"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 
Autarchism and autarkism are different things, as a note. Feel free to delete this comment when you’ve fixed the spelling (if it is indeed an error).
This is the kind of preoccupations that polarises politics…
JL – “This is the kind of preoccupations that polarises politics…”
I guess you aren’t the kind of person who reads Harry Potter and ponders the implied relative price ratios, e.g. 1000 galleons is enough capital to start a small business (Tri-Wizard Cup Winnings, given to Fred and George Weasley, to found their company), v. 10 galleons for a pair of omnioculars. See also: http://www.fan-groups.com/post/5163/Definate_prices_for_magical_items?.html.
As for books: Asimov’s Foundation encourages the ambition of a social scientist but, perhaps, too much; it is (by virtue of plot device) contemptuous of individual ability to alter the aggregate:
If there is a story which crystallizes a celebration of social analysis, Foundation is probably it.
Atlas Shrugged swings toward the opposite extreme in terms of this attitude, with society dependent on a handful of individuals. AS perhaps functions best as reminder that the revenue curve does eventually slope downward; in terms of characterization, property rights, or economic concept, it is as cavalier as a lot of fiction out there. I think Heinlein’s libertarian phase would be better but for some reason it is rarely cited as inspirational, whereas AS is; Heinlein is more anti-government than pro-capitalist, to be sure.
The Life and Times of Scrooge McDuck is probably the only comic-book that celebrates a capitalist in a human fashion. The economics is not the core of it, though.
For budding economics in general, perhaps one of those city-building or civilization-building PC games would be a better choice.
Eliezer Yudkowsky noted that the fixed metal ratios in Harry Potter should be subject to arbitrage in his HP fanfic. I’m not sure if it was noted previously elsewhere.
JL – I’ve updated the post to point out what any Harry Potter fan knows already, i.e. that Dumbledore is a strong advocate of bourgois virtues.
On reflection, encouraging capitalism as an ideology (accepting that incentivized capital accumulation is necessary for human material welfare) is one thing, encouraging becoming a capitalist is another, and encouraging an attitude that all of this can be subject to analysis is a third. For the first, PC games rather than fiction, I think. For the last, Isaac Asimov.
No-one can understand Jurassic Park (the book) and not question socialism. The key theme is the limitations of our ability to manipulate complex systems. If there’s a book to act as a prolegomena to Hayek’s The Fatal Conceit, it’s Jurassic Park.
Films: Local Hero can be used to explain economic theory (e.g. one can explain the relative attitudes towards money of Burt Lancaster’s star-obsessed philanthropist and the avaricious Scottish fishermen using marginal utility analysis; the attitudes towards Trudy the Rabbit are an example of the subjectivity of value between those of us who think of rabbits as easily shot food and those who think of rabbits as pets) while also illustrating “bougeosis” virtues. It has the added benefit of being utterly hilarious.
As for computer games, Sim City 3000 and the indie game Democracy 2 are a good guide to unintended consequences in economic policy; the benefits of government providing a basic environment for enterprise and then staying away; and a lot of public choice theory, especially in Democracy 2 where the best policy and re-election are usually incompatible.
Sim City 3000? A 1999 game? You’re showing your age, W. Peden 😉 Tropico 4 for a 2011 equivalent, perhaps.
Jurassic Park has the flaw that the limitations occur in an environmental of corporate greed and selfishness whilst the heroic escape and re-assertion of control over the park is carried out through individual self-sacrifice and academic intellect; unless you start reading it with Hayek in mind, you are likely to leave with quite a different moral.
And even in the case of an economic lesson, one is more likely to leave more partial to Paul Ormerod or J. Barkley Rosser rather than Hayek; there is a whole tradition of chaos theory and economics that completely discards the Austrian approach.
I’d suggest The Gulag Archipelago, but more for a teenager than a kid.
Though if fiction is a requirement, then One Day in the Life of Ivan Denisovich would work better.
David,
I haven’t had much time in the past 12 years for computer games: I’ve been reading too much economics! (And even sometimes the subjects I’m supposed to be studying.)
