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Seven Deadly Economic Sins: Obstacles to Prosperity and Happiness Every Citizen Should Know
You have heard of the Seven Deadly Sins: pride, greed, lust, envy, gluttony, wrath, and sloth. Each is a natural human weakness that impedes happiness. In addition to these vices, however, there are economic sins as well. And they, too, wreak havoc on our lives and in society. They can seem intuitively compelling, yet they lead to waste, loss, and forgone prosperity. In this thoughtful and compelling book, James Otteson tells the story of seven central economic fallacies, explaining why they are fallacies, why believing in them leads to mistakes and loss, and how exorcizing them from our thinking can help us avoid costly errors and enable us to live in peace and prosperity.
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Published December 1, 2020
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About the author
James R. Otteson
19 books18 followersJames R. Otteson is an American philosopher and political economist. He is the Thomas W. Smith Presidential Chair in Business Ethics, Professor of Economics, and executive director of the BB&T Center for the Study of Capitalism at Wake Forest University.
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Displaying 1 - 18 of 18 reviews
August 7, 2021
If you don’t want to read my critique of this book please read the article in the following link. In 16 pages the author gives a far superior and more compelling presentation of why market economies are great but also lays out the flaws and dangers that need to be addressed. Read this and skip this book:
https://www.smf.co.uk/publications/th...
I came to this book with a positive attitude. I broadly agree with the authors main thesis that market’s are a great human invention that has led to broad human prosperity and is far superior to the alternative (“extraction” or socialized economies a la the Soviet model). At first I gave the author the benefit of the doubt that his simple sounding arguments were just a stylistic method to explain complex economic ideas to a lay audience. But the more I read the more irked I was by how simplistic his arguments were—often becoming simple minded and down right disingenuous.
Perhaps the title gives away why this book is so awful. Instead of being a detached philosophical analysis of markets and morality it is a theological text written by a religious fanatic who sees any critique of his beloved “religion” as heresy.
The core argument of the text is:
1. The amazing growth in human prosperity since 1800 is the result of our switch to market economies
2. Market economies are inherently based on the moral principle of equality of human agency (Kant’s moral imperative)
Ergo based on utilitarian grounds (maximizing happiness defined as eudaemia - point 1) and Kantian morality (point 2) any “collectivist” intervention at all in market economies is going to make humanity worse off and is also immoral.
The rest of the book is a a discussion of the “flawed” ideas that are used to justify interventions of the sort the author feels are immoral, along with examples of how such interventions make us worse off.
I can write a whole book critiquing those flawed discussion, which I note earlier often are simple minded and disingenuous. But to save time I”ll go right to the heart: the flaw in his premises.
In terms of point 1, a more compelling case can be made that human prosperity since 1800 is a result of technological innovation (it is no coincidence that the cotton gin was invented in 1793) spurred on by:
1. The spread of Enlightenment values
2. European wealth from mercantilism and subsequent colonial “extraction”
In fact, it seems that the success of the market approach was precisely enabled by this technological innovation. The most effective use of any technology, since the beginning of human history, is based on co-operation and trust. Market economies turned out to be the most effective approach for leveraging trust and co-operation to accelerate the benefits of industrial innovations of the 19th and 20th century and information technology of the 21st.
Hence, we are compelled to accept two “heresies” against the author’s faith in markets:
1. markets are a means not an end and therefore they have no inherent moral value.
2. Like all human means, they need to be constantly evaluated, tinkered with, modified and improved.
As for the second “heresy”, one of the worst parts of the book is because of his fanatical faith the author downplays any flaws in market systems and refuses to consider improvements. His default stance is improvements will make things worse.
As for the second premise, Kantian morality is not a good guide for right action. Kant argues, for example, that if the police came to arrest my child the categorical imperative compels me to turn him in. Most humans would agree such behavior is repulsive and even inhuman. While Kantian morality is and should be an important consideration, humans have multiple competing values and deciding on right action is not feasible through some rational calculus. (BTW, the same critique applies to utilitarianism). This critique explains why Aristotelian virtue ethics is once again gaining popularity amongst philosophers.
