Knowledge that Transforms

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. (JEL D22, K21, L11, L13, L40)

Harry J. Holzer and Sandy Baum’s recent book, Making College Work: Pathways to Success for Disadvantaged Students, provides an excellent up-to-date review of higher education. My review first summarizes its key themes: (i) who gains from college and why, (ii) mismatch and the need for more structure, (iii) problems with remediation, (iv) financial barriers, and (v) the promise of comprehensive support. I then critique the book’s proposed solutions using some of my own qualitative and quantitative data. Some recommendations are worth considering, while others are too expensive or unlikely to make a meaningful difference without addressing the underlying lack of preparedness and motivation of college students. I argue that making mandatory some existing services, such as application assistance and advice, proactive tutoring and advising, and greater career transition support, has the most immediate potential. (JEL I22, I23, I24)

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. (JEL D31, D63, N30, O15, Z13)

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. (JEL D72, H77, O52, P26, P35)

In this review article, I read a book that revolves around two papers published in 1954, one by Lionel McKenzie, and the other by Kenneth Arrow and Gérard Debreu—Till Düppe and E. Roy Weintraub’s Finding Equilibrium: Arrow, Debreu, McKenzie and the Problem of Scientific Credit (2014). Under a tripartite categorization of people, context, and credit, this book advances the claim that “by being applied, interpreted, shaped, and reshaped, [these] proofs came to symbolize a new intellectual culture in American economics and help reconstruct the body of economic knowledge” (Düppe and Weintraub 2014, p. 204). My reading leads me to contest this claim, and also to contest whether a history of economic analysis, much less a history of economic thought, can be written by taking refuge in the vernacular of ancillary discourses orthogonal to the subject matter whose history is being written, and without the disciplinary criteria that these discourses operate under. An unintended consequence of my reading is the identification of lacunae in the reception of these proofs, an underscoring of Paul A. Samuelson’s panoramic vision, and a reemphasis of the sterling contributions of David Gale, Thomas Kuhn, Hukukane Nikaido, and Hirofumi Uzawa. (JEL A14, B23, B30, C60)

This article reviews Daron Acemoglu and James Robinson’s book The Narrow Corridor. They depict a constant tussle between “society,” which wants liberty but cannot sustain order, and “state,” which maintains order but grows oppressive. I argue that the book has a huge theme and an impressive historical sweep of supportive examples, but leaves many open questions. The two conceptual categories should be unpacked to examine complex interactions within and across them, and other examples that counter the authors’ thesis should be reckoned with. However, the authors deserve congratulations for a brilliantly written and thought-provoking book that will inspire much future research. (JEL N10, O43, P51, Y30)

Counting conservatively, data show about 100 million mass atrocity-related deaths since 1900. A distinct empirical phenomenon, mass atrocities are events of enormous scale, severity, and brutality, occur in wartime and in peacetime, are geographically widespread, occur with surprising frequency, under various systems of governance, and can be long-lasting in their effects on economic and human development, wellbeing, and wealth, more so when nonfatal physical injuries and mental trauma also are considered. As such, mass atrocities are a major economic concern. Given the multidisciplinary nature of the subject matter, the pertinent conceptual, theoretical, and empirical literatures are voluminous and widely dispersed, and have not been synthesized before from an economics point of view. We address two gaps: a “mass atrocities gap” in the economics literature and an “economics gap” in mass atrocities scholarship. Our goals are, first, to survey and synthesize for economists a broad sweep of literatures on which to base further work in this field and, second, for both economists and noneconomists to learn how economic inquiry contributes to understanding the causes and conduct of mass atrocities and, possibly, to their mitigation and prevention. In drawing on standard, behavioral, identity, social network, and complex systems economics, we find that the big puzzles of the “how” and “why” of mass atrocities, and mass participation therein, are being well addressed. While new research on such topics will be valuable, work should also progress to develop improved prevention approaches. (JEL D72, D74, K38, N40, Z13)

The Human Tide: How Population Shaped the Modern World, by Paul Morland, argues for the importance of demography in both historical events and our current situation. Intended for a general audience, the book traces demographic developments from the late eighteenth century, arguing that the timing and pace of demographic change helps to explain why some countries became powerful and others did not. The author continues the story into the twentieth century, discussing the changes in age structure and internal ethno-religious balances that are consequences of demographic patterns. Many readers will find the questions and themes in The Human Tide interesting. Unfortunately, the book misrepresents some research findings and is confused about important demographic concepts. The Human Tide deals with fundamental changes in human society over the past two centuries, but for a clear account of those changes, readers will have to go elsewhere. (JEL I12, J11, J13, J15, K37, N30)

In Discrimination and Disparities, Thomas Sowell describes how economists think about the causes of disparities in socioeconomic outcomes. He cautions against government intervention to reduce disparities, noting that such interventions often have unintended consequences. In this review, I discuss the role of economic theory and empirical evidence in helping move society toward more equitable outcomes. I find far more reason to be hopeful about the role of government than Sowell does, but also argue for more experimentation and rigorous evaluation to be sure that our well-intentioned policies have their intended impacts. (JEL D63, J15, J16, J71, J78)