I didn’t really notice the whole corporate greed aspect, but that’s because (a) I saw the film first and (b) by the time I read the book I was already familiar with Michael Crichton’s general contrarianness and therefore disinclined to look for simple messages.
David : “On reflection, encouraging capitalism as an ideology (accepting that incentivized capital accumulation is necessary for human material welfare) is one thing, encouraging becoming a capitalist is another, and encouraging an attitude that all of this can be subject to analysis is a third.”
That was part of what I was meaning, but I would add that there is also a need to have contact with other values (I.E. not just bourgeois values). Closed networks = closed minds and vice versa. I say let them see the big bad capitalist, but let them see the value of hard work incentives and the nonsense behind “free lunches” … but we don’t need more “job creators are demi-gods” attitudes…
Frances: “I guess you aren’t the kind of person who reads Harry Potter and ponders the implied relative price ratios”
I am the kind of person who wishes they knew enough to do that 😉
W. Peden: “the attitudes towards Trudy the Rabbit are an example of the subjectivity of value”
Brilliant.
After reading this post and comments, I checked, and to my surprise, the foundation series is available on kindle! I guess I know what I’m rereading over the holidays…
Who says a budding economist has to be a free marketeer? Aren’t those books great for a wee leftie?
Thomas the Tank Engine has a good bit of allegory in the second quarter of the series. “Troublesome Engines” parodies the strike-prone nature of British Railways in the 1950’s. Rev. W. Audrey was a thorough railfan and he always wanted a firm, realistic inspiration for his stories and his engines (minus the faces).
The famous story “Henry and the Flying Kipper” came about when Audrey could not agree with his illustrator over the latter’s image of Henry. Audrey was very specific on his engines, usually basing them on models from his own model railway or on famous British locomotive classes. Henry originally was just an illustrator’s flight of fancy, much to Audrey’s annoyance. So Audrey wrote a story where Henry was wrecked and reconstructed into a London, Midland & Scottish “Black 5” 5MT.
By chance it became one of the most popular stories in the series.
Though the beginning of the “The Flying Kipper” has a great narrative on the role and imperative of international trade. The whole Railway Series is a paen to technological change and the economic disturbances that result from that.
It’s also a lesson in the Internet. When I was listing to the stories before bed in Grade 1 there was a form in the back of the books where you could order a map of the Island of Sodor (for money). My family never spent that money. That map is now available for free on the internet, just when my niece will start to take an interest in the books.
Determinant: “”Troublesome Engines” parodies the strike-prone nature of British Railways in the 1950’s.”
Quoting from memory::
“He says I have black wheels, but I don’t, do I?”
“No, Thomas,” said the Fat Controller, “Your wheels are just fine.”
“Black wheel” being a reference to a “black leg” or a striker-breaker.
Regarding the economics of Harry Potter: Harry Potter and the Methods of Rationality: The Efficient Markets Hypothesis. The whole thing is pretty good.
Suggested book: Charlie and the Chocolate Factory. Discusses income distribution and the effect of income on health (Charlie and his family contrasted with the other kids), asymmetric information in industrial organization (Wonka’s secrecy and its motives), many examples of unintended consequences (the misadventures of the kids other than Charlie), the economics of bundled products (chocolate plus lottery ticket sells much more than chocolate alone), and the economics of slavery, unfortunately in a rather pro-slavery version (the Oompa Loompas).
That book features the a full-blown strike or occupation with “Deputation” too by Gordon, Henry and James.
Chris Auld – Charlie and the Chocolate Factory.
if there was a golden ticket for best suggestion, you would win it. You are so totally, absolutely and completely right.
Unfortunately you neglect to mention Dahl’s insightful analysis of women’s labour force participation, and the difficulties of balancing paid and unpaid work (Charlie’s mother).
Also, as a health economist, what James and the Giant Peach – the bit about the parents being gobbled up by a rhinoceros. Their troubles were over and done with in five second flat, but James was very much alive, and alone in a bit and unfriendly world. What is it that we should really fear?