Here is one concrete example (of many I could give) of how the above analysis applies to the authors arguments. The author claims that taxing the rich in market based economies sounds like a good idea. But doing so will cause distortion in the market mechanism by discouraging entrepreneurship and so make markets less effective and decrease prosperity. Even if we concede some of the wealth was accumulated through extraction, since we can’t possibly know how much, and since most of the wealth was accumulated morally (markets are moral after all), taxing the rich proportionally more, is theft and immoral.
1. Most of the super rich got there by exploiting flaws in markets to extract rent. They use their wealth for cronyism (buying laws beneficial to preserving their capacity to extract rent and protect their wealth). Even in the relatively meritorious world of technology entrepreneurship where parts of the wealth is definitely not extraction, once someone gets to that level of wealth, inevitably at least some of it will be gained by rent extraction. And someone like Bezos (who comes up several times in the book) has gathered most of his wealth by rent extraction. Sure we can’t come up with a precise evaluation of how much is rent and how much is through co-operative market wealth creation, but when we get to those large numbers does it really matter? Most importantly, there is no inherent “morality” in wealth accumulated in markets!
2. Let us concede for the sake of argument, that there are some theoretical billionaires whose wealth was 100% created without extracting rents, and taking more taxes from them than other people is morally “unfair”. But as individuals and as a society, we might justifiably value the distress of a poor person over the value to the billionaire of his buying another airplane or Ferrari or house in LA and so take a proportionally larger share of taxes and redistribute to less fortunate people without any ethical qualms. On the contrary, doing so is the right thing to do because we value fraternity over liberty in some cases.
I will conclude by noting the authors detachment from the suffering of poor people in his own country (“after all they aren’t living off $3 a day like people did before 1800l) to be a perfect example of how religious fanaticism leads one astray from right action and human values.
https://www.smf.co.uk/publications/th...
I came to this book with a positive attitude. I broadly agree with the authors main thesis that market’s are a great human invention that has led to broad human prosperity and is far superior to the alternative (“extraction” or socialized economies a la the Soviet model). At first I gave the author the benefit of the doubt that his simple sounding arguments were just a stylistic method to explain complex economic ideas to a lay audience. But the more I read the more irked I was by how simplistic his arguments were—often becoming simple minded and down right disingenuous.
Perhaps the title gives away why this book is so awful. Instead of being a detached philosophical analysis of markets and morality it is a theological text written by a religious fanatic who sees any critique of his beloved “religion” as heresy.
The core argument of the text is:
1. The amazing growth in human prosperity since 1800 is the result of our switch to market economies
2. Market economies are inherently based on the moral principle of equality of human agency (Kant’s moral imperative)
Ergo based on utilitarian grounds (maximizing happiness defined as eudaemia - point 1) and Kantian morality (point 2) any “collectivist” intervention at all in market economies is going to make humanity worse off and is also immoral.
The rest of the book is a a discussion of the “flawed” ideas that are used to justify interventions of the sort the author feels are immoral, along with examples of how such interventions make us worse off.
I can write a whole book critiquing those flawed discussion, which I note earlier often are simple minded and disingenuous. But to save time I”ll go right to the heart: the flaw in his premises.
In terms of point 1, a more compelling case can be made that human prosperity since 1800 is a result of technological innovation (it is no coincidence that the cotton gin was invented in 1793) spurred on by:
1. The spread of Enlightenment values
2. European wealth from mercantilism and subsequent colonial “extraction”
In fact, it seems that the success of the market approach was precisely enabled by this technological innovation. The most effective use of any technology, since the beginning of human history, is based on co-operation and trust. Market economies turned out to be the most effective approach for leveraging trust and co-operation to accelerate the benefits of industrial innovations of the 19th and 20th century and information technology of the 21st.
Hence, we are compelled to accept two “heresies” against the author’s faith in markets:
1. markets are a means not an end and therefore they have no inherent moral value.
2. Like all human means, they need to be constantly evaluated, tinkered with, modified and improved.
As for the second “heresy”, one of the worst parts of the book is because of his fanatical faith the author downplays any flaws in market systems and refuses to consider improvements. His default stance is improvements will make things worse.
As for the second premise, Kantian morality is not a good guide for right action. Kant argues, for example, that if the police came to arrest my child the categorical imperative compels me to turn him in. Most humans would agree such behavior is repulsive and even inhuman. While Kantian morality is and should be an important consideration, humans have multiple competing values and deciding on right action is not feasible through some rational calculus. (BTW, the same critique applies to utilitarianism). This critique explains why Aristotelian virtue ethics is once again gaining popularity amongst philosophers.
