New Ideas from Dead Economists Todd Buchholz - Book Report/Review Example

Essay New Ideas from Dead Economists Todd Buchholz Written by Todd Buchholz, and published by Plume, in the year 2007, New Ideas from Dead Economists, probably stands out as one of the most comprehensive publications in the evaluation of the contributions of the great economists some of which are already dead. Todd does not just reflect on the contributions of these great economists, but goes further to analyze the relevance of the various economic theories and their impacts in the current world. Throughout this book, Todd re-examines the various landmark economic theories of the past decades and discusses how the long-dead, great and prominent economists like Adam Smith and other could have settled issues of economic challenges facing the world today (Buchholz, pp 5-7). Considering the background of the author, it is worth acknowledging that that his knowledge in both American and international economics endows him as the leading authorities on matters of economic aspects affecting the current world. He is an economist and he served in the government of George H.W Bush as the White House director of economic policy. He also served as managing director of the Tiger Hedge Fund under the same regime. Moreover, he received awards such as the Allyn Young teaching prize by the University of Harvard (Buchholz, pp 8-10). Therefore, Todd tries to apply his knowledge to correlate the relevant aspects of the historic economists points of view regarding the economic circumstances to the current prevailing economic behavior. In critics, he interrogates the relevance of the applications of the historic economic theories as put forth by the great dead economists to the current economic world (Buchholz, pp 88-92) . In chapter one, Todd highlights the pressure of accusations of varied nature that various economists receive from the corporate executives, the politicians and the altruist. The corporate executives accuse them of failure to determine costs and benefits with precision, the politicians view them as stumbling blocks as they can no longer promise without sacrifice, while the altruists blame them of being too decorative about costs and benefits. He protects the reputation of economists by branding them messengers and not makers of bad news as portrait by this group of individuals (Buchholz, pp 134-142). The author elucidate Smiths background and more profoundly within the chapter two. He gives comparative advantage trade model which has formed the modern international trade platform. In chapter three, Todd critically evaluates the background and the contributions of Malthus as a free trader. He cites instances where Malthus arguments were acceptable and also, where such arguments can never be accepted as they portrayed missing links in terms of data. Interestingly, he relieves Malthus off the hook of being viewed as the hater of the poor. Some trade policies and perceptions of Malthus are null and void following the current economic revelations (Buchholz, pp 172-179). In the fourth chapter, he analyses Ricardo and cry for free trade. Ricardo formulated principles of political economy and taxation, and reportedly agreed with Malthuss population principle. Ricardos complex principles and his various views on trade found and still find their ways in the modern economics. It is regrettable that few politicians then and now follow his analysis hence the existence of trade barriers in the international economics. In chapter five, he focuses on the stormy mindset of John Stuart Mill, a renowned economist whose views reveal the philosophical disagreements within classical economics. However, he dismisses Mill on the views that laws on production may not be fixed and that distribution cannot be separates from production distinctively (Buchholz, pp 222-226). Chapter seven expounds on the concept of the elastic economy by Marshall, an economic demand tool that every modern government must consider in its international trade dealings. In chapter thirteen, Todd reflects conclusively of the tendency of the world markets going the Smiths way following his ingenious invisible hand concepts in the economy. This has been witnessed as both communist and capitalist countries have resorted to the market mechanisms as competition within the international marketplace becomes stiffer (Buchholz, pp 232). Essay 2: Understanding Capitalism: Competition, Command, and Change Written by Samuel Bowles, Richards Edwards, and Frank Roosevelt, and published by Oxford University in the year 2005, Understanding Capitalism: Competition, Command, and Change tries to provide an extensive attention to the exercise of power and the evolution of the economic institutions. It is worth acknowledging that the authors of this book have had verse knowledge in the field of economics and have received various awards as they continue to pursue further knowledge in enhancing micro-macroeconomics as a course in the world recognized universities (Bowles, Samuel, Richard Edwards, and Frank Roosevelt, pp1-3). Chapters 1-7 focusses on the political economy. They begin with an introductory chapter focusing on capitalism as a powerful channel for change that that has changed the manners in which the world conducts its business. They reveal an introductory aspect of the recent efforts to unearth the nature of the interaction of humans and the significant role that norms, fairness and reciprocity play in our lives in chapter 2. In chapter 3, the authors designs a broader framework of the political economy with regards to the three dimensions in regard to competition, command and corresponding alteration. This chapter gives a framework upon which the authors evaluate the economic system based on fairness, efficiency and democracy (Bowles, Samuel, Richard Edwards, and Frank Roosevelt, pp7-11). Notably, they encourage the learners to view economics system as a creation of human beings, subject to the judgment of human beings and thus, it is possible that the same economic system can be changes by human beings. In chapter 4, the authors have a reflection on the various perspectives of the historical economists such as Adam Smith, Marx, and Keyes among others as their views form the backbone