Carnivorous herbivores, apparentely.
There’s an interesting and I think relevant backstory to Raold Dahl and kiddy litter. He was originally writing macabre adult stories that didn’t bring in much money. Then his wife (a successful film actress) got seriously ill, and then his young son got hit by a car. Both needed very expensive care, and they lost his wife’s income. So in desperation he turned to writing children’s books to earn money.
Do children really react to Charlie and the Chocolate Factory by contemplating those ideas?
Paul Krugman: “I got into economics because I wanted to be Hari Seldon.”
Krugman again: “Charles Stross’s Merchant Princes novels, on the other hand, are economic science fiction worth reading.”
Also see http://www.technovelgy.com/ct/Science-Fiction-News.asp?NewsNum=1925
and
http://krugman.blogs.nytimes.com/2010/08/30/who-are-you-calling-dense/
Nick Rowe: Roald Dahl “was originally writing macabre adult stories that didn’t bring in much money.”
I find that surprising. My favorite episodes of Alfred Hitchcock Presents were written by Roald Dahl. To my mind he ranks with Bradbury, Chesterton, and Lafferty.
I don’t know about books. (Next post, though. :)) I would encourage any interest in biology, which many kids have, and in strategic n-person games.
Min: It was in his autobiography (Flying Solo?) where I think I remember him saying he switched to concentrating on children’s literature to bring in money. But I can’t find the book now, and my memory may be off.
There is some interesting economics in The Bible. Genesis has counter-cyclical gov’t policy and debt servitude. There is also debt forgiveness. The New Testament has the parable of the talents, “render unto Caesar”, early church communism, and more.
I am somewhat surprised that no one has mentioned Dickens. He was a keen observer of society and a critic of the economics of that time. The 19th century saw the emergence and development of many social, political, and economic themes of our times, among them free markets, democracy, the modern corporation, the labor movement, gov’t welfare. Dickens was at ground zero.
He was also the English Language’s first commerical author in that he was a middle-class man doing it for a living. He had to support his large family. Previous authors were scholars, churchmen or minor nobility who wrote for a hobby. Actors/Theatre proprietors like Shakespeare were they only people who made a living in the literary arts.
He broke ground on copyright and royalties.
I’d also watch as many WWI movies as I could. Even after a century, macro can still be thought of as an attempt to explain why the economies of 1925 were not and could not return to the “golden age” of 1913. To understand the present it is crucial to understand on both a factual and emotional level the turmoil we went through in 1914-1918 and the bitter disappointment of interwar economic results.
Remember the suitable for children criterion – this may or may not eliminate Dickens, Ayn Rand, the Bible and the Foundation trilogy?
Min: the question in my mind about Dickens is whether, from our vantage point, the Christmas Carol reads as a critique of the capitalist system, with its vivid portrayal of working class poverty, or a blueprint for sustainable capitalism, with its emphasis on the power of private charity, and harms that can be caused from excessive savings. Put another way – it was radical then, is it radical now, or conservative?
Radical? Conservative? These days I have a hard time distinguishing…
Determinant: I too find the choice of what is considered good for a budding economist and bad for a budding economist to be very interesting. The Luddite uprising of the Shire reflects a particular moral and political perspective. So young economists must abjure said perspective?
In other words, are economists the enemies or counterparts of Luddites? (In the original sense of Luddite, of course.)
Sustainable Capitalism based on private charity? I’ve always thought that was a red herring argument and a nirvana fallacy.
In the limit a charity donation from everyone is the same as a tax; the difference reduced to a sham and the pretense of “voluntarism” becomes contrived.
If one does use one’s power to abstain from donating you are either being remiss in your duties, shortchanging others or simply exercising your right to control your money. There is no perfect solution here.
Simply because the “government” is involved does not make it bad, the right’s continual attempt to argue this is the greatest logical fallacy of our times. The right has so demonized the word “government” that is had become an “If-by-Whisky” fallacy.
“In the limit a charity donation from everyone is the same as a tax”
That was the worst part of a generally unseasonal comment.