Here is one concrete example (of many I could give) of how the above analysis applies to the authors arguments. The author claims that taxing the rich in market based economies sounds like a good idea. But doing so will cause distortion in the market mechanism by discouraging entrepreneurship and so make markets less effective and decrease prosperity. Even if we concede some of the wealth was accumulated through extraction, since we can’t possibly know how much, and since most of the wealth was accumulated morally (markets are moral after all), taxing the rich proportionally more, is theft and immoral.
1. Most of the super rich got there by exploiting flaws in markets to extract rent. They use their wealth for cronyism (buying laws beneficial to preserving their capacity to extract rent and protect their wealth). Even in the relatively meritorious world of technology entrepreneurship where parts of the wealth is definitely not extraction, once someone gets to that level of wealth, inevitably at least some of it will be gained by rent extraction. And someone like Bezos (who comes up several times in the book) has gathered most of his wealth by rent extraction. Sure we can’t come up with a precise evaluation of how much is rent and how much is through co-operative market wealth creation, but when we get to those large numbers does it really matter? Most importantly, there is no inherent “morality” in wealth accumulated in markets!
2. Let us concede for the sake of argument, that there are some theoretical billionaires whose wealth was 100% created without extracting rents, and taking more taxes from them than other people is morally “unfair”. But as individuals and as a society, we might justifiably value the distress of a poor person over the value to the billionaire of his buying another airplane or Ferrari or house in LA and so take a proportionally larger share of taxes and redistribute to less fortunate people without any ethical qualms. On the contrary, doing so is the right thing to do because we value fraternity over liberty in some cases.
I will conclude by noting the authors detachment from the suffering of poor people in his own country (“after all they aren’t living off $3 a day like people did before 1800l) to be a perfect example of how religious fanaticism leads one astray from right action and human values.
July 3, 2021
Otro necesario libro que defiende la idea del sentido común en los gobiernos y el manejo de la economía. Llamándoles «pecados», el autor explora ampliamente el significado de lo que luego llama falacias, y que describen siete errores que muchos cometen acerca del funcionamiento de la actividad económica. Lo hace bien y con amplitud, dejando ver claramente su educación filosófica antes que económica.
Una obra que será de uso útil para quien tenga curiosidad sobre el tema y desee mejorar la base de sus opiniones. Y de beneficio general si fuera leído por políticos, gobernantes, legisladores y jueces, que muestran a diario un analfabetismo económico considerable que a tantos daña.
Hay otros libros del mismo tipo, el clásico es «Economía en una lección» de H. Hazllit, más otros de T. Sowell y F. Bastiat.
Una obra que será de uso útil para quien tenga curiosidad sobre el tema y desee mejorar la base de sus opiniones. Y de beneficio general si fuera leído por políticos, gobernantes, legisladores y jueces, que muestran a diario un analfabetismo económico considerable que a tantos daña.
Hay otros libros del mismo tipo, el clásico es «Economía en una lección» de H. Hazllit, más otros de T. Sowell y F. Bastiat.
November 21, 2024
Seven Deadly Economic Sins: A philosophical look at the economy and the moral obstacles to shared affluence.
“This book is based on the assumption that we all want a just and human society – that wherever we are on the political or economic spectrum, we all want a society whose public institutions protect justice and in which people are able to construct for themselves lives of meaning, purpose, and happiness”. James Otteson.
Almost everyone has heard of the Biblical list of vices which make up the seven deadly sins; pride, greed, wrath, envy, lust, gluttony and sloth. James Otteson in his book ‘Seven Deadly Economic Sins” emphasises that, like the moral transgressions warned against in the Bible, there also economic sins which can be detrimental to society, and its citizens’ wellbeing and prosperity. Ottenson is a philosopher and political economist; known for his study on the works of Adam Smith, whose influence is felt throughout the book. The Seven Deadly Economic Sins analyses the economy and marketplace from a philosophical angle, empathising the importance of morality in the marketplace, not merely for our conscious – but to enable the growth of wealth and prosperity.
