Facebook Twitter LinkedIn

Tyler Cowen called on bloggers to list the books that most influenced them. As soon as I started looking at other lists I got worried that I wouldn’t be able to come up with anything respectable. Yes, I am familiar with A Theory of Justice, The Structure of Scientific Revolutions, Guns Germs and Steel, The Bell Curve, The Road to Serfdom, etc, etc. But have I read them? Well, 30 years ago I read The Road to Serfdom, but I really don’t remember the book at all.

Perhaps you saw the movie Metropolitan. There is a scene where a young man is debating the merits of Jane Austin with a young woman at a New York cocktail party. Finally in exasperation she asks the guy “Which Jane Austin books have you actually read?” He replied “I don’t actually read novels, I read literary criticism.” I’m kind of like that asshole. I haven’t read a lot of the intellectual classics, but can spend 30 minutes telling you what is wrong with each of them. Yes, I’m quite aware of how unfair this is; I know that when you boil an argument down to its essentials the work can lose much of its persuasive power. But I did read Pride and Prejudice. (Update: Not only am I not well read, but I can’t spell either. A commenter pointed out it is Jane Austen.)

The other point I’d make is that even when I have read great books, they haven’t necessarily shaped my general worldview, but often crystallized ideas that I already had begun forming. A good example is Fukuyama’s The End of History. I had already reached the conclusion that free markets and democracy were the wave of the future (and still think so), but Fukuyama provided more of the historical, psychological and philosophical support for the hypothesis. Sometimes I wonder whether it was inevitable that I would eventually end up with my current philosophical orientation.

Instead of a list of great books, here are some “texts” and writers that may have shaped my views, and a few observations on how they shaped my 35 year journey from dogmatic libertarianism to pragmatic libertarianism. I believe the postmodernists say that almost anything counts as a text. So I include films, old newspapers, magazines, etc. Consider this an intellectual biography.

Philosophy: I suppose my major influences have been McCloskey and Rorty. If I’m not mistaken there is a sort of official track of philosophy from Plato through Kant, and then another strand that has been skeptical of the entire enterprise. I guess this latter group runs from the Sophists through Hume, Wittgenstein and Rorty. At this point in my life I’m not too interested in reading philosophy except as literature. Hopefully when I retire I’ll have time to read Hume, Schopenhauer, Nietzsche and others whose ideas I find intriguing. I’ve only read one book by Nietzsche, (The Genealogy of Morals) but he seems like the most interesting philosopher from a literary perspective. (I don’t care at all for his politics.) In other posts I’ve already talked about how McCloskey and Rorty pushed me toward pragmatism, and away from grand systems for getting at Objective Truth. As I get older I become increasing skeptical of all knowledge claims, including my own. At the same time, my pragmatism leads me to conclude that we need to proceed as if certain well-established propositions are true.

Micro: My views of micro were shaped by all of the readings for the Chicago core; textbooks by Stigler, Becker, Friedman, etc, as well as packets of practice exams. This education convinced me of how useful the competitive market model is, even in markets that aren’t perfectly competitive (which is almost all markets.) It taught me that people are far more responsive to incentives than common sense would suggest. That public policy trying to fix problems is much more likely to have unforeseen negative side effects than common sense would suggest. It taught me that the world works in very, very counterintuitive ways.

Here’s one way of thinking about the Chicago influence. When I read Matt Yglesias’ blog I see someone who seems to have basically the same values as I have. I don’t know if he’s a utilitarian, but he justifies his conclusions with broadly consequentialist arguments. And it also seems like he is smarter than me. So why do I disagree on so many public policy questions? I think it is mostly because of my Chicago education. I think I understand how the economic system works better than he does. I’d be the first to admit I may be wrong, as it is not easy to prove anything in economics. But my hunch is that government fixes work much less effectively than most progressives believe.