of political economy (Bowles, Richard & Frank pp12). Chapter 5 evaluates the surplus concept and how it relates to the economic behavior of the international trade. Chapter 6 critically analyses the class concept in political economics. Chapter 7 has insights into the principle of accumulation, the structure of the various economic classes and the historical background of the US development. Moreover, a series of the social structures of accumulation is also envisaged in this chapter (Bowles, Richard & Frank, pp18-19). Chapters 8-13 are all about microeconomics. Chapter 8 reflects on how the forces of demand and supply can be interpreted with regards to the workings of the markets. The forces of demand and supply commonly referred to as the market mechanisms are the key determinants of the prevailing market prices today. Chapter 9 puts into consideration on the techniques of allocation of resources and the coordination of the activities of trade. It evaluates the hurdles that face the market in relation to the commands. Throughout parts of chapters 10-13, the authors focuses on the nature of conflict that comes about as a result of the collision among the ideals of capitalists, and that of the capitalists and the workers fraternity (Bowles, Richard & Frank, pp37-43). Chapter 10 investigates into detail the profitability determinants with regards to the work intensity and the utilization of capacity. Consequently, a buildup of an algebraic expression is realizable laying the backbone for the determination of the diverse means pertaining the underlying interests of employers’ conflict those of the workers. Chapter 11, the authors evaluations reveal that it is competition that results in the accumulation of capital in large firms. Chapter 12 reveals that the capitalists have a problem in the extraction of labor from the workers. They further cite that the solution to this problem in the US is the occurrence of income loss that result from workers being laid off. However, they present the official model for labor extraction. Chapter 13 revisits the conflict that exists between the capitalists and the workers within the workings of the firms. It presents the approaches by which the firms can apply to have control of the pace and conditions of work in addition to the setting the wage standards (Bowles, Richard &Frank, pp129-132). Chapters 14-19 of this book correlate to macroeconomic concepts. In chapter 14, the authors focus on the analysis of the mosaic of inequality and its determinant factors in the US. Furthermore, the chapter discusses the connectivity between capitalism, and racial and sexual discrimination. Chapter 15 focuses on the following aspects of international economy; the distribution of income of global nations, the definition and the causes of economic growth and the relationship that subsists between economic growth and the distribution of income. Chapter 16 revisits the concept of employment and unemployment, but rather from the macroeconomic point of view. In this chapter, the authors re-evaluate the macroeconomics concepts such as aggregate demand and supply in an economy. The concept of the multiplier, monetary and fiscal policies, and the business cycle These concepts are fundamental in the forces behind international trade. In chapter 17, the authors apply their concepts in chapter 16 as a foundation of determining the question as to whether full employment is achievable in the capitalist economy. Even though capitalist economies such as Sweden have almost achieved full employment, the authors interrogate the reasons of lack of accomplishment of US in regard to full employment. They approach this by evaluating the interaction of the microeconomic analysis of the firm with that of the macroeconomic analysis of aggregate demand that tends to produce the stumbling blocks to achieving full employment in the US that practices a capitalist economic system. The analysis of the US failure to achieve full employment is crucial in the discovery of way forward in the achievement of the very crucial aspect of economic demands that portrays efficiency and effectiveness of a large economic system as that of US (Bowles, Richard & Frank, pp156-159). Chapter 8 concentrates on inflation. It defines the relationship and the distinctive difference between cyclical and structural inflation in addition to the stand-offs that subsist between unemployment and inflation. Even at zero levels of unemployment, some amounts of inflation is unavoidable. Thus, an economy cannot operate without experiencing some elements of inflation regardless of the level of unemployment. Chapter 19 depicts the relationship between the government and the capitalists. It presents the ways in which wealth can be employed to earn the political power. It also presents the manner in which the wealth of a nation can be used to influence the decisions of the government and the various extent to which the decisions of the government affect the profitability in an economy and so does the accumulation of wealth. In chapter 20, the authors conclude by considering the future of capitalism in relation to the growth limits and the encroaching pressures posed by the natural environmental degradation and the emergence of an economy based on information (Bowles, Richard & Frank, pp235). In conclusion, the reviews of these two books reveal the relevance and the irrelevance of the theories as proposed by the historic great economists to the current economic world. Again, the concepts outlined in the Understanding Capitalism: Competition, Command, and Change, clearly illustrates the gaps and the challenges that capitalist countries still face to date (Bowles, , Richard & Frank, pp246). From the analyses, the possible solutions are explored and the critical complex aspects proposed for consumption by the governments. The authors have clearly shown how capitalism functions and the reasons for its failure to function sometimes as one would wish. Works Cited Bowles, Samuel, Richard Edwards, and Frank Roosevelt. Understanding Capitalism: Competition, Command, and Change. New York: Oxford University Press, 2005. Print. Buchholz, Todd G. New Ideas from Dead Economists: An Introduction to Modern Economic Thought. New York: Plume, 2007. Print. Read More