The book starts by looking at the failures of generations past, and how the wealth of Nations has sometimes, historically, been generated from extraction. Otteson uses the term extraction to describe the wealth built from the conquering, enslavement or forced labour of others. Zero sum transactions such as these, are those in which only one counterparty benefits, at the expense of the other party, who has no choice or freedom in the transaction. History’s love affair with extraction, and zero sum economies, is the culprit of economic equalities and the unjust circumstances of the World’s poorest. The move towards an open economy, and free markets, in the last century has resulted in “measures of human flourishing now at levels higher than they have ever been”. Otteson emphasises that in order to keep increasing the average wealth of citizens, we must have a positive sum market; free markets where all parties benefit from transactions, and where all have the freedom to choose.
It is interesting to see how Adam Smith and his theories influence Otteson’s work, as the philosophical economist reiterates Smiths’ emphasis that the protection of private property, open markets and free trade is essential to ensure prosperity for all. Dismissing the age-old view that economics is a cold, zero sum discipline; replacing it with the notion that the new age of economics is moving away from its historical moral fallacies of the past. In order to ensure that the continued growth of the average wealth of citizens continues, these values must be protected at all costs. Although we may not directly profit from certain trade transactions, everyone ultimately benefits from an open market, and having the choice to opt-out or engage. Otteson successfully ties together economics and moral philosophy, and the important relationship between the two, without sounding too idealistic and out of touch – albeit a little longwinded; very much worth the read.
“This book is based on the assumption that we all want a just and human society – that wherever we are on the political or economic spectrum, we all want a society whose public institutions protect justice and in which people are able to construct for themselves lives of meaning, purpose, and happiness”. James Otteson.
Almost everyone has heard of the Biblical list of vices which make up the seven deadly sins; pride, greed, wrath, envy, lust, gluttony and sloth. James Otteson in his book ‘Seven Deadly Economic Sins” emphasises that, like the moral transgressions warned against in the Bible, there also economic sins which can be detrimental to society, and its citizens’ wellbeing and prosperity. Ottenson is a philosopher and political economist; known for his study on the works of Adam Smith, whose influence is felt throughout the book. The Seven Deadly Economic Sins analyses the economy and marketplace from a philosophical angle, empathising the importance of morality in the marketplace, not merely for our conscious – but to enable the growth of wealth and prosperity.
The book starts by looking at the failures of generations past, and how the wealth of Nations has sometimes, historically, been generated from extraction. Otteson uses the term extraction to describe the wealth built from the conquering, enslavement or forced labour of others. Zero sum transactions such as these, are those in which only one counterparty benefits, at the expense of the other party, who has no choice or freedom in the transaction. History’s love affair with extraction, and zero sum economies, is the culprit of economic equalities and the unjust circumstances of the World’s poorest. The move towards an open economy, and free markets, in the last century has resulted in “measures of human flourishing now at levels higher than they have ever been”. Otteson emphasises that in order to keep increasing the average wealth of citizens, we must have a positive sum market; free markets where all parties benefit from transactions, and where all have the freedom to choose.
It is interesting to see how Adam Smith and his theories influence Otteson’s work, as the philosophical economist reiterates Smiths’ emphasis that the protection of private property, open markets and free trade is essential to ensure prosperity for all. Dismissing the age-old view that economics is a cold, zero sum discipline; replacing it with the notion that the new age of economics is moving away from its historical moral fallacies of the past. In order to ensure that the continued growth of the average wealth of citizens continues, these values must be protected at all costs. Although we may not directly profit from certain trade transactions, everyone ultimately benefits from an open market, and having the choice to opt-out or engage. Otteson successfully ties together economics and moral philosophy, and the important relationship between the two, without sounding too idealistic and out of touch – albeit a little longwinded; very much worth the read.
January 2, 2022
The premise of the book is good, but the writing lacks polish. Besides being somewhat repetitious, it reads sort of like a dissertation (or maybe a series of class lectures) taking irritating care not to offend the politically correct (e.g., “a person” becomes “she”—or later “he” to presumably demonstrate fairness—,“anyone” becomes “them,” “everyone” becomes “they”.......). I contend that by acquiescing to the new, new socialistic language edicts, the author reduces himself to mistaking superficial notions about “equality” of verbal expression just as he addresses the critics of market economics for misunderstanding the inherent equality of economic exchange.
