‘A Little History of Economics’ Provides a Charming Overview of the Dismal Science

Niall Kishtainy, writing for a general audience, provides a breezy stroll through economic thought, from Plato to Thomas Piketty.

If economics is truly the dismal science, then you might conclude that the history of economics must be a positively depressing topic for a book. Fortunately, such is not the case with Niall Kishtainy’s A Little History of Economics, a breezy and entertaining stroll through the subject by means of 40 brief, self-contained chapters that provide a chronological overview of some of the central ideas of economics (including both ideas embraced by mainstream economists today, and ideas that have largely been discarded).

Kishtainy begins with Plato and Aristotle, noting how the former distrusted wealth (his philosopher kings were to share everything in common, including their children) while the latter embraced the concept of using money as a way to evaluate the value of goods (thus obviating the need for barter every time you want something). He then jumps ahead about six centuries to visit the ideas of St. Augustine of Hippo, then makes a similar leap forward to examine the ideas of Saint Thomas Aquinas regarding moneylending — which, strange as it may sound today, were based on the idea that money was “barren” and hence charging interest on a loan was “unnatural”.

One contrast throughout these chapters is that of making up economic principles based on pre-existing notions of how things “should” be, often based on some religious or philosophic point of view, and describing formulating models and principles based on how economics works in actual practice. Examples of the former include the medieval Christian scorn of moneylending and the mercantile belief that the purpose of a national economy was to accumulate as much gold as possible (both zombie ideas that will just not stay buried, no matter how strong the evidence is against them).

In contrast, Kishtainy identifies the French intellectuals François Quesnay and the Marquis de Mirabeau as the first to create an economic model based on how an actual economy worked; unfortunately, their 1760 publication The Theory of Taxation, which suggested that the national economy would function better if (the horror!) aristocrats as well as peasants paid taxes, so angered Louis XV that he has de Mirabeau thrown in jail.

Kishtainy makes no attempt to provide a comprehensive history, instead emphasizing European ideas from the Industrial Revolution to the present day (by chapter seven, which discusses David Ricardo’s theory of comparative advantage, he has already reached the 19th century). He takes a broad view of economics, including such obvious economics notables as Karl Marx and John Maynard Keynes alongside thinkers such as Thorsten Veblen and Daniel Kahneman, whose contributions draw on additional fields such as sociology and psychology. While most of the economists featured are white and male, Kishtainy also devotes a chapter to male biases in economics, from the blindness to how resources are distributed in many societies (favoring boys over girls and men over women) to the lack of interest in assigning value to the so-called invisible labor (such as raising children) performed primarily by women.

Kishtainy’s final chapter, “Why Be an Economist?” offers a defense of the profession and an argument for its importance. In his view, economists are not simply those who try to predict what financial markets will do (or who appear on television after the fact, giving their explanation of what just happened), nor are they eggheads who make up clever theories that seldom work out in practice. Rather, at least some economists are sincere individuals who struggle with important problems and try to make people’s lives better. To illustrate this point, he discusses economic approaches to the problem of global warming that consider carbon emissions to be a negative externality that could be regulated through taxation or a permits trading system.

Kishtainy is a professional economist (he has served as an economic policy advisor to the UK government and to the United Nations Economic Commission for Africa) but this book’s target audience is the interested general reader, not the specialist. He writes in an engaging style, with a minimum of specialist jargon and a maximum of easily understood examples, and is something of an evangelist for economics. In fact, he makes a strong case that everyone should understand the principles of economics, because economic decisions play a huge role in our daily lives (and, I might add, such knowledge is a good defense against some of the nonsense put forth by our politicians).

Kishtainy has an eye for entertaining historical details (for example, utopian reformer Robert Owen developed a grading system using colored blocks to spur workers to better performance, and it seems to have worked) that underline the humanity of each of his subjects. Such stories also encourage the reader to keep reading, because who wouldn’t want to read about an economist (Owen again) who became a spiritualist after his utopian schemes failed? Each chapter is introduced with a woodblock print by illustrator Hazel Partridge, a charming touch that helps quiet the nerves of readers who begin reading with the notion that economics is too complex or numerical to be understood by ordinary humans.

RATING 8 / 10