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Clif's Book World

Adventures from reading books captured within short reviews.

Why Economies Rise or Fall

Why Economies Rise or Fall - Peter Rodriguez I listened to these lectures in the hope that I'd acquire some perspective on why some economies prosper and others don't. The size of the spread between rich and poor countries, as with rich and poor individuals, is wider than it's ever been before. I want to support those measures which will, to the extent possible, relieve the suffering due to poverty throughout the world. I know enough about unintended consequences to know that solutions to these types of problems are not always obvious.

These lectures maintain that no model of macro-economics (large scale) promoted by any particular "isms" of economic theory can insure economic growth. There are examples, both good and bad, that can prove just about any point encountered within economic arguments. However, there are some micro-economic (individual human level) models that reliably promote economic success. These models are based on the truth that, at the micro-economic level, incentives matter and people respond to incentives. However, people don't always respond to incentives in anticipated ways, and incentives are not simple things to create.

So after listening to 24 lectures, am I any smarter about why economies rise or fall? Well, I don't feel all that smart. However, I take comfort in noticing that the professional economists seem to be totally incapable of anticipating future economic collapses. I couldn't help but notice that the bursting of the Japanese asset price bubble in 1991 took all the experts by surprise. Likewise the 1997 financial crisis experienced by the east Asia "tiger" economies apparently took everybody by surprise. And most recently there was the 2008 American recession. It seems that with all these examples to learn from that these sorts of problems could be anticipated and possibly prevented.

I appreciated that the lecturer was willing to admit that economics is not a science, but it's sort of scientish. I presume that means that it is a field of endeavor that strives to appear to be scientific, but it's not really.