Although his arguments are essentially good, I judged a lack of clarity sometimes in his expression of them.. He names the Seven Economic Sins/Fallacies explicitly in the book’s Introduction. But for the seven chapter discussions of one “fallacy”each, he fails to repeat the named Sin, instead jumping immediately to make his case for the opposite conclusions. Finally, in an eighth chapter he adds the moral reasoning for market economic exchange. This is valid, but for a squishy insistence that everyone should “respect” everyone else’s ideas and opinions. I might argue that sometimes to “respect” the ideas of others (especially those of certain policy-making politicians?) can actually be decidedly immoral.
Overall, a pretty good attempt to explain “fair economic exchange” to doubters. I hope he succeeds.
Although his arguments are essentially good, I judged a lack of clarity sometimes in his expression of them.. He names the Seven Economic Sins/Fallacies explicitly in the book’s Introduction. But for the seven chapter discussions of one “fallacy”each, he fails to repeat the named Sin, instead jumping immediately to make his case for the opposite conclusions. Finally, in an eighth chapter he adds the moral reasoning for market economic exchange. This is valid, but for a squishy insistence that everyone should “respect” everyone else’s ideas and opinions. I might argue that sometimes to “respect” the ideas of others (especially those of certain policy-making politicians?) can actually be decidedly immoral.
Overall, a pretty good attempt to explain “fair economic exchange” to doubters. I hope he succeeds.
March 24, 2023
SEVEN DEADLY ECONOMIC SINS | James Otteson, Cambridge University Press, (2021), p322
Economist James Otteson provides a thought-provoking examination of the global economy’s current state and challenges. Otteson argues that the current economic system is plagued by seven fallacies that misguide policymakers and the public.
Otteson’s seven are 1 - The Wealth Is Zero Sum Fallacy, 2 - the Good Is Good Enough Fallacy, 3- the Great Mind Fallacy, 4- the Progress Is Inevitable Fallacy, 5- the Economics Is Amoral Fallacy, 6- The We Should Be Equal Fallacy, and 7- he Markets Are Perfect Fallacy. He adds an eighth bonus fallacy in his conclusion, which he calls the I Am the World Fallacy.
Many readers will likely find some of these challenging, given their counter-factual staying power within the current culture. The narcissism and conceit that drive the Good is Good Enough, Great Minds, and We All Should Be Equal fallacy are deeply engrained within the misshapen modern mind that the reasoning and facts will find challenge in taking root. But Otteson jousts adroitly.
Schumpeter warned, “the typical citizen drops down to a lower level of mental performance as soon as he enters the political field.” This is evident. However, the more people consume content like Otteson’s treasure trove of reflections and facts, the better our grand experiment in self-rule will fare.
Economist James Otteson provides a thought-provoking examination of the global economy’s current state and challenges. Otteson argues that the current economic system is plagued by seven fallacies that misguide policymakers and the public.
Otteson’s seven are 1 - The Wealth Is Zero Sum Fallacy, 2 - the Good Is Good Enough Fallacy, 3- the Great Mind Fallacy, 4- the Progress Is Inevitable Fallacy, 5- the Economics Is Amoral Fallacy, 6- The We Should Be Equal Fallacy, and 7- he Markets Are Perfect Fallacy. He adds an eighth bonus fallacy in his conclusion, which he calls the I Am the World Fallacy.
Many readers will likely find some of these challenging, given their counter-factual staying power within the current culture. The narcissism and conceit that drive the Good is Good Enough, Great Minds, and We All Should Be Equal fallacy are deeply engrained within the misshapen modern mind that the reasoning and facts will find challenge in taking root. But Otteson jousts adroitly.
Schumpeter warned, “the typical citizen drops down to a lower level of mental performance as soon as he enters the political field.” This is evident. However, the more people consume content like Otteson’s treasure trove of reflections and facts, the better our grand experiment in self-rule will fare.
May 26, 2023
Otteson lists seven fallacies he regards as inimical to economic prosperity for self and country. The first problem with the book is that he does not establish that his fallacies are actual problems. One of his fallacies (no Great Minds to guide economics) is not one I have found seriously expounded outside communist countries, and two others (economics is moral, and full equality is undesirable if not impossible) don't seem, in my experience, very widespread either.
