Book Rec: Redeeming Economics by John Mueller

I was an economics major in college. Not that I actually enjoyed it or anything, but I was good at it, so it helped my GPA, and it was a degree that was desirable from the perspective of the industry which held most of my interest for post-graduate employment.

In the years since my graduation, I've become more and more interested in the subject, mostly due to the ability of current events to resurrect questions I always had about economic theory that were never answered. John Mueller's book, Redeeming Economics, went a long way in helping to answer some, though admittedly not all, of those questions.

Mueller is a fellow in Economics and Director of the Economics and Ethics Program at the Ethics and Public Policy Center. He also worked as an economist for Jack Kemp for several years. This gives him at least as much credibility as a lot of the other folks trying to write books about what is right/wrong with our current economic policies and way more credibility than any politician, I think.

His basic point in Redeeming Economics is that the historical evolution of economic theory resulted in a key element (final distribution, or where do things wind up) being ditched as part of economic analysis. He then provides examples of why this has been so catastrophic and how the thinking would change if this element was re-introduced into the thinking on such matters.

This is not for the easily bored or the speed reader. The book is written in as mild a tone as the science will allow. The problem is that the meat and potatoes description of economic interactions really isn't that exciting. You will have to work to get through this book, but you'll be glad you did.

In laying out his argument, Mueller gives a nice overview of the history of economic thought from Aristotle pretty much up to Friedman. This is valuable stuff for no other reason than you don't really hear about it. All you get in economic history is that there was Adam Smith, then Marx, then Keynes. If you make it to someone like Hayek, it's a rare thing. The stroll through history is critical to what Mueller is saying, though, because he has to show the existence of the missing element at some point in time and then demonstrate how it fell by the wayside.

Much of the following chapters are illustrations based on how mainstream economic theories would try to deal with things like gifts or crimes using each theory's own internal logic and then what it looks like when final distribution is injected into the discussion. This includes looking at macroeconomic phenomena like unemployment and growth.

If I may provide an example of my own from real life, consider the amount of health care services in the USA that are provided for free by family members or friends. You might not think it's a lot, but take a look at this:

Baby boomers caring for friends and family have been “the cement” of long-term care in recent years, Feinberg said, adding that their unpaid care was estimated to have been worth the equivalent of $450 billion in 2009, more than the cost of Medicaid and approaching the cost of Medicare.

Pretty big deal. Of course, this looming shortfall of caregivers is a direct result of people having fewer children (if any). Mueller makes this point many times over. Much of our economic decline is connected to the declining birth rate and the rising abortion rate. These factors are, incidentally, dictated in part by the nation's level of religiosity. Mueller's examination of these items is backed up by what looks to be pretty solid evidence in his favor. And I say that as a guy who tends to hate statistics.

If nothing else, the book gives a view of economic matters that is a way different angle than what you are used to hearing. That is valuable by itself. It's not perfect, but any means. He glosses over a couple of things and wraps the book up with a critique of the modern monetary system. There's nothing wrong with that, I guess. There's plenty of room for criticism. I just couldn't see how it fit with his overall theme of how final distribution affects stuff, as it wasn't really mentioned in that whole section.

Even with the minor bumps along the way, I would still recommend it for anyone with an interest in economics or for a historical schooling on why economists think the things they do.