Posted by: N.S. Palmer | October 22, 2008

Drooling Over Exorbitantly-Priced Books

By N.S. Palmer, Ph.D.

Time for one of life’s little pleasures: drooling over things that I can’t afford.

For most women, it’s shoes. For most guys, it’s gadgets or sports gear. For me, it’s books. The weirder and more arcane, the better.

Today’s mail brought the latest Edward Elgar book catalog. Elgar publishes some terrific books, but they all cost a million dollars, give or take a few hundred thousand. That makes them outstanding drool-bait.

Tonight’s “Wishful Thinking Award” might go to The Economics of Hate ($100), a book by Samuel Cameron at the University of Bradford in the United Kingdom.

Most books about the economics of hate or racism have the same theme: It’s unprofitable to discriminate against any group of people for arbitrary reasons. For example, if you hire less-qualified whites instead of more-qualified blacks because you hate black people, then you end up losing money because the black employees will do a better job for your competitor across the street. Therefore, over time, the miraculous workings of the market will eliminate hate, racism, etc. and we’ll all live happily ever after, singing “We Shall Overcome” in a lovey-dovey multi-racial utopia. Good luck with that. It’s a nice dream.

What makes me think the Cameron book might be better than the others is that the description sounds at least halfway sensible: it “looks at emotions as a form of personal capital and at hate as a form of ‘negative social capital’.” It’s also endorsed by Tyler Cowen, a very sharp economist I used to know.

I’m not sure what the most expensive book in the catalog is. The most expensive one I found is The Elgar Companion to Neo-Schumpeterian Economics, which clocks in at $495. Joseph Schumpeter was an economist who thought that innovation was a key cause of the business cycle, and like most economists with theories, he had his data and he had his arguments.

The only book of Schumpeter’s that I ever read (the others being too expensive) was Capitalism, Socialism, and Democracy, a paperback in which he opined that free-market capitalism made people fat, dumb, and happy, which in turn made them think that socialism was a good idea, which in turn led democracies to go socialist. When I read it as an undergraduate student, I was still under the impression that the free market was the solution to all human problems and that socialism was a totally bad thing. Live and learn, I guess. Schumpeter’s dead. I’m not sure what he would think about the economic follies of September and October 2008. He’d probably say that for once, his business-cycle theory was obviously correct: it was all those financial innovations, mortgage-backed securities and such, that did us in.

Capitalism and socialism have various definitions, by the way. In essence, capitalism means that everyone is on his or her own and the rich get to do whatever they want. In essence, socialism means that the government tries to help people who are down on their luck. How it helps them, how it chooses whom to help, how intrusive it gets in regulating business, those are all details that vary depending on the particular socialist who’s doing the talking. Whenever either capitalism or socialism is implemented in the real world, the result is a dog’s breakfast, a real mess, monumentally screwed up, because that’s just how things usually play out in the real world.

The Elgar catalog also lists several books about the Austrian school of economics. Austrian economics is a well-meaning thing, kind of a cult for people with high IQs, secure incomes, and plenty of time on their hands, but who don’t like mathematics enough to do mainstream economics. It contends that economics should be like Euclidean geometry, with absolute truths* deduced flawlessly from indisputable premises. It’s reminiscent of Ayn Rand’s belief that you could deduce all of morality, politics, and economics from the statement that “A is A.” The Austrians disavow any use of empirical evidence in economics, which means that they never need to look at the world to find out if their theories are true. It must give them a nice feeling of intellectual security.

Elgar’s book The Austrian School ($95) by Jesus Huerta de Soto, at the Universidad Rey Juan Carlos in Spain, tries to give an overview. It’s endorsed by Israel Kirzner, another economist I used to know, a very nice fellow who teaches at NYU instead of Harvard, which means that his university is slightly less prestigious but he can get better rugalach and babka than they have in Cambridge. It probably also keeps him from arguing too much with the aforementioned Tyler Cowen, who used to be an Austrian (like yours truly) but decided that maybe it isn’t such a bad idea to look out the window once in a while and see how the world is doing.

* Of course, since Riemann and Lobachevsky, even Euclidean geometry isn’t considered absolute truth anymore, Kant’s opinions notwithstanding. Axiomatic systems of “absolute truth” are always vulnerable to (a) problems with their axioms, (b) slips or ambiguities in their chains of reasoning, and (c) omissions of facts later discovered to be relevant — the “Oops, we didn’t think of that” factor.

Copyright 2008 by N.S. Palmer. May be reproduced as long as credit and URL ( are included.

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