Book Review of Free Lunch, Easily Digestible Economics
Authored by David Smith
Book Introduction
Free Lunch, Easily Digestible Economics by David Smith is an attempt on the part of the author to help people, especially non-economists, come to terms with the rather despised subject of economics. It is despised not because of what it deals with – but because of the clarity, or the absence of it, that most of the texts on economics provide. Something that is an integral part in the life of the common man has to be understood properly by the hoi-polloi, but unfortunately that has not been the case with most of the books on the subject so far. Free Lunch has been a welcome change on that front – and as the author claims, it does not seek to replace the gargantuan manuals full of mathematical equations and diagrams; but it does intend to make the life of a person easier with real life examples and analogies associated with several economic instruments and terminologies.
Book Layout
The author has managed to draw a wider section of audience to the book by making it a light-read, interspersed with a generous dose of humor and wit. The title of the book builds up the interest of the reader – many of us have heard the phrase “There is no such thing as a free lunch”. The book tries to find out why such a phrase is apt for the society which we live in. The book layout – in tandem with the title – has been set out as a meal plan with appetizers, a set of main courses, desserts and coffee. Many well known economists such as Adam Smith, Karl Marx, and John Maynard Keynes don the apparel of guest speakers and their contributions to economics have been examined in the book. Works and beliefs of some lesser known economists such as Robert Malthus, David Ricardo, Milton Friedman and John Stuart Mill have also been discussed by the author. The hand-book is complete with a glossary of key words/phrases mentioned at the end; and for the benefit of the interested reader, Smith goes on to mention economic websites worth visiting and a few recommended books on the subject.
Book Content
The book starts with the general definition for economics and a discussion on housing prices with an analogy with potatoes. The discussion moves on to illustrate how the economic behavior of people affects the functionality of the financial system. Adam Smith, the father of modern economics, is then introduced as the guest speaker and his ideologies in The Wealth of Nations are discussed briefly. The concept of “the invisible hand” is described at length and so are issues like division of labour and economic freedom.
The book then talks about the concept of macro-economics, economics as a whole rather than about individual parts of the economic system. Value added tax (VAT) and saving tendency of people is discussed after that. The content drifts to consumer spending, government spending, investment, exports and imports and how they end up as the Gross Domestic Product (GDP). Smith then discusses other economists namely as Robert Malthus, David Ricardo, and John Stuart Mill and their philosophies.
After that Smith tries to educate the reader about businesses, individual firms and how they operate. Costs and profit making, monopolies in business, real world competition, investments in business, business game theories and business ethics is discussed over a few pages at this stage of the book. The role of internet in business also makes waves in print at this stage. The discussion veered to another giant in the economic world, Karl Marx. Marxism is discussed briefly and Marx’s view on capitalism is showcased. Marx’s Das Kapital is mentioned as one of three greatest books on economics ever written. Another important aspect of the economics is then discussed – namely the role of governments. Government spending is spoken about in an elaborate manner – why is it necessary, what is the right level of spending, how to multiply government spending, all about taxes and the budget, various fiscal rules, response to the taxes imposed, etc. are mentioned briefly.
Smith then dedicates an entire chapter to John Maynard Keynes describing how influential he has been for the various economic theories over the years. The General Theory of Employment, Interest and Money gets a mention in the book, so does other Keynesian philosophies. No discussion on economics is complete without the reference to Money. The origin of money and monetary policies are discussed, the reader is made to understand how it is related to inflation and growth, and how monetarism is linked to economics.
So far Smith had been discussing economics with the British or European context. He then describes the American connection to the entire story – and how they have been the true leaders in the world of economics in the recent past. Key American economists like Irving Fischer, Paul Samuelson, Milton Freidman, Robert Lucas, etc. are mentioned after that. In the final stretch of the book, Smith addresses common economic debates that have been occurring over a long period of time. He tries to analyze key questions like why are some countries richer than others, is globalization a bad thing, is Euro a good idea, etc.
The Critique’s Approach
There is a slight glitch or two in this attempt by David Smith to educate the reader on the not-so-glamorous world of economics. Smith has based his entire discussion more-or-less with examples of the United Kingdom economy. While the general concepts and scenarios are applicable to one and all – still a variety in the settings could have helped the reader to co-relate the issue with her/his surroundings. There is a cardinal mistake on Smith’s side as he wrote the book with a certain bias towards capitalism and its merits. Ideally he would want the readers to have knowledge on different aspects of economics, not impose his beliefs on why a certain philosophy is right or wrong. While he mentions Karl Marx, his theories are showcased as wrong because they are not working in most part of the world as of today. Smith also mentions Japan, China and “tiger economies” of Asia – but hasn’t thrown light on how they operate – for there one could have been presented with a different point of view.
Conclusion
The book has been successful in making one understand how different elements of economics combine to shape the financial system. Without complicating things, Smith has managed to create awareness of the various economic principles - there will always be a category of people whose appetite has been whetted further and they would like to delve more into the subject. At the end of it, the reader will be assured that she/he can deal with the finer nuances of economics and related topics.
