Book review: From Here to Economy

I enjoyed Todd Buchholtz's book New Ideas from Dead Economists (which I reviewed here a couple of years ago), so I was looking forward to reading his 1995 book From Here to Economy. The subtitle promises that it is "a shortcut to economic literacy", and it mostly delivers. However, the problem with books based on a collection of contemporary economic and policy issues is that they don't necessarily age well. And sadly, that is the case for this book. The underlying economics is fine, but a reader in the 2020s is not necessarily going to get as much out of the examples as a reader in the 1990s would have.

That said, Buchholtz is clearly a fan of small government, and the book presents that as a position that most economists agree with (which it isn't, and wasn't even in the 1990s). This shines through in his selections at the end of the book of the five greatest economists of all time. Buchholtz nominates Adam Smith, David Ricardo, Alfred Marshall, John Maynard Keynes, and Milton Friedman. I have no argument with the first four, but Friedman would be way down my list, behind at least Paul Samuelson, Arthur Pigou, Gary Becker, Ronald Coase, and Kenneth Arrow (not necessarily in that order).

The other thing that marks an older book is the predictions it makes. Buchholtz does fairly well on this score. He is skeptical that there would be agreement on adopting the Euro until the 21st Century (the Euro was adopted in 1999), and he predicts Nobel Prizes for Amartya Sen (who won in 1998) and (who won in 1995, as the book was being finalised). His third predicted Nobel winner, Martin Feldstein, never won but probably deserved to.

Putting aside its datedness, the book is a lot of fun. Buchholtz can be hilarious, as these excerpts show:

If virgin wool sweaters go out of style because they itch too much, their prices would fall, so that both manufacturers and sheep get the message: stop making so much.

Perhaps sheep are utility maximisers? And on the Efficient Markets Hypothesis:

You would probably do just as well choosing a stock by throwing a stockbroker at a dartboard as listening to his advice - and you would save money.

And on the safety of mutual funds:

The word mutual certainly does not by itself mean that the fund is especially safe. Think of the Titanic as a mutual vacation.

Having started by explaining some basic macroeconomics and microeconomics, the book then moves to personal finance, which is a different approach to that taken in most pop economics books. And the end of the book is devoted to economic history, which recalls Buchholtz's earlier book. The personal finance section remains useful, although the examples are obviously dated. The economic history is, as I noted in my review of New Ideas from Dead Economists, very welcome.

Overall, I enjoyed the book, but for current readers, there are others that I would recommend before it. This is not because of the quality of the writing and explanations, but only that the datedness of the examples limits their usefulness.