Back in 2007, we had a lively debate around a series of excerpts that Cornell economist Robert Frank contributed to the Freakonomics blog. We're hoping an excerpt from his latest book, The Darwin Economy: Liberty, Competition, and the Common Good, will spawn a similar conversation.
In it, Frank makes a rather bold prediction: within the next century, Charles Darwin, the naturalist, will unseat Adam Smith as the intellectual founder of economics. Frank believes Darwin's insights into the nature of competition describe our current economic reality far better than Smith's invisible hand. Frank argues that we live in a world where competition doesn't channel self-interest for the common good, but rather into unbridled "arms races" where relative position is pursued above all else: who has the biggest bank? The biggest house? These races rarely benefit group interests. In fact, Frank argues, they have done enormous harm to our economy and provided no lasting advantages or benefits, since gains tend to be relative and offsetting.
One session at the recent AEA meetings addressed "popular economics," with a panel including Diane Coyle, Robert Frank, Steve Levitt, and Robert Shiller. (Shiller wrote a bit about it on Slate.) Many interesting things were said. To me, the most interesting was that Frank is writing a book arguing that Charles Darwin, more so than Adam Smith, is the true forefather of modern economics. (He has already written a Times column on the topic.)
Sunday's New York Times reported on attempts by the Texas Board of Education to rewrite the high school curriculum in accordance with its conservative values. So I find the raw ideological force exerted by these "educators" to be both striking and dispiriting.
In a new paper, Gavin Kennedy argues that Smith actually had no invisible-hand theory, pointing out that the phrase appears only three times in Smith's writings. One scholar believes that Smith's use of the phrase was a "mildly ironic joke."