Knowledge that Transforms

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The categories listed below are used to classify books, book reviews, journal articles, and dissertations indexed in JEL, JEL on CD, EconLit. New changes to the classification system appear as soon as possible on www.econlit.org . The JEL classification system may be used freely for scholarly purposes. We suggest the following format: “JEL: A10, B10, etc.”

As Generation X’s (born in the 1960s and 1970s) child bearing years draw to a close, its parenting practices are due for assessment, the topic of the book under review. The book organizes its discussion around Diana Baumrind’s three parenting styles: authoritarian, permissive, and authoritative. It chronicles the drift toward the two latter and argues that income inequality determines which one of the two will be popular. When inequality is low, less is at stake and the parenting style can be more relaxed. By contrast, high inequality pushes parents toward the achievement- oriented authoritative style. More generally, the book argues, cultural differences in parenting styles can be understood as the outcome of altruistic parents’ efforts to prepare their children for adulthood, a useful perspective when parental rights are limited, long the case in the West.

Taylor (2019) details heterogeneity in the effects of the National Industrial Recovery Act (NIRA) across industries and across time. Through first the President’s Reemployment Act (PRA) and then industry-specific “codes of fair competition,” the NIRA raised wages and restricted working hours. In some—but far from all—cases industries also used a NIRA code to collude, raising prices and restricting output. The effect of the NIRA peaked in fall 1933 and winter 1934; thereafter, compliance declined. I review the intellectual history of the NIRA, the implementation of the PRA and the NIRA codes, and Taylor’s econometric evidence on their effects. I end with a discussion of the implications of Taylor’s book for understanding the effect of the NIRA on US recovery from the Great Depression.

This essay reviews Escape from Rome: The Failure of Empire and the Road to Prosperity by Walter Scheidel. It examines the argument that Europe’s persistent fragmentation following the collapse of the Roman Empire is responsible for the origins of the modern world. First, I consider Scheidel’s argument that the rise of Rome at the end of the first millennium BCE was relatively overdetermined, but that once Rome fell, it was highly unlikely for any subsequent empire to dominate Europe. Second, I examine the institutional consequences of this divergence in state building. Finally, I reflect on the role of counterfactuals in history.

This essay reviews Jonathan Baker’s important book, The Antitrust Paradigm: Restoring a Competitive Economy, to frame the debate over appropriate antitrust policy and enforcement. Baker argues that competition is inadequate in many US markets and that antitrust could and should be strengthened to restore competition and benefit consumers. Baker presents an unrelenting critique of what he believes is the University of Chicago’s harmful influence on what was once an effective antitrust policy. I compress Baker’s book into four issues that economists can debate and I offer an alternative view that is more supportive of the current state of industry competition, the efficacy of market forces, and the case for limited antitrust intervention.

Archeologists are actively working to quantitatively measure income and wealth inequality in ancient history based on available data, some of them being quite sophisticated. Timothy A. Kohler and Michael E. Smith’s Ten Thousand Years of Inequality: The Archaeology of Wealth Differences presents existing measurement efforts and insightful discussions of the challenges faced, on all continents except Oceania. These first exercises should help us over time understand better the evolution of inequality in ancient history and its determinants. Understanding better the effects of differences in institutions in the ancient past should be a crucial next step.

Anders Åslund provides a comprehensive description of the main political and economic events of Vladimir Putin’s 20 years at the helm of the country. In politics, Åslund shows how Putin skillfully maneuvered to destroy democracy in Russia. I argue that the “cultural backlash” by older generations played perhaps an even more important role. I also show that the young generations hold rather liberal values, thus providing hope for the future. In economics, Åslund focuses on large state corporations, assets of Putin’s cronies, and macroeconomic policies, with only general statements about the country’s institutional weakness. I complement Åslund’s analysis by a more detailed examination of the impact of institutions and briefly survey fiscal federalism and informal economic activities—issues without which the workings of the Russian economy are hard to understand.