“Simply because the “government” is involved does not make it bad, the right’s continual attempt to argue this is the greatest logical fallacy of our times”
No, I think that the present of that title still goes to the Strawman.
Mandos “The Luddite uprising of the Shire reflects a particular moral and political perspective. So young economists must abjure said perspective?”
Honestly, the scouring of the Shire is just about my favourite part of the entire Lord of the Rings trilogy. The thing that I find most annoying about the novels is the lack of realism when it comes to the amount of gear required for months of camping out. I mean, did Tolkien ever do any serious wilderness camping? Did he have any idea how much stuff weighs? Especially water.
Back to what David said:
“On reflection, encouraging capitalism as an ideology (accepting that incentivized capital accumulation is necessary for human material welfare) is one thing, encouraging becoming a capitalist is another, and encouraging an attitude that all of this can be subject to analysis is a third. ”
Tolkien clearly rejects the first, and probably the second and third as well actually.
But if you think that McCloskey is right, and bourgeois virtues are the ethical soil in which capitalism grows, then there might be something worth salvaging in Tolkien after all – there’s lots of love, faith, hope, courage etc there.
Determinant, you must have read The Railway Man?
Now I’m off to make cinnamon buns for Christmas morning.
Can’t say I have.
At risk of being flamed, I don’t care much for the Scouring of the Shire or Tom Bombadil.
I rather more like the Gondor bits.
I took an Engineering degree so I’m not a Luddite. One of my first-year history electives even taught me what that is!
Determinant, sorry, it’s called The Thomas The Tank Engine Man. Biography of Awdry.
A few years ago, my then 8-year old nephew asked my brother why Tom Bombadil didn’t get invisible when he put on THE Ring. ( Because he is so pure of heart that has no conception of greed and evil, which why he won’t fight Sauron.)
What example does he give to budding capitalist?
Back to the living room where nieces and nephews are forgiving old uncles for their boring political discussions as long as they bring another round of gifts…
A lot of stuff by Kurt Vonnegut is great – especially the stories within stories told by Kilgore Trout (a recurring character in Vonnegut’s books). I always thought those stories contained some pretty cool thought experiments.
Here’s one of my favorites – I think budding and established economists will enjoy the tale:
http://graphics.tudelft.nl/~bart/leesvoer/asleep.html
For older kids, ‘Grapes of Wrath’ and ‘A house for Mr. Biswas’ provide an emotional connection to the great depression and long-run economic growth respectively.
Season’s greetings, all.
McCloskey:
I think McCloskey is wrong, and that it is not in fact necessary nor sufficient for societies to raise the status of the bourgeoisie in order for a political economy favorable to economic growth to flourish. The non-Japanese high-performing Asian economies regard the bourgeoisie pretty badly, even today: the student revolutionary and the autocratic technocrat hold particularly dear places in these countries because of their peculiar postwar histories; unlike the West in general, these groups have at times achieved landscape-altering political power and today these countries are liberal and rich, so they get the credit respectively. Japan is a little different, but the “sararīman” there is openly pejorative regardless.
Conversely a society that grants the bourgeoisie too much status can end badly, particularly when the relevant bourgeoisie are numerous small capital- or land-owners who have an incentive to oppose, rather than support, substitutive industrialization, financialization, or increased specialization. Societies already dominated politically by a united front of the petite-bourgeoisie, so to speak. Sometimes the existing middle-class can have no material interest in further structural change; this probably only happens in the instances national identity and geographical zones of economic development conflict, but it happens. See post-independence India to see how well this works out over the long-run, with small businesses continually agitating against trade liberalization ever since Gandhi tied it to anti-colonialism. See Thailand for a more recent example of political dysfunction.
With all that said, I don’t think books that encourage respecting capitalists and books that encourage analyzing capitalists tend to go well together. Status is a zero-sum game and status to being an economist comes at the expense of the object of study.
