This year I discovered Czech economist Tomas Sedlacek and his book The Economics of Good and Evil. Tomorrow, I am publishing my annual list of favorite books and it will be prominently featured. Sedlacek is to economists what revolutionaries are to their professions: outsiders who speak simple truths that are ignored by the doctrinaire followers of established wisdom. He's a kindred soul, much in the intellectual spirit of Nassim Taleb.
I've long had deep problems with the modern economics profession, gripes that prompted me to immerse myself in their works, their language and their theories—my way of trying to understand what they were trying to say. As many of you know, I'm deeply, deeply skeptical of the theories put forth by modern Keynesians, the liberal favorite Paul Krugman being the most prominent proponent. I find them mind-numbingly out of touch with the way the world actually works, their tidy theories (and lack of any humility about their own fallibility) notwithstanding. The Suburban Experiment is largely their experiment, although they will blame our unwillingness to follow them off the cliffs of economic madness as the real reason it failed.
I've generally been more sympathetic to what is often called the Austrian school due to its more organic approach, although it, too, is often too dogmatic in the face of real world tension, a reality its adherents tend to randomly discover. We're all for market feedback when it's painful for someone else, but when it's painful for us, all bets are off. We've created a bubble economy that no Austrian economist, with their cold turkey approach, can fix.
Sedlacek points out the problem with both schools and, much like Taleb, starts with simple truths known since ancient times. In an age of hubris, his approach is refreshing.
These five pieces tie his work to the Strong Towns approach. I'm prouder of this series than anything else I wrote this year. It filled an important intellectual gap for me and helped me to better understand how the Strong Towns movement fits into today's economic discussions.
We've traded stability for growth, but now we find that we have neither.
My hometown of Brainerd, MN, is millions of dollars in debt. We're one of the poorest cities in the state and are perpetually among the highest in unemployment. More of our budget comes from aid from the state than we raise locally through property taxes. We have untold obligations we cannot meet, from building repairs to road maintenance, and we've laid off our fire fighters and many of our police officers. Yet, despite our fragile and nearly desperate financial state, we are about to borrow another $10.7 million for a sewer and water expansion project we don't really need. Why would we do such a thing? The one word answer: growth... Read the rest of part 1.
On the seventh day, God rested, not because He needed to be back at the office Monday morning to create another universe... God rested because God was done.
There is a tragic paradox to the women’s movements of the past century, specifically when it comes to women in the workplace. What started out as liberation – the choice of whether or not to work and to have that labor valued and respected in the same way as a man – has evolved into something else. Today most women do not have a choice as to whether or not they work. Work is an economic necessity. In a theoretical sense, women entering the workplace should have meant a number of positive things at the family level of finance... Read the rest of part 2.
We created debt to serve us. Now we serve debt.
Common consensus among our intellectual class is that debt doesn't matter. Perhaps more precisely: concerns over debt are less important than concerns over growth. Paul Krugman, the living caricature of this mindset, writing in his book End This Depression Now, made the following argument in the introduction... Read the rest of part 3.
Are we a society of villains or of neighbors?
Adam Smith is most well known today for The Wealth of Nations and, in that book, his single (perhaps offhanded) mention of the Invisible Hand is the most famous passage. To say we have literally built our entire growth economy around this notion -- that a market where everyone works in their own selfish, self interest will magically produce optimum outcomes for society -- would not be an overstatement.... Read the rest of part 4.
Can we only satisfy our needs by increasing our neediness?
In a rain forest, you have a complex, adaptive system that has emerged in a way that is, as a byproduct of how it emerged, highly resilient and adaptable. The corn field, in contrast, is a system based on efficiency, constantly increasing the amount of output for a given unit of input. One hail storm, a few weeks of drought or a swarm of locusts and it's gone. We might think we prefer the human equivalent of the rain forest, but do we? Read the rest of part 5.