Timothy Taylor's Instant Economist
Tyler Cowen wrote that it is
too elementary for most MR readers but it is well executed and would make a good gift for anyone needing an introduction to economic reasoning.
1. The price is very attractive. I saw it on Amazon in paperback for under $11.
2. I have a specific purpose in mind for the book. I want something that students who sign up for my AP economics class can read over the summer to give them background in economics terminology. I believe that it suits this purpose, although I will recommend only selected chapters. That was not the purpose for which the book was designed, but considering point (1) I think it will do.
3. I think that Timothy Taylor’s comparative advantage is blogging. That is, I am more impressed by his blog than by the book. I mean that as praise for his blog, not criticism of the book.
4. Taylor is a hard-core two-handed economist. He makes the case for government intervention and the case for skepticism about government intervention. His case against government rests on the principal-agent problem. That is, government as agent may not serve the public as principal. Thus, he brings in Public Choice.
5. However, to my taste, he does not make the case for skepticism as well as he might. In his earlier chapter on markets, he invokes “I, pencil” and the ability of markets to process information. In the chapters on government, he does not circle back and talk about the knowledge problem or the socialist calculation problem.
6. More importantly, Taylor does not stress two factors that are important in shaping my skepticism. One factor is the sheer power of exit as compared to voice. The other factor is dynamic learning. Markets, by rewarding success and punishing failure, are relatively effective learning mechanisms. Government, with its much weaker accountability, is a relatively ineffective learning mechanism.
7. Finally, if I were writing this sort of book, I would make very clear the failure of the “intention heuristic” in describing government. When proponents of government intervention make their case, it is nearly always in terms of intent. “X is bad, Y would be better, and we need government intervention to get Y.” The fact that government intervention often yields Z, and Z is worse than X, is forever being overlooked.
8. Taylor’s attempt to explain mainstream macroeconomics is sincere and competent. However, as you know, I have come to view mainstream macro as a crock. Still, I would include several of the macro chapters in my summer reading assignment, because the AP macro exam is based on this crock.