At the same time Yglesias has a recent post defending Wal-mart’s practice of giving payday loans and another suggesting that easy money is preferable to China bashing. That’s good. To me, Yglesias seems much more interested in finding what works than someone like Krugman, who gives the impression of being uninterested in talking about anything but examples that confirm his current prejudice against free markets. It’s something one must fight against everyday. I understand that I’m biased, that I’d much rather defend the free market. But in the end I’ve concluded that the world wasn’t set up the confirm Scott Sumner’s intellectual prejudices. It is what it is. If income redistribution and forced saving and central banking and carbon taxes makes the world a better place in utilitarian terms, then so be it.

But I still insist that people who have never been exposed to the full blast of a Chicago-style education don’t know how much they are missing. I recall being taught by incredibly smart people like Becker, Lucas, Stigler, McCloskey, etc. I think these people are underestimated by progressives. There must be dozens of Krugman and DeLong posts that suggest free market economists aren’t just wrong, but dumb. When I read younger bloggers like Bryan Caplan I realize how much my brain has been dulled in the 30 years since I left Chicago, how much of my (microeconomic) analytical skills I’ve lost that younger guys like him still have. I suppose being at GMU keeps one on one’s toes. BTW, in case anyone thinks the Chicago education I describe was brainwashing, if a student answered a question with “the free market works best” they were torn to shreds by the professor. There were a lot of diverse political views at Chicago, the Republican/Democratic vote split among the faculty was certainly much closer to 50-50 than at Wisconsin, where I was an undergrad.

Macro: My biggest influences were Fisher and Friedman. I read many books by Fisher, such as The Purchasing Power of Money, The Money Illusion, and Stable Money: A History of the Movement. From the interwar period I was also greatly influenced by Cassel, Hawtry, Keynes (the Tract, not the General Theory) and Warren and Pearson. From the post-war period Friedman was my biggest influence. Mostly the Monetary History he wrote with Anna Schwartz. I read it at Wisconsin, and immediately understood that the (hydraulic) Keynesian model that I was being taught was worthless, as I think even new Keynesians would now admit. In general I like Friedman’s critiques of Keynesianism much more than his defenses of monetarism. I was also influenced by Mundell, Hall, Lucas and especially McCallum from the post-war period. Lucas and McCallum taught me why rational expectations were so important, and why they are so misunderstood. I picked up bits of supply-side from Laffer and Wanniski. I enjoyed How the World Works, although I don’t completely buy the supply-side argument.

Politics: I once read a modern US history by Michael Barone called Our Country. (Actually I listened while driving.) I recall that the book changed my mind on politics. I used to think that the American people made the right choice when they picked the guy I favored. Barone convinced my that there were usually good reasons for whomever was elected, even if ex post it turned out to be the wrong choice. I developed a greater appreciation for democracy. It’s interesting that when I read Barone now he seems like a quite hard-core Republican. That’s not the impression I got from the book. Did I misunderstand the message of the book? Did Barone misunderstand the message of his own book? Did his views change? It seems like the entire country got much more polarized over the past 12 years.

History: I once read all the New York Times from 1928-38. History seems really different when it is actually happening. The people back then seemed just as smart as we are. Of course we have a bit more history to learn from, so we did a bit better with monetary policy this time around. But we still made many of the same mistakes, just to a lesser degree. The class distinctions back then seemed bigger–which surprised me. I knew that was the case for African-Americans, but I didn’t realize that class divisions among whites were also much greater, and that the upper class was so uninterested in the suffering of average farmers and workers. Or how much wealth was concentrated in New York City at that time. I also developed a much greater respect for the stock, bond, and commodity markets’ ability to forecast the economy. They reacted to lots of things that seemed very important at the time, and that I think actually were very important, which are totally ignored by historians. A good example is the gold panic of early 1937 and the dollar panic of late 1937.

The Neoliberal Revolution: The Economist magazine, which I’ve read for 35 years, was my guide to the neoliberal revolution. By the end of the 1980s I understood that it was a global phenomenon and that it was bi-partisan. This inoculated me against Krugman’s conspiracy theories that the Reagan revolution was all a right-wing Republican plot to grab Southern whites by playing the race card. Even if true of the US, it doesn’t explain why the same policy trends occurred in 200 out of 204 countries. And then there is Krugman’s argument that economies often did not do better after the free market reforms. From The Economist I learned that you have to look at things cross-sectionally. Almost everywhere in the world economic growth slowed after 1973. The important point is that growth slowed much more in countries that did little reform, and much less in the more free market economies. It doesn’t matter whether Chile grew faster or slower after 1973, what matters is that after 1973 Chile became the most successful economy in Latin America.

Tactics: The film Gates of Heavenly Peace convinced me that reform is usually better than revolution.

Culture and economics: I got a better understanding of culture by reading travel books and novels by V.S. Naipaul and his brother Shiva. Thomas Sowell’s books convinced me that culture was very important in explaining economic inequality. And yet, I still find cultural theories of economic development to be unsatisfactory. When Asia was far behind the West you could point to cultural differences. When Asian started doing well you could point to the high IQs scores in some Asian countries. When Ireland was poorer than Britain you could point to the conservative Catholic culture. But then it suddenly got richer. The poor performance of Latin America was due to the Spanish influence. But then Spain started growing much faster than Italy. No problem; now people could point to all the Italians in Argentina. The theories seem disturbing ad hoc (and perhaps offensive as well.) I still think culture matters, but I’m just not sure how.

Communism: I’m old enough that my ideas of economics were formed with the backdrop of communism. We were right-wing because we were anti-communist. (It’s very revealing that when someone on the left described someone as an anti-communist back then, it was meant to be derogatory.) I still recall when lots of progressives thought Mao was a great guy. Communism is to modern liberalism roughly what racism is to modern conservatism. Conservatives claim to be free of racism and progressives claim to oppose communism, but both groups have a lot of skeletons in their closets. The book that had the greatest influence here was Harvest of Sorrow, which described the Russian/Ukrainian famine of 1932-33. Although the book was written by Robert Conquest, what I remember best are the quotations from Vassily Grossman—I suppose he’s the person people should read. I learned that starvation is perhaps the worst way a person can die, and hence that the Chinese Great Leap Forward was probably the worst thing that ever happened. (Maybe not the worst crime, I suppose it was mass manslaughter, as compared to the Holocaust’s mass murder.) This also got me thinking about similar horrors, such as the treatment of Native Americans and the African slave trade. Here’s a few views that came out of this soul searching:

1. The worst thing that ever happened (the GLF), was partly motivated by one of the best of all human motivations, sharing. That is, the same motivation that makes family life possible. This led me to conclude that extreme egalitarianism and extreme selfishness are both among the most nightmarish scenarios. We need to think long and hard about how to make egalitarian policies work effectively.

2. If the GLF was a failure of communism, then the slave trade and death of millions of native Americans show the dangers of my favorite ideology, classical liberalism. Yes, it was the classical liberals who were among the first to call for the abolition of slavery, and to organize anti-slavery movements. But that’s only part of the story. Samuel Johnson asked “how is it that we hear the loudest yelps for liberty among the drivers of Negroes?” And here’s what worries me even more. I believe that classical liberal ideas made Europe richer and more powerful than the rest of the world between 1400 and 1800. This allowed Europe to dominate the entire world in a way that was very costly to others (even if some of the harm, such as smallpox was unintentional.) Europe was gradually getting more ethical, but it was getting more powerful at a much faster rate. What does this mean for today? Even though I favor classical liberal ideas like free markets, sometimes I wonder whether the experts in fields like biotech really know what they are doing. Are they getting smarter and more powerful faster than they are getting wiser? Is there a danger that they could produce a pandemic for which they have no cure? Who knows. But after watching