Becker and Posner's Uncommon Sense

The popular Becker-Posner blog has been turned into an excellent book entitled Uncommon Sense.

For anyone who wants a quick and easy crash course on Chicago economics-style thinking, this book is as good as it gets. It collects a few years’ worth of their weekly blog posts, adding reflections the two thinkers have had since the original posts, as well as an introduction that nicely describes the basic principles of their worldview.

If you are cheap, you can get the blog posts for free; if you are lazy, the book is an easy way to quickly access the material. (I guess the fact that I only sometimes read their blog posts but I read nearly the whole book in one sitting means that I am lazy!)

One of their beliefs (which I share) is that economics can be applied to any topic. They demonstrate that point, writing about everything from polygamy (Posner seems to be in favor of it; Becker is on the fence) to the fat tax (both against) to whether rising inequality is a bad thing (both say no).

The only drawback to the Becker-Posner collaboration, in my mind, is that more often than not, they agree on the answers to the questions they pose. The most interesting dialogues occur when they find themselves on opposite sides of the fence.

I wonder if in the future they couldn’t occasionally bring in a smart outsider with a different worldview to spice up the debates?


frankenduf

sigh- another plug for "chicago economics style thinking"- as if any one of the millions currently suffering under 'free' market abuse should be subjected to- here's a note to the 'thinkers': think about justice- then you'll realize why rising inequality is a bad thing

Owen

Since when did economics become synonymous with incentives.

Josh

What if I am cheap AND lazy?

Ben D

"One of their beliefs (which I share) is that economics can be applied to any topic."

At what point did economics co-opt the scientific method?

David Gutting

Of course these guys don't think rising inequality is a bad thing. Their economic view promotes. Their very livelihood depends on it.

Hey, the Lords of the Manor didn't think rising feudalism was a bad thing.

Dan

“One of their beliefs (which I share) is that economics can be applied to any topic.”

This is why we have economists doing everything from junk psychology ("behavioral" economics) to junk philosophy (the "moral" philosophy of taxation, for instance). Given the time, I probably could find examples in every field from anthropology to zoology.

It would be just splendid if economists wouldn't mind admitting that economics is just one of many disciplines and that no, they aren't necessarily the primary experts on everything.

adam

Josh - request it from the library.

myron

If you are looking for a serious critique of the chicago school, I'd recommend you read "Shock Doctrine" by Naomi Klein. If after reading that you still think that chicago school doctrine is a positive contribution to society, have fun at your next Ayn Rand discussion group.

Gatsby

David Gutting.

Can you explain how Becker and Posner's livelihood depend on inequality?

Thanks,
Gatsby

Bob Cawley

You need an explanation of Chicago economics-style thinking? (Did that really pass the oxymoron filter?)

1. Assume market forces are immutable forces of nature (like physics instead of social sciences)

2. Assume patently ridiculous conditions (like perfect information, rational behavior, inability of cartels or individual participants to influence markets)

3. Assume externalities (like social costs or benefits) are irrelevant

4. Insist this highly abstract model reflects the real world even though it bears no more relation to reality than anime.

Now you don't have to read the book or the blog (Josh)!

Joe Smith

How much of that increase in inequality is the result of Wall Street bankers making huge assymmetric bets: heads they get rich, lose and the poor sod down the street loses his pension.

The rich should consider whether they are more afraid of higher taxes or being murdered in their beds?

ray bans on my face

Income inequality doesn't really have much to do with justice, unless working harder and striving for a higher salary is illegal. The lower class can see little increases in salary while the upper class sees larger relative increases in salary and it is still considered income inequality. Sure, there are some social injustices committed by the upper class at the expense of the lower class, but that is a result of human nature-not income inequality.

Economics can be applied to most any topic, because it is inherent in most topics. Economics also studies incentives and their impacts. How do you think the U.S. Tax Code was developed?

It seems that all of the other bloggers have little or no formal education in economics, because the comments they have provided don't exhibit it whatsoever. Pick up a microeconomics theory textbook and then get back to Freakonomics.

owinok

Levitt, how fast can you read? The whole book in a sitting? That's something else, not laziness.

Pawel

Communism practised 'equality' for almost 80 years in Soviet Union and 50 years around the world - with disastrous consequences.

All people are equal - when it comes to their dignity and their value as human beings. But one can't translate that into economic equality, without de facto impeding the human dignity and freedom of self-expression (also throug economic activities). And naturally, as people have different skills, education, attitude to work etc. - this freedom will bring ECONOMIC inequality. One could even argue that with rising degree of freedom, the economic inequality will raise.

Last but not least - there can be rising inequality and still people in lowest income group might see upgrade of their income, while economic equality (as communism proved empirically) in the long term means: 'equally for everyone=(virtually) nothing for everyone'. I am not sure that's better or more just.

Read more...

hunter

rising inequality is a good thing as long as pay is for performance.

who ever complained that Kobe Bryant, the star, is paid more than 30 times that of Didier Mbenga, the 12th man. as long as Kobe brings in the goods (and the 2008 championship), i can't imagine a fan who is complaining about this type of income inequality.

the inequality that is bad is the case of Jermaine O'Neal who is in the top 5 earners in the NBA while his performance has been dismal. rather the high income was due to negotiation, unrealized potential, incorrect valuations, etc... now the inequality resulting from this type of pay is abhorrent.

hunter

another drawback of the Becker-Posner blog is the numerous inappropriate trackbacks and comments from porn/gambling/spam sites (e.g. see the post on income inequality)

or maybe that is simply an illustrated example of a failed market solution to the problem of moderating blogs?

George

"Last but not least - there can be rising inequality and still people in lowest income group might see upgrade of their income"

The operative word in that phrase being 'might.'

Most of us have been on the losing side of that might for a while now since wages have completely stagnated and raises are funneled into health care premium increases. If the rising tide were truly lifting all boats, people wouldn't be so angry. Instead, it's drowning a lot of people

Greg

George

Yet the cost of living has decreased and the quaility of life has increased. I think it's safe to say that the majority of people have gained utility in the long run.

Ted

"Yet the cost of living has decreased and the quaility of life has increased. I think it's safe to say that the majority of people have gained utility in the long run. - Greg"

I don't think so. That is a highly subjective statement which can only be partially measured in economic terms.

To me, emphasizing income inequality rather misses the point. Income inequality is rising because the labor market is not rewarding people fairly. Unfairness is the operative concept here. The work of our teachers, garbage collectors,etc., is vastly more important to our collective well being than is the work of Kobi B. They are unfairly rewarded for their efforts as is Mr. B.

In my opinion the solution is a super-duper highly progressive tax that would help redistribute wealth in a fair manner.

I'm not a communist or socialist last time I checked. Let me take another peek... Nope, still just a working stiff.

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Guy

It's easy to say that rising income inequality isn't a problem when you're not someone who barely survives on poverty-level income. Try living on no more than poverty-level income for a month and see how you feel about it then.