Otteson is a moral philosopher, not an economist (he got to economics via Adam Smith, who was also a moral philosopher), and the book hits heavily on moral aspects. His thesis is that market economies, characterized by cooperation, not extraction, are a great Good. Although his seventh fallacy makes the point that markets are not perfect, he downplays the problems greatly. Apparently he believes that the present market is the best it could possibly be. He even cites a book (Scheidel, _The Great Leveler_) that makes the case that wealth inequality continues to increase until some kind of disaster mitigates it, and then says we should ignore wealth inequality.
Finally, the book often states the obvious and sometimes repeats itself. If you're going to read this book, the first two chapters (about economics not being zero-sum, and about opportunity costs), and skip the rest.
Otteson is a moral philosopher, not an economist (he got to economics via Adam Smith, who was also a moral philosopher), and the book hits heavily on moral aspects. His thesis is that market economies, characterized by cooperation, not extraction, are a great Good. Although his seventh fallacy makes the point that markets are not perfect, he downplays the problems greatly. Apparently he believes that the present market is the best it could possibly be. He even cites a book (Scheidel, _The Great Leveler_) that makes the case that wealth inequality continues to increase until some kind of disaster mitigates it, and then says we should ignore wealth inequality.
Finally, the book often states the obvious and sometimes repeats itself. If you're going to read this book, the first two chapters (about economics not being zero-sum, and about opportunity costs), and skip the rest.
December 6, 2021
James Otteson, a professor of economic philosophy, specializing in the work of Adam Smith lays out an economic primer on economic decision and policy making. Otteson's arguments are well reasoned he uses them to recommend largely laissez-faire and libertarian policy.
The arguments make sense on an individual and one on one level, but hinge on all players reaching agreement cooperatively and avoiding extractive behavior, behavior when assets and resources are taken from another party without their tacit agreement. He argues that extractive behavior should be prevented by governments and firms protecting each individual' rights to the three p's of person, property and promise but stopping there. Ottesen feels there is great risk in allowing a central government or leaders setting policy for a large populace.
The reality of human selfishness and fear always lurked in the back of my mind when reading through Otteson's seven suggestions on how core capitalist principles should guide us. While a core understanding of how an economy works is essential for good policy making, the lack of any central policy would drive just as much chaos as centralized authoritarian policy.
The arguments make sense on an individual and one on one level, but hinge on all players reaching agreement cooperatively and avoiding extractive behavior, behavior when assets and resources are taken from another party without their tacit agreement. He argues that extractive behavior should be prevented by governments and firms protecting each individual' rights to the three p's of person, property and promise but stopping there. Ottesen feels there is great risk in allowing a central government or leaders setting policy for a large populace.
The reality of human selfishness and fear always lurked in the back of my mind when reading through Otteson's seven suggestions on how core capitalist principles should guide us. While a core understanding of how an economy works is essential for good policy making, the lack of any central policy would drive just as much chaos as centralized authoritarian policy.
August 20, 2022
[Imported automatically from my blog. Some formatting there may not have translated here.]
This book was one of the nominees for the 2022 Hayek Book Prize, so I thought it might be a good choice to obtain via the Interlibrary Loan services of the University Near Here Library. Soon enough, it arrived from the good people at Michigan State.
I had previously read the winning book, Joseph Henrich's The WEIRDest People in the World, which I liked; and Gerald Gaus's The Open Society and Its Complexities, which (I admit) was way too advanced for me. This one's good but a tad on the too-simple side.
And the title's a little misleading. The author, James R. Otteson, doesn't really organize his book around those seven "sins"; the title might have been an eye-grabbing effort by the publisher. (Those wild and crazy folks at Cambridge University Press!) Instead, Otteson details seven economic and philosophical principles underlying progress and prosperity, showing how those principles contradict corresponding popular fallacies.
Those principles: (1) Voluntary economic transactions are positive-sum, adding to wealth, in contrast to "extractive" coerced transactions, which are often zero-sum at best, and usually negative-sum. (2) A rational economic order requires attention to opportunity costs. (3) Economic decision-making involves local knowledge unavailable to would-be central planners; (4) Economic progress relies on a supporting foundation of public processes and institutions that should not be taken for granted. (5) Another vital foundation of prosperity is recognizing the virtue inherent in lightly-regulated markets. (6) The only "equality" worth defending is the equal moral worth of individuals. And finally, (7) markets are great, but inapplicable in numerous settings.
