Shelf Life

Looking back to the beginning of economics

Kai Ryssdal Sep 15, 2011
Shelf Life

Looking back to the beginning of economics

Kai Ryssdal Sep 15, 2011

Kai Ryssdal: You don’t have to get too far past the name of this radio program to know that we talk economics a lot. To do that, we obviously need economists.

There’s no shortage of that particular resource. But it’s not like economists — or their discipline — have actually been around all that long. Sylvia Nasar has a new book out about the history of economics; it’s called “Grand Pursuit.” It’s a pursuit, she writes, that starts on the streets of London, circa 1840 or so.

Welcome to the program.

Sylvia Nasar: It’s great to be here.

Ryssdal: I am intrigued by this premise that you start with, that economics was — is, I guess — an idea that was basically discovered, right? How did that happen? Was there a moment — was there a Eureka moment?

Nasar: My thought was that it started with an act of imagination, which is why I start with Dickens.

Ryssdal: The Dickens?

Nasar: Charles Dickens, yes. Charles Dickens was a great journalist, and interested in everything, including questions of economics and particularly the question whether the living standards, the material circumstances of the bottom 90 percent could improve.

Ryssdal: Describe those lives for us. And I’m going to say it again, the bottom 90 percent. How did people live who weren’t of the landed and gentry class?

Nasar: The average Englishman who, of course, was a citizen of the then-richest country in the world, lived really no better than a Roman slave.

Ryssdal: You know, that plays out, actually, in some of the early people that you talk about: Alfred Marshall in England, Marx and Engels as well.

Nasar: That’s right.

Ryssdal: Also one of the women — one of the few women, actually, in this book and in the history of economics — Beatrice Webb; they were all driven by the idea of poverty and how to change it.

Nasar: Right. People were appalled by the suffering and limitations of lives that really were not that much better than the lives of livestock. But nobody questioned that this was the way things were. And the Industrial Revolution and the discovery that humanity in the world was evolving in some sense, gave rise to the idea that scientific explanations might lead to actual changes.

Ryssdal: I suppose you can’t really talk the history of economics and economists without talking about John Maynard Keynes, right?

Nasar: Mmm.

Ryssdal: He is, of the moment — has been for a couple of years now — both praised and criticized a lot for his ideas of stimulus spending.

Nasar: He is often castigated, but it wasn’t that he didn’t understand the long run — it’s that he refused to take the attitude that the short run didn’t matter. And why? Because he saw in the aftermath of World War I, which destroyed the prosperous globalized economy that had developed before World War I, and he saw that democracy and free markets absolutely could not tolerate extreme inflation or extreme unemployment. So in the Great Depression, he said this is a short run problem; it doesn’t mean that the long run dynamism has died out, but we need to deal with this.

Ryssdal: So is it possible now that the tree of economics — if I can use a grand metaphor — has grown so large now, and there are so many practitioners, that it’s unlikely for us to see, think — like Keynes or Beatrice Webb or Alfred Marshall again — who’s going to be as transformative as those people were?

Nasar: You know, people have said many times, and I think John Stuart Mill said it in 1848, that ‘OK, economics is done. The cathedral has been built, and now, you know, there’s really nothing left to do.’ And so far, it’s never come to an end. Why? Because — aren’t there more challenges?

Ryssdal: Yeah. Sylvia Nasar teaches journalism at Columbia University. Her most recent book is called “Grand Pursuit: The Story of Economic Genius.” It’s worth a read. Sylvia, thanks a lot.

Nasar: Kai, thank you.

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