Economist of the Day

Paul Collier

Born: April 23^rd, 1949

Died: N.A.

Summary: An English Economist. He specializes in political and economic development in poor nations.  He is a professor of Economics and Public Policy at the University of Oxford. From 1998 to 2003 he was the director of the Development Research Group of the World Bank. His book The Plundered Planet gives three equations about what can happen in a country based on the presence or lack of three variables. The first equation is Nature minus Technology plus Regulation equals Starvation. The second equation is Nature plus Technology minus Regulation equals Plunder. The third and final equation is Nature plus Technology Plus Regulation equals Prosperity. The book also attempts to find a balance between complete disregard for nature and nothing but regard for nature. In his book The Bottom Billion, he tries to explain why certain countries fail to prosper even when they are give large amounts of aid from developed nations.

Notable Works: The Plundered Planet, The Bottom Billion, Wars, Guns and Votes: Democracy in Dangerous Places, Exodus: How Migration is Changing Our World

Economist of the Day

Nicholas Stern

Born: April 22^nd, 1946

Died: N.A.

Summary: An English Economist and Academic. He specialized in political and developmental economics. In the past, he has given lectures at Oxford University from 1970 to 1977. From 1978 to 1987 Stern taught economics at Warwick University.  Later, from 1987 to 1993, he taught at the London School of Economics. In 1993, Stern served as Chief Economist of the European Bank for Reconstruction and Development. During his time at the bank, he conducted a large amount of research on economic development and the Green Revolution in India. He was the Chief Economist of the World Bank from 2000 to 2003. In 2007 he became the first I. G. Patel Chair of the London School of Economics. He was also made chair of the Grantham Research Institute on Climate Change and the Environment in 2008.

Notable Works: The Economics of Climate Change, The Theory for Taxation in the Developing World, The Global Deal: Climate Change and the Creation of a New Era of Progress and Prosperity

Economist of the Day

Douglas Elmendorf

Born: April 16^th, 1962

Died: N.A.

Summary: An American Economist and Politician. He received his bachelor’s degree in economics from Princeton University, and later received his doctorate in economics from Harvard University. In 1993 he began working at the Congressional Budget Office. In 1994 he was moved to the Federal Reserve Board. By 1998 he was a member of the Council of Economic Advisors. In 1999, he began working at the United States Treasury Department under Treasury Secretary George Lawrence Summers. In 2002, Elmendorf returned to the Fed as a senior economist, and lead a team of 30 economists to predict interest rates and labor market conditions. In 2007, he left the public sector to work for the Brookings Institution, an economic think tank. He also directed the Hamilton Project, an economic policy forum that focused on reducing the trade deficit and increasing free trade. Most recently, in 2009, he was appointed Director of the Congressional Budget Office, and his term only ended in 2015. 

Notable Works: Brookings Papers on Economic Activity: Spring 2008, Should America save for its old age? Population Aging, National Saving, and Fiscal Policy, The Effect of Interest Rate Changes on Household Savings and Consumption

Economist of the Day

Yvan Loubier

Born: April 10^th, 1959

Died: N.A.

Summary: A Canadian Politician and Economist. He is one of the founders of the Bloc Québécois, a federalist political party that strives to represent Quebec’s interests in the Canadian parliament, and establish Quebec as an independent nation. He served as a representative in the Canadian parliament with the Bloc Québécois from 1994 to 2007. While in parliament, he served as chair of Canada’s Subcommittee on Fiscal Imbalance. He has worked towards the development of the Romaine River Hydroelectric power plant. He has also worked toward increased opportunity and better living conditions for Canada’s indigenous peoples. Prior to his career as a politician, he served as a consultant on trade and economic policy. He currently works at “National”, a public relations and counseling firm. He advises others on energy, mining, forestry, and food processing. He has written frequently for newspapers La Presse and Le Soleil.

Notable Works: La détermination des assurances collectives au Canada (The Determination of Canadian Group Insurance) Structure and economic importance of the Canadian food and beverage manufacturing sector: Highlights from 1970 to 1981

Economist of the Day

John Hicks

Born: April 8^th, 1904

Died: May 20^th, 1989

Summary: An English Economist. He studied Philosophy, Politics, and Economics at Balliol College, Oxford. He formalized the theories put forth by John Maynard Keynes in The General Theory of Interest, Employment, and Money. He also put forth the elasticity of substitution theory, which states that labor saving techniques do not necessarily reduce the labor force’s share of national income. He also co-created the Kaldor-Hicks efficiency with Nicholas Kaldor. The theory states that economic policy should only be pursued if it helps more than it hurts and those helped can somehow compensate those hurt completely and still be better off. In his book Value and Capital, he contributed to general equilibrium theory, which differs from partial equilibrium, since general equilibrium is about the aggregate, not individual markets. In said book, he wrote that many of the assumptions made about value theory could be reached without measuring the utility of a good or service. He also made contributions to consumer demand theory. 

