Reviewed - Living Economics: Yesterday, Today and Tomorrow

The title and cover art for Peter Boettke's latest book Living Economics: Yesterday, Today and Tomorrow are no doubt symbolic of economic theory as a field of study, and also the history of economic thought as an intellectual tradition. Like the tree on the cover, economic theory is itself like a living entity or tree. It is complex and frequently changing, always adapting to address the unique episodes of social history. But economics is also firmly rooted in a stable foundation of core theoretical substance: subjectivism, the rational choice framework and spontaneous order theory.

The contents of the book enliven this symbolism. Boettke presents a unique and insightful perspective on the history of economic thought. The Classical School sowed the roots of economic theory. Writers such as Adam Smith asked plainly, ‘how can society function harmoniously without a central designer?’ Given all the world's complex diversity, where does social order stem from and how does it operate? In result, like the tree trunk, property rights, prices, and profits and losses, all serve as a strong and solid foundation for the branches of social order to grow there from.

In the aftermath of the classical period, the tree of economic theory grew stronger in some areas but it was also pruned, redirected and, dare one even say, abused in others. Amidst the twentieth century, many theories most fashionable in the mainstream economics profession emphasised supposed weaknesses within the rooted systems of market economics. Trees may grow from roots to branches, but they must also be guided and directed by marginal regulation, complete central planning, or some form of intermediate interventions. So say many mainstream economics perspectives.

Here Boettke's symbolic metaphor rings true again. Just as it is hubris for individuals or groups of men to expect full control over a mighty oak tree, so it is hubris for teams of ‘experts’ to submit the economy to their will.

Boettke argues that greater attention should be given to the mainline roots and trunk of economic science. Market economies comprised of strongly enforced private property rights, stable monetary regimes and freely adjusting market prices tend to coordinate scarce human and physical resources across time and space in proportionate quantities and qualities unmatched by any alternative institutional arrangement known to human kind. 

I disagree with Boettke on two key characteristics of his book. Firstly, that his text is purely useful to the motivated undergraduate considering entering graduate school and a career in the field. Any professional economist would benefit from reading the book. And his writing is clear enough that his essays are approachable to the ‘econo-novice’.

Secondly, I think Boettke’s symbolism linking the study of economics to a living tree should be expanded. Reading the biographical sections dedicated to key thinkers (Hans Sennholz, Murray Rothbard, Gordon Tullock, Israel Kirzner, Elinor Ostrom, James Buchanan and others) and knowing Boettke’s own legacy of guiding original research, one can recognise that the economic way of thinking is not only a tool to be used, put away and redeployed at leisure. The ideas of Living Economics can, and arguably should, be taken as more than mere symbolism. To truly know economics is itself a lifestyle.

In the near and distant future the prominence of mainline economic reasoning will be the result of the efforts of those eager and interested to investigate its history, research its operations and promote its insights. I imagine that this group of supporters will be ‘Living Economists’.

This book review was originally published in EA magazine.

One of the best ‘living economics’ insights comes from Adam Smith:

‘The uniform, constant, and uninterrupted effort of every man to better his condition, the principle from which publick and national, as well as private opulence is originally derived, is frequently powerful enough to maintain the natural progress of things toward improvement, in spite both of the extravagance of government, and of the greatest errors of administration. Like the unknown principle of animal life, it frequently restores health and vigour to the constitution, in spite, not only of the disease, but of the absurd prescriptions of the doctor (Wealth of Nations, II.iii.31).’

I read it very soon after it was released, good read and some great insights
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