David, ” We need to get beyond the project of damning a man of business because he is neither an exalted aristocrat nor an unassuming peasant-proletarian. ”
o.k., well that just about does Tolkien in 😉
Great comments, and thank you for addressing the substance of McCloskey’s ideas. If you look at the post-Soviet countries, though, you can see McCloskey’s point – the ones that were able to build on some minimal amount of private ownership, i.e. Poland, have done better than the ones where state assets passed directly into the hands of a kleptocracy.
“A lot of stuff by Kurt Vonnegut is great”
Vonnegut wrote Player Piano which is the inspiration for one of my all-stime favourite Nick Rowe blog posts (of Horses and Men).
The competitors to McCloskey’s hypothesis, like the North/etc. neoclassical institutionalists, are also able to account for the post-Soviet experience, though. Indeed those would be closer to your own statement of it. McCloskey’s would run along identifying some difference in Polish vs. Ukrainian culture and status assignments, with the Polish existence of a property-owning tradition being the intermediary rather than the cause.
Unrelatedly.
re: Of Horses and Men; the point was rather elegantly made out by Gregory Clark’s A Farewell to Alms:
david: “wages so low”: so are a lot of peole in the 3rd world. Contrary to Chinese propaganda films of the 50’s (those by Joris Ivens were so beautiful…and stupid)we don’t build dams with peasants hauling baskets of earth.As a poor society, if we do that we’ll die of starvation ( hello Great Leap Forward) and there is the value of time.
The cartoon portrays a future economist. Shouldn’t it says future business girrrl?
But there are good reasons at least sometimes to oppose these things. As Ha-Joon Chang’s Bad Samaritans points out devastatingly again and again, trade liberalization can very well be a tool of colonialism.
Again this is all being discussed under the premise that a budding economist should be a budding supporter of capitalism…
Mandos: “this is all being discussed under the premise that a budding economist should be a budding supporter of capitalism…”
Yes and no. The reason I talked about McCloskey is that I really didn’t want to assume that premise, but I realize that’s not 100% obvious from reading the post. Indeed, the challenge of finding books for budding economists does raise questions about the relevance and realism of economic thought.
Actually, I should have included cracked.com as recommended readings (not quite a book, but almost counts) because they have some great articles on poverty and behavioural economics.
Gandhi did oppose trade liberalization, but he also opposed industrialization and specialization – he did not just want the British to stop exporting factory-made cloth to India. He wanted Indians to continue weaving cloth by hand, too. You can make a case against a given proposal for marginal trade liberalization on the Rodrik-esque grounds that the losers are quite likely to be uncompensated by the winners* and so on, but opposing domestic industrialization would be quite beyond Ha-Joon Chang.
There are powerful institutional factors, I think, that explain why India has a curiously anemic industrial sector compared to its developing peers, and why the service sector has ended up leading its current burst of growth instead.
On the note of trade liberalization. Can you imagine 60s India aggressively encouraging its former colonial master back to conduct foreign investment? Yet that is exactly what South Korea did with Japan and when people rioted, Park had soldiers shoot the rioters. It’s not foreign imperialism but nobody said pursuing industrial policy is nice.
* note that the HPAEs did not compensate their domestic losers either, despite aggressive industrial policy** during their periods of highest growth. With the exception of HK and (mostly) Japan, considerable violence was employed to keep things this way. Policy is uniformly a tool of the powerful, domestic or foriegn; I think the trick to engineering capitalism is to align the interests of the existing domestic wealthy powerful with capital accumulation and the continued existence of the regime under which this takes place.
** Yes, this includes Singapore and Hong Kong. Industrial policy goes beyond tariffs, which hurt the rich in entrepôt cities – engineering housing and education policy toward overtly industrial ends replaces this instead. Singapore did the nationalization/wage-setting thing for about two decades, too.
Mr. Woolley, budding economists are not yet economists! I think you are overestimating the degree to which non-economists are inclined to consider social phenomena from a neoclassical, Freakeconomics-esque perspective. Raising the status of social analysis is more effective than merely mentioning social phenomena which can be analyzed from a neoclassical POV (and a literary one, or an ethical one, or a political one, etc.).