I've simplified Otteson's points considerably. He draws on the wisdom of Adam Smith, Frédéric Bastiat, Hayek, McCloskey, and numerous others in support.
The book can seem a little repetitious at times, and this was apparent right from Chapter One. Forty-nine pages to hammer home, belabor, dwell on, and emphasize the nature of wealth-creating economic transactions? Certainly in my case he was preaching to the choir and pushing on an already wide-open door, but …
However, I think Otteson's overall approach is valuable, providing an overall moral case for the free market. I'd recommend this for any bright high schooler or undergrad who's economics-curious.
December 30, 2021
I received a PRC from NetGalley and the publisher in exchange for my honest review. I appreciate the author's effort in "dumbing things" down to a lay person, but despite that I still found it to be a bit too verbose. I had a difficult time finishing this book for that reason - it took me about 6 months to finish it! But I can't hold this against Mr. Ottenson. Perhaps others will find his book more compelling.
January 2, 2022
I was so ready to love this book and I do agree with so much of it, but I felt a little let down in the end. Came off more preachy than persuasive in many parts. I want people to be convinced of many of the points made, but I don't know if they will be. Perhaps that's all just due to my own background (economics and philosophy). As alternatives or complements I would recommend McCloskey's 'Why liberalism works' and Heath's 'Filthy lucre'.
September 19, 2023
Good summary of fundamental economics. Otteson uses a classic Austrian economics point of view to help all to understand how to create prosperity in society. This book is very readable and is easily understood yet specific in pointing out how economic principles and mental models apply to the commenwealth of mankind.
January 12, 2022
Very well written, thought-provoking.
The author has taken seven Economics concepts and given them a good airing. This is a good read for people who are not afraid to think about Economics beyond superficiality and slogans.
The author has taken seven Economics concepts and given them a good airing. This is a good read for people who are not afraid to think about Economics beyond superficiality and slogans.
March 24, 2023
A very cogent book on the value of economics to foster prosperity. Otteson does a great job of making Adam Smith relevant and digestible for the modern reader. Even if you're not a libertarian, you will likely gain a great appreciation for moral arguments for promoting a free-market system.
July 27, 2021
A very good and compelling introduction to economics and classical liberalism. Were it not for the weaker second part of the book and some inconsistencies I would have given it 5 stars.
January 1, 2022
Excellent introduction to economics from a conservative perspective. Includes a thought provoking and fair definition of justice. Occasional missteps into evolutionary speculation. I loved this book.
June 12, 2022
Philosophical based exploration of economic concepts and theories. Good for understanding the morality of economics as a focus of ordering of our society.
October 22, 2022
Translation of Adam Smith Economic wisdom with the structure of the supposed seven deadly sins. That smith guy still brings it more than 250 years later. Voluntary association voluntary exchange, protect the 3 Ps: People,
January 23, 2022
This review, I think, will be the longest I’ve written in Goodreads so far.
This book is basically a paean to markets. Now I was a philosopher before I was an economist (in terms of training). So I very much appreciate the criticism of economics from a philosophical perspective. Otteson does this very well. He writes clearly and argues with an earnest attempt to tackle problems and his reasoning is often sound.
However. When one ventures into another’s domain, one should retain a modicum of humility. I have lectured at Norte Dame and can attest to the quality of the faculty there. So why didn’t Otteson get an economist to edit his manuscript? The most glaring error (a common one from non-economists, but still) is confusing absolute and comparative advantage. (The latter is sometimes called “relative advantage.).
The notion of absolute advantage (though not a term used at the time) is explained by Adam Smith. But it took the next generation (in the person of David Ricardo) to build on Smith and introduce comparative advantage. This error doesn’t really undermine Otteson’s central arguments, but it is irritating, as when someone repeatedly complains about your “pronounciation”. It lessens credibility.
Otteson also sees unanimity among economists where I do not. For example, fifty years ago there was consensus that a minimum wage had a net social cost but, since the 1990s, research has divided opinion among economists sharply. In fact, this may be the one area in economics today with the least consensus. (Modern economic theory predicts that although an excessive minimum wage may raise unemployment as it fixes a price above most demand for labor, a minimum wage at a more reasonable level can increase employment, and enhance growth and efficiency. See Card and Kruger, 1995.)