Notable Works: Value and Capital, The Theory of Wages, The Social Framework: An Introduction to Economics, Capital and Growth, A Contribution to the Theory of the Trade Cycle, A Revision of Demand Theory

Economist of the Day

Klaus Schwab

Born: March 30^th, 1938

Died: N.A.

Summary: A German economist and engineer. He received his degree in economics from the University of Fribourg. In 1971 he founded the World Economic Forum, and served as its chair. As chair, he organized the Forum to settle disputes between several nations, particularly between European and far eastern ones. In 1998 he and his wife founded the Schwab Foundation for Social Entrepreneurship. He has written that because technology is advancing at such a rapid pace, there will no longer be any need for capitalism (because technological advances will have created a post-scarcity society). He has also argued that until a post-scarcity society is achieved, the most innovative and imaginative people will be the driving forces behind economic growth, rather than whoever controls the most natural resources or capital. He created the Global Shapers Community, an organization meant to develop the leadership skills of 20 to 30 year olds through public service. He has argued that increasing global debt has caused the global economy to grow at a decreased rate. He believes that global economies will become less integrated in the future due to interests of various governments deviating more and more from each other. 

Notable Works: Overcoming Indifference: 10 Key Challenges in Today’s Changing World, The Asian Financial Crisis: Lessons for a Resilient Asia, The Power of Unreasonable People: How Social Entrepreneurs Create Markets That Change the World

Review: Economics in One Lesson

By Theo Vancraeynest

         Henry Hazlitt’s Economics in One Lesson is based off of a simple principle that could be applied to all fields of life as well as economics. The principle, stated in part 1, is as follows: “The art of economics consists in looking not merely at the immediate, but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups” (17). 

After opening with his principle, Hazlitt then goes on use it to criticize the shortsightedness of many economic policies most people vehemently support. Public works, bailouts, inflation, and tariffs, among other things, are logically explained to be far less beneficial than they seem to be on the surface. In each explanation he provides, Hazlitt seems to point out that more often than not, government economic policy does not better everyone. It better some, and because others do not see how they will eventually be impacted by it, they think it has no effect on them. In reality, it is quite harmful to some, but beneficial to others. Hazlitt himself writes in Chapter 25 that economics is naturally beneficial to some, but harmful to others. “If progress were completely even around the circle, this antagonism between the interests of the whole community and of the specialized group would not, if it were noticed at all present any serious problem” (198) However, not every sector of the circle of the economy benefits equally from certain events. The meat industry will benefit more from better refrigeration techniques than the sports industry, and the medical industry will benefit more from a new drug than the oil industry. Because people of one group see people of another group prospering, they think “how are they doing well and I’m not. I should have some form of protection, I work hard.” And so the government steps in to appease those who do not prosper. However, as Hazlitt said, prosperity is rarely distributed equally among everyone all the time. Some years will be good for one industry, some years will be good for another. But due to the exchange of wealth brought about by a capitalist economy, when one industry prospers by producing more wealth, all of society is made better off because of the increased wealth.

Another praiseworthy component of the book was how easy it was to understand. It gave hypothetical and real life examples that were well explained and easy to follow, and so it gets its message across with economic efficiency (lame pun).

However, there is one aspect of the book that I find myself critical of, and others should too for the sake of skepticism. In Chapter 20 “Do Unions Really Understand Wages?” Hazlitt writes about how the workweek was reduced from 70 hours to 60 hours, then from 60 hours to 48 hours, 48 to 44, and most recently, 44 to our current 40-hour workweek. He mentions that concerns such as health and leisure as the driving forces behind these workweek reductions, but he does not cite any information as to why the 70-to-60 reduction was about health and welfare, but the 60-to-48 reduction was about health and leisure. I would like to know what studies were conducted to determine the point at which reducing labor becomes for leisure rather than for health. I do not doubt that such studies exist, or that they are legitimate and well-conducted, I just wish I knew where to find them.

Now, Hazlitt uses very few citations in his book, but that’s because most of the information is conceptual based, and the real life examples he uses are either cited, or use enough descriptive terms that the reader can easily google them to verify them. His comment about workweek hours, however, is the exception.

Still, all things considered, Economics in One Lesson is a great book, and I highly recommend it to anyone with an interest in either economics or politics. I rate this book four stars out of five.

Page numbers for the quotations taken from the New Edition of the book, published by Three Rivers Press.