Economics (Tenth Edition) - Paul A. Samuelson

I spotted this 900-page behemoth in a second-hand bookshop in Blackheath, and recognised the author name from one of Taleb's rants. A quick, cheap impulse buy, it was an entirely uneconomical decision, since the cost of the book's paled into insignificance compared to the amount of time I've invested reading it.

It should be noted that the tenth edition is from 1976! Hence this review is very unlikely to correspond to the latest edition! As well as being my first proper introduction to macro- and micro-economics, it's also a fantastic insight into the 1970s!

So, first the subject of economics. It really is a woolly 'science'! (At least at the introductory undergrad level). All equilibria are simplified to two intersecting curves on x-y plots, simultaneously a very powerful and very naive technique. The macroeconomics part of the book becomes quite hand-wavey as it talks about how the system reacts to the varying of individual parameters, holding all others constants, when in the real world pretty much every parameter is a function of others, through hidden relationships. This does not stop conclusions being drawn from such simple models, although their validity can be somewhat suspect. The description of monetarism is not helped by the way it appears to ignore the actual value of money. Hey ho.

On the microeconomics side, this mostly seems to be the magic of auctioning as a price discovery mechanism which gets you goods cheaper than you'd pay, and for more than it costs to make them. Of course, this depends on a lack of monopoly (or even oligopoly) , and this is where the book seems to show the change in attitudes. The book places the removal of monopoly as vital to the running of an efficient economy, and talks about historical action against monoplies, and how they can be handled, as if it's something to be expected. Fast-forward 30 years, and nobody bats an eye-lid at e.g. Microsoft. I suppose only by reading something like this can you realise how far things have moved towards a laissez-faire attitude that now looks like it's coming back to bite us.

The book's view of stagflation is... interesting. Being written in the midst of a big period of stagflation, the book's long on discussion, and short on solutions. Somewhat disappointing as I was hoping it'd be a guide to one of the more looming threats.

Throughout there's quite the feeling of liberalism and discontent - a certain 'What now?' for economics. It discusses Marxism and alternative measures of productivity with a pretty straight face, although you can tell this is just the tenth edition gloss on top of a fairly optimistic original Keynesian text.

In combination with the book's fantastic orange-brown-green-black colour scheme, this is a great historical document, as well as an introduction to economics. A view of the world well before the Berlin wall came down, or indeed before the West knew China had been starving millions. And at the same time, it's a far more human textbook than many more modern treatments.

Posted 2008-10-12.