Binyamin Appelbaum

Binyamin Appelbaum produces a stunning overview of the changes in the role and prestige of economists from the 1960s to the present. I majored in economics and think myself fairly conversant, but I was not fully aware of the extent to which economic language and methods are relatively new to society; a shift amounting to nothing less than a revolution. Appelbaum describes how in the 1950s, there were no economists working in the Federal Reserve's leadership, instead being treated there and elsewhere as primarily data analysts. Over the course of the book, he looks at how in fields from taxation and currency valuation, to antitrust and corporate regulation, economists propounded a particular laissez-faire approach to policymaking with often devastating consequences.

What particularly struck me is the naked ideology described in the narrative. Milton Friedman shows up repeatedly, bringing a libertarian approach to topics from the draft to tax cuts but his motivation is not evidence, but belief in "freedom". Alan Greenspan is the chief proponent of zero regulation in the financial sector, despite mounting abuses and failures. The narrative highlights the extent to which economists were declaring truths that they did not have evidence for; an unearned confidence that remains today. I don't think Appelbaum believes, nor do I, that the pre-economic ways of thinking were ideal. Tools such as cost-benefit analysis or principles of quantifying problems are clearly beneficial. But for all the economic discussion of positive vs. normative analysis, the ideology clearly shaped (and shapes) the kinds of analyses being proposed, and excludes factors that a society might wish to include. It's particularly shocking when confronted with the human costs of this thinking; in the gutted Rust Belt, in Pinochet's Chile. Even more so when you recognize how deep this neoliberal ideology rooted itself, since most of the relevant actors knew these costs and forged ahead anyway.

I strongly recommend this book; it's an invaluable reminder of the relative newness of certain "facts" that neoliberalism has tended to portray as such. For economists, lauded by society, it's a suggestion to preserve some humility. In an era of rising populism and criticisms of capitalism it remains to be seen whether we can build something better, but I hope this book will give us some of the context to get us there.… (altro)

The Economist's Hour: The Rise of a Discipline, the Failures of Globalization, and the Road to Nationalism by Binyamin Appelbaum is the study of post World War II economics centered on the United States. Appelbaum is the lead writer on business and economics for the Editorial Board of The New York Times. He joined the board in March 2019. He was previously a Washington correspondent for the Times, covering the Federal Reserve and other aspects of economic policy.

For most of the history of the United States, economists had little to do with the practical aspects of economic policy. Hidden away in basements and never in positions of power, in fact, in 1972 George Schultz became the first economist to serve as the Secretary of the Treasury. The recovery of Europe and Japan (and Asia in general) from World War II ended the US reign as the global producer and with it an economic turndown. Economic battles began to emerge as Keynesian policy began to show cracks and fail.

Appelbaum examines several areas of the economy or economic issues in this book. One of the first issues addressed in this book is the draft. Today the all volunteer military is easily seen as superior to conscription. Life in the military is hard enough with people who want to be there, let alone people put there against their will. The question becomes, is it more cost effective? That became the struggle.

The cost of human life is another issue for economists. There are the insurance aspects of that cost but it also plays a role in regulation. For example, if a safety feature on a car can save a certain amount of lives and costs a certain amount of dollars where does the cost in saved lives exceed the cost of the feature. Adding $50 to a cost of a car to save 1000 lives a year is easily worth it. Adding $1,000 to the cost of a car to save five lives a year would probably not be worth the cost.

The Economist's Hour gives the reader an easy to understand study of contemporary economics and its history. It is not a Friedman versus Marx book, but Friedman versus Keynes. It is a practical application of (capitalist) economics and history. -- from interest rates to antitrust. Appelbaum demonstrates to the reader the reach of economics in our everyday life and recent past.… (altro)