excellent authors at this blog!
There was no room at the inn for my last comment. Herod the Spam Filter seems to have stopped it.
Shangwen – one of the wise people rescued it 😉
Great suggestions, thanks you. That makes me think of other fables and folk tales, e.g. Brothers Grimm and Hans Christian Andersen. Little Match Girl for poverty and child labour.
Merry Christmas to you, too, – commentators like you are what make this blog.
Don’t forget The Miser, who did not put his wealth to good use. It’s a perfect story for the gold bug claims that the ancient world used gold because it respected savings and preferred accumulators. Yes, gold was in use, but the ancient world compensated for it by heaping opprobrium on creditors and hoarders.
It’s interesting to see the difference in perspective between economists and linguists, with economists being very keen to prescribe correct vs incorrect applications of economics, while linguists have largely abandoned prescriptivism as a mistake and view simply describing language and leaving correct usage up to the users as preferable.
Richard Scarry’s “What Do People Do All Day?” provides an awesome overview of how society works, aimed at small children and illustrated with anthropomorphic animals. The first story, “Everyone is a worker”, includes a capsule description of income, consumption, savings, and investment. “[The farmer] had saved enough money to buy a new tractor. The new tractor will make his farm work easier. With it he will be able to grow more food than he could grow before.”
Amazon has a preview:
Other stories talk about food production (“Where bread comes from”), home construction (“Building a new house”), and forestry (“Wood and how we use it”). The story about road construction (“Building a new road”) includes a brief mention of how it’s funded, namely taxation. Apparently the unabridged edition even includes a section on sewers and water treatment! The only major thing missing from Richard Scarry’s portrait of the world is war.
Russil – great suggestion.
Dr. Seuss – “The Sneetches” – is a classic for discrimination and signalling.
Leo: in matters of daily prescription, linguists behave like the scientists they are. Language teachers OTOH are still confusing ruling class approved with “real language”.
Frances:
“commentators like you are what make this blog.”
Thanks. But without great posters we’d be hard pressed to be great commenters…
“David – Professor or Frances, please.”
Whoops again! I think I’ve been unforgivably rude here. I apologise.
david – no worries. Ideally (and Nick is much better at this than I am) the comments on this blog are like a graduate student seminar. So it’s seminar rules – which are different from the rules of everyday conversation.
Leo: “economists being very keen to prescribe correct vs incorrect applications of economics”
Here again there’s a crucial distinction to be made between economics as a method, as a way of thinking about and understanding the world, and a particular set of economic policy prescriptions, i.e. capital accumulation is a good thing.
I dont’t know about books, but since someone mentioned computer games, there actually is One that clearly stands above others. That game is an Eve Online, a MMORPG that is almost completely based on player interactions in a sandbox environment. Items, guns, ships and almost everything that is actually usable is created/manufactured by players. There are specific carrier paths such as miners, researchers and producers, NPC mission farmers (doing missions for cash and loot) that bring raw material and products to the market for traders to trade. Costs of almost everything is based on the supply/demand (and on location of the station where the trade is about to happen). And location is very important as there are dangers in form of Player-Pirates preying on other players hauling goods across star systems for profit. Players can create corporations and alliances, with their own structure and there is more. The game developers actually employ chief economists – Mr Eyjolfur Guomundsson that studies data of this Game Universe and who presides its economy no unlikely to what a Central Banker work could be. He is concerned in things like inflation (as players can get fixed cash rewards by doing missons – think of helicopter drops) he studies transactions so that the game is balanced.
J.V. Dubois – people must have created games like that or similar for use in teaching Econ 1000, but I don’t know if any.
Monopoly is an interesting game to analyze from a monetary economics perspective. There are continual injections of cash into the system as players pass go, but then this cash is invested in purchases of property. Where it gets interesting is in terms of what is done with fines. In some versions of the game, fines are paid to the bank, so tend to be a deflationary force. In other versions, fines are placed on Free Parking. The possibility of winning the Free Parking lottery makes the game more exciting, but without the reduction in the money supply through fines, no one ends up going bankrupt, and the game can continue – it seems like – indefinitely.
Some of today’s undergrads will have played Roller Coast Tycoon. That game had all sorts of interesting possibilities – e.g. you could sell drinks at a low price and not build any bathrooms, and then open one and charge $20 for admission. The strategy increased profits, but tended to decrease the cleanliness of the park.