Authored by David Smith
Book Introduction
Free Lunch, Easily Digestible Economics by David Smith is an attempt on the part of the author to help people, especially non-economists, come to terms with the rather despised subject of economics. It is despised not because of what it deals with – but because of the clarity, or the absence of it, that most of the texts on economics provide. Something that is an integral part in the life of the common man has to be understood properly by the hoi-polloi, but unfortunately that has not been the case with most of the books on the subject so far. Free Lunch has been a welcome change on that front – and as the author claims, it does not seek to replace the gargantuan manuals full of mathematical equations and diagrams; but it does intend to make the life of a person easier with real life examples and analogies associated with several economic instruments and terminologies.
Book Layout
The author has managed to draw a wider section of audience to the book by making it a light-read, interspersed with a generous dose of humor and wit. The title of the book builds up the interest of the reader – many of us have heard the phrase “There is no such thing as a free lunch”. The book tries to find out why such a phrase is apt for the society which we live in. The book layout – in tandem with the title – has been set out as a meal plan with appetizers, a set of main courses, desserts and coffee. Many well known economists such as Adam Smith, Karl Marx, and John Maynard Keynes don the apparel of guest speakers and their contributions to economics have been examined in the book. Works and beliefs of some lesser known economists such as Robert Malthus, David Ricardo, Milton Friedman and John Stuart Mill have also been discussed by the author. The hand-book is complete with a glossary of key words/phrases mentioned at the end; and for the benefit of the interested reader, Smith goes on to mention economic websites worth visiting and a few recommended books on the subject.
Book Content
The book starts with the general definition for economics and a discussion on housing prices with an analogy with potatoes. The discussion moves on to illustrate how the economic behavior of people affects the functionality of the financial system. Adam Smith, the father of modern economics, is then introduced as the guest speaker and his ideologies in The Wealth of Nations are discussed briefly. The concept of “the invisible hand” is described at length and so are issues like division of labour and economic freedom.
The book then talks about the concept of macro-economics, economics as a whole rather than about individual parts of the economic system. Value added tax (VAT) and saving tendency of people is discussed after that. The content drifts to consumer spending, government spending, investment, exports and imports and how they end up as the Gross Domestic Product (GDP). Smith then discusses other economists namely as Robert Malthus, David Ricardo, and John Stuart Mill and their philosophies.
After that Smith tries to educate the reader about businesses, individual firms and how they operate. Costs and profit making, monopolies in business, real world competition, investments in business, business game theories and business ethics is discussed over a few pages at this stage of the book. The role of internet in business also makes waves in print at this stage. The discussion veered to another giant in the economic world, Karl Marx. Marxism is discussed briefly and Marx’s view on capitalism is showcased. Marx’s Das Kapital is mentioned as one of three greatest books on economics ever written. Another important aspect of the economics is then discussed – namely the role of governments. Government spending is spoken about in an elaborate manner – why is it necessary, what is the right level of spending, how to multiply government spending, all about taxes and the budget, various fiscal rules, response to the taxes imposed, etc. are mentioned briefly.
Smith then dedicates an entire chapter to John Maynard Keynes describing how influential he has been for the various economic theories over the years. The General Theory of Employment, Interest and Money gets a mention in the book, so does other Keynesian philosophies. No discussion on economics is complete without the reference to Money. The origin of money and monetary policies are discussed, the reader is made to understand how it is related to inflation and growth, and how monetarism is linked to economics.
So far Smith had been discussing economics with the British or European context. He then describes the American connection to the entire story – and how they have been the true leaders in the world of economics in the recent past. Key American economists like Irving Fischer, Paul Samuelson, Milton Freidman, Robert Lucas, etc. are mentioned after that. In the final stretch of the book, Smith addresses common economic debates that have been occurring over a long period of time. He tries to analyze key questions like why are some countries richer than others, is globalization a bad thing, is Euro a good idea, etc.
The Critique’s Approach
There is a slight glitch or two in this attempt by David Smith to educate the reader on the not-so-glamorous world of economics. Smith has based his entire discussion more-or-less with examples of the United Kingdom economy. While the general concepts and scenarios are applicable to one and all – still a variety in the settings could have helped the reader to co-relate the issue with her/his surroundings. There is a cardinal mistake on Smith’s side as he wrote the book with a certain bias towards capitalism and its merits. Ideally he would want the readers to have knowledge on different aspects of economics, not impose his beliefs on why a certain philosophy is right or wrong. While he mentions Karl Marx, his theories are showcased as wrong because they are not working in most part of the world as of today. Smith also mentions Japan, China and “tiger economies” of Asia – but hasn’t thrown light on how they operate – for there one could have been presented with a different point of view.
Conclusion
The book has been successful in making one understand how different elements of economics combine to shape the financial system. Without complicating things, Smith has managed to create awareness of the various economic principles - there will always be a category of people whose appetite has been whetted further and they would like to delve more into the subject. At the end of it, the reader will be assured that she/he can deal with the finer nuances of economics and related topics.