Freedom (what Otteson calls “agency”) is something we all value. Free markets, in ideal conditions, are a marvel. Otteson gives the impression that he has recently discovered the beauty of perfect competition and the price system and so gives short shrift to market failure. Recall Anatole France: “In its majestic equality, the law forbids rich and poor alike to sleep under bridges, beg in the streets and steal loaves of bread.” Power imbalances may precede participation in a market. Markets have friction and externalities and lack perfect information. And even with perfect information, you tend to treat your future self as a distinct person. Gilbert says we are terrible at predicting our future happiness. And Thaler and Sunstein (from the Chicago School!) wrote a whole book on how the government can keep libertarians happy while helping us make better decisions now (NUDGE). Ariely literally wrote the book on Irrationality (PREDICTABLY IRRATIONAL).
One example is called “Save More Later”. If you ask your employees how much they would contribute to their own retirement funds and they give you a number to deduct from their paychecks, but then you tell them the program doesn’t start for six months, most employees will increase (substantially) their contribution, because they’re deciding today to make a future sacrifice.
Another: make organ donation “opt out” instead of “opt in”. Everybody gets to decide what to do with their organs after death, but society benefits from many more with the former option. Government action benefits everybody here, and harms no one.
So, no, Otteson did not convince me that governments should interfere less in markets. They should not be heavy-handed, but neither should they be absent. Regulation can make life better for everyone.
Nonetheless, the book was interesting, stimulating, and I might recommend it, with these caveats.
This book is basically a paean to markets. Now I was a philosopher before I was an economist (in terms of training). So I very much appreciate the criticism of economics from a philosophical perspective. Otteson does this very well. He writes clearly and argues with an earnest attempt to tackle problems and his reasoning is often sound.
However. When one ventures into another’s domain, one should retain a modicum of humility. I have lectured at Norte Dame and can attest to the quality of the faculty there. So why didn’t Otteson get an economist to edit his manuscript? The most glaring error (a common one from non-economists, but still) is confusing absolute and comparative advantage. (The latter is sometimes called “relative advantage.).
The notion of absolute advantage (though not a term used at the time) is explained by Adam Smith. But it took the next generation (in the person of David Ricardo) to build on Smith and introduce comparative advantage. This error doesn’t really undermine Otteson’s central arguments, but it is irritating, as when someone repeatedly complains about your “pronounciation”. It lessens credibility.
Otteson also sees unanimity among economists where I do not. For example, fifty years ago there was consensus that a minimum wage had a net social cost but, since the 1990s, research has divided opinion among economists sharply. In fact, this may be the one area in economics today with the least consensus. (Modern economic theory predicts that although an excessive minimum wage may raise unemployment as it fixes a price above most demand for labor, a minimum wage at a more reasonable level can increase employment, and enhance growth and efficiency. See Card and Kruger, 1995.)
Freedom (what Otteson calls “agency”) is something we all value. Free markets, in ideal conditions, are a marvel. Otteson gives the impression that he has recently discovered the beauty of perfect competition and the price system and so gives short shrift to market failure. Recall Anatole France: “In its majestic equality, the law forbids rich and poor alike to sleep under bridges, beg in the streets and steal loaves of bread.” Power imbalances may precede participation in a market. Markets have friction and externalities and lack perfect information. And even with perfect information, you tend to treat your future self as a distinct person. Gilbert says we are terrible at predicting our future happiness. And Thaler and Sunstein (from the Chicago School!) wrote a whole book on how the government can keep libertarians happy while helping us make better decisions now (NUDGE). Ariely literally wrote the book on Irrationality (PREDICTABLY IRRATIONAL).
One example is called “Save More Later”. If you ask your employees how much they would contribute to their own retirement funds and they give you a number to deduct from their paychecks, but then you tell them the program doesn’t start for six months, most employees will increase (substantially) their contribution, because they’re deciding today to make a future sacrifice.
Another: make organ donation “opt out” instead of “opt in”. Everybody gets to decide what to do with their organs after death, but society benefits from many more with the former option. Government action benefits everybody here, and harms no one.
So, no, Otteson did not convince me that governments should interfere less in markets. They should not be heavy-handed, but neither should they be absent. Regulation can make life better for everyone.
Nonetheless, the book was interesting, stimulating, and I might recommend it, with these caveats.
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