Frances: True, even “simple” economies like the one in Monopoly (or baby sitting co-op) can be the source of very surprising insights. As for the Roller Coaster Tycoon and similar games there is one funny comment of friend of mine who thought that every local politician should upload his Sim City save as a proof that she understands at least basic concepts behind the management of a real one 🙂
Frances:
No, I have not read Rev. W. Audrey’s biography but I have seen websites dedicated to his books and which detail his career, such as his testy relationship with his first illustrator which drove him to write “The Flying Kipper” so he could get his way.
There are lots of websites which detail the multitude of “In” jokes in The Railway Series.
When Donald and Douglas, two Scottish freight engines are introduced, Donald is Caledonian Railway 57545 and Douglas is 57646. Douglas says in the story “I hope the Fat Controller doesn’t realize I shouldn’t be here”.
Caledonian Railway 57545 was a real engine of the type illustrated; 57646 is an imaginary literary invention and shouldn’t really be in the story. It’s Audrey giving the reader a wink and a nudge.
I don’t understand why children’s literature should celebrate capitalism. I thought economics, as a science, is free from value judgments as such. Besides, economic systems depend on society’s welfare function, not on the dictates of economists.
With that in mind, I would suggest Asimov’s Foundation series, as has already been suggested.
Cornelius “I don’t understand why children’s literature should celebrate capitalism.”
It shouldn’t. Economics is about a particular way of seeing the world, a way of thinking about human actions and interactions. See, e.g. Chris Auld on Charlie and the Chocolate Factory earlier in the comments.
Books that violate the fundamental laws of economics, just like books that violate the fundamental laws of physics, may be fun to read, but there’s always something slightly awry.
Except that the two are in no way equivalent…
Mandos “Except that the two are in no way equivalent…”
True, noisy explosions in space (impossible: sound does not travel in a vacuum) don’t bother me nearly as much as fictional characters failing to respond to changes in relative prices.
Mandos: Sound does not traval in a vacuum but your spaceship situationnal awareness restitution system will certainly warn you about the danger of incoming explosion debris…
The BIBLE, would be a good place to start. Teithing and Prayers would help !
Jane Jacobs describes the difference between the ethical systems of “traders” and “raiders” in her book “Systems of Survival.” In business, for example, you need to be honest and trustworthy, while in a military conflict, you often need to employ deception.
I suspect that nearly all narratives aimed at children and adolescents will tend to be founded on some kind of conflict, and this will emphasize the “raider” way of thinking. The Lord of the Rings, Harry Potter, and the Hunger Games are all explicitly about war. The protagonists all demonstrate great physical courage, but not the ability to cooperate with potential rivals.
Games seem like a more promising avenue. We’ve been playing Settlers of Catan with our kids (9 and 8), and they like it a lot.
http://www.wired.com/gaming/gamingreviews/magazine/17-04/mf_settlers?currentPage=all
It’s a bit like Monopoly, but it’s much more carefully designed for playability: even when it’s someone else’s turn, you can still collect resources and make trades, instead of having to just wait for your turn again.
And unlike Monopoly, trading is an integral part of the game. There’s five different commodities (grain, wool, wood, etc.). You need all of them, and you typically only have access to three of them, so you always need to trade with the other players. You quickly learn about supply and demand: if grain is scarce, for example, and wool is plentiful, you might expect to have to trade two or three wool resources for one grain resource.
One final thought:
In learning physics, one of the things we need to do is override the naive or folk physics that seems to be hard-wired into our brains. For example, our intuition tells us that a heavy object falls faster than a light object; and has a hard time understanding that a bullet fired horizontally from a gun will hit the ground at exactly the same time as a bullet dropped from your hand.
Similarly, I think that children probably have naive economic principles which are wrong. Our intuition is that income is proportional to hard work (think of the story of the Little Red Hen). It’s not intuitive that labor is a commodity, subject to supply and demand. A garbageman may receive a high wage if there’s not many people who want to collect garbage, while someone who spent years studying to obtain a doctorate in theology may receive a low wage if there’s not many employers who need a theologian. It’s supply and demand, not fairness, which determines wages.
Russil: “Jane Jacobs describes the difference between the ethical systems of “traders” and “raiders” in her book “Systems of Survival.” …I suspect that nearly all narratives aimed at children and adolescents will tend to be founded on some kind of conflict, and this will emphasize the “raider” way of thinking.”
Russil, that’s a very interesting distinction, and a good suggestion for the trading game.
On traders and raiders – TV is where “raider” values are promoted – e.g. the plots of shows like Family Guy routinely involve deception. Books (and perhaps this is my bias in terms of the books I like to read) do seem to be in general more promoting of trader values.
This is the nature of the medium – TV requires a watchable conflict that can be resolved in 30 minutes or less (quick resolution), books let characters plod along for hours or days or weeks or years.