The Darwin Economy: Liberty, Competition, and the Common Good [New in Paper]by Robert H. Frank
Pub. Date: 09/16/2012
Publisher: Princeton University Press
Who was the greater economistAdam Smith or Charles Darwin? The question seems absurd. Darwin, after all, was a naturalist, not an economist. But Robert Frank, New York Times economics columnist and best-selling author of The Economic Naturalist, predicts that within the next century Darwin will unseat Smith as the intellectual founder of/i>/i>
Who was the greater economistAdam Smith or Charles Darwin? The question seems absurd. Darwin, after all, was a naturalist, not an economist. But Robert Frank, New York Times economics columnist and best-selling author of The Economic Naturalist, predicts that within the next century Darwin will unseat Smith as the intellectual founder of economics. The reason, Frank argues, is that Darwin's understanding of competition describes economic reality far more accurately than Smith's. And the consequences of this fact are profound. Indeed, the failure to recognize that we live in Darwin's world rather than Smith's is putting us all at risk by preventing us from seeing that competition alone will not solve our problems.
Smith's theory of the invisible hand, which says that competition channels self-interest for the common good, is probably the most widely cited argument today in favor of unbridled competitionand against regulation, taxation, and even government itself. But what if Smith's idea was almost an exception to the general rule of competition? That's what Frank argues, resting his case on Darwin's insight that individual and group interests often diverge sharply. Far from creating a perfect world, economic competition often leads to "arms races," encouraging behaviors that not only cause enormous harm to the group but also provide no lasting advantages for individuals, since any gains tend to be relative and mutually offsetting.
The good news is that we have the ability to tame the Darwin economy. The best solution is not to prohibit harmful behaviors but to tax them. By doing so, we could make the economic pie larger, eliminate government debt, and provide better public services, all without requiring painful sacrifices from anyone. That's a bold claim, Frank concedes, but it follows directly from logic and evidence that most people already accept.
In a new afterword, Frank further explores how the themes of inequality and competition are driving today's public debate on how much government we need.
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Table of Contents
Chapter 1 Paralysis 1
Chapter 2 Darwin's Wedge 16
Chapter 3 No Cash on the Table 30
Chapter 4 Starve the BeastBut Which One? 46
Chapter 5 Putting the Positional Consumption Beast on a Diet 64
Chapter 6 Perpetrators and Victims 84
Chapter 7 Efficiency Rules 100
Chapter 8 "It's Your Money . . ." 119
Chapter 9 Success and Luck 140
Chapter 10 The Great Trade-Off? 157
Chapter 11 Taxing Harmful Activities 172
Chapter 12 The Libertarian's Objections Reconsidered 194
Afterword to the Paperback Edition 217
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Shows good insight on some aspects of the economy, but his advocating a progressive consumption tax is a pathetically bad idea. As a tax specialist, who has prepared roughly 10,000 tax returns, I could think of myriad ways in which to thwart such a tax, so the tax burden would inevitably fall hardest on those who were less fortunate.
Frank challenges many of the age old assumptions about economics and has some very interesting ideas that will make you rethink yours, but turns into a bit of an anti-libertarian rant towards the end
I just listended to a great podcast on this book between Bob Frank and Russ Roberts (EconTalk). B&N isn't allowing me to include a link, but it is an easy web search. For full disclosure, I had Professor Frank in graduate business school. While I disagreeing with Professor Frank often, I believe his discussion on this book is refreshingly new. If the book is half as good as his podcast with Russ Roberts (link above), then I will be pleased. I will write another
Philosopher Adam Smith himself was skeptical about the real-world results of his “invisible hand,” but you’d never know it by the way modern-day free market fundamentalists try to push every regulation out of the way. As Cornell economist Robert H. Frank notes in his assault on the ideological force field that has blocked much US government action, naturalist Charles Darwin identified the problem: Evolutionary incentives benefit individuals, not groups. Frank uses that insight to argue that government must abridge some personal gains for the greater good. Frank is an economics professor, and his book sometimes falls into a challenging didacticism. But he writes with admirable clarity and verve, and – while his prediction that the world will one day recognize Darwin as the father of economics is perhaps a reach – he has done nothing less than provide a fresh intellectual foundation for progressivism. While always politically neutral, getAbstract recommends Frank’s treatise to lawmakers, economists, historians and civic-minded professionals who are concerned with the large questions society must tackle.