Finally! Economics made interesting.

Lost Foundations

By Rand McGreal

Rating: 4 out of 5 stars

My Dinner with Andre with economists.

Does anyone remember the 1981 film My Dinner With Andre? It was a surprise hit about two men talking over dinner. That was it. But it was utterly fascinating with the two men discussing slightly alternating views on life.

Rand McGreal uses a similar but ultimately fundamentally different conceit to espouse his views of economics. In this fictional essay that is presumably meant to introduce the economic theories of Richard Cantillon to the layman, McGreal is at an impasse on his book about the 18th century economist. While he is sitting in a Seattle restaurant, he is greeted by what appears to be an eccentric homeless person who confidentially has the same name as the economist. But eventually McGreal comes to believe it is the same person and they have a discussion about economics and the financial state of our modern society. Unlike My Dinner with Andre, McGreal and Cantillon are soon walking around Seattle and McGreal is taking as much delight in introducing Cantillon to 21st century America as Cantillon is having correcting McGreal interpretations of his ideas.

In the preface, McGreal warns the reader to "do not judge the book by the vehicle of communication, but the ideas you meet." Well, I'm a book reviewer, not an economist. So the quality of the communication is an essential if not over-riding part of my judgement. But McGreal need not worry for he is an excellent communicator taking ideas that may seem dry to some readers and presenting them in an entertaining way. If McGreal's goal is to popularize the theories of Cantillon, he appears to have a good start. I found this short book very easy to read despite its topic and had a few smiles along the way.

Yet it is clear that the author wishes to persuade too. The economic theories of Cantillon, and of the author's, state that wealth is a product of entrepreneurs not the government. He decries the Keynesian position that government spending and regulation of interest rates will ever produce productivity and relieve us from our financial dilemma. There's a lot more but I think I presented a simple summary well enough. I think it is safe to say the author takes a relatively Libertarian stance on the role of government in free enterprise.

As I said, I'm not an economist. My university background was in Sociology which I would say has an uncomfortable relationship with economics. Most social scientists feel that Economists spend to much attention to abstract numbers rather than to the twists and turns of human nature and social patterns. I'm also sure most economists would disagree with this. Back in the late 70s, a finance analyst friend who was quite knowledgeable in economics told me I knew nothing about the field. He was probably right. But since he also told me that simultaneous high inflation and high unemployment was an impossibility a few months before the nation became entrenched in the simultaneous rise in inflation and unemployment made me wonder about his own knowledge. Of course, I do not hold that against the author. I'm just stating I take economic truths with a grain of salt just as I do other soft sciences including sociology and psychology. I would wonder aloud to Mr McGreal and ghostly Cantillon whether their viewpoint of entrepreneurship, which makes sense to me up to a certain point, still hold when those bastions of free enterprise become multi-national corporations that operate as a government unto themselves. Can it be said that massive corporations primarily produce wealth through products rather than having the only goal of increasing wreath (meaning money in this case) for their constituents in any way, shape or form?

But I digress a bit and I do reveal my own bias which is perfectly fine. The main point is that McGreal writes a fully delightful romp that expresses his views with clarity and insight without being dull. Not only that, but he also gives this admittedly Keynes (and Krugman) biased layman a lot to think about. If you have the slightest interest in economics and the financial state of the world, this is essential reading. Even if you don't, it is worth a try. The ending leaves open the possibility of other dialogues with historical figures in economics and I welcome such endeavors.

One more thing I learned. When in Seattle, hunt down the first Starbucks and look for those Minimus/Maximus food trucks!

Method acquired:  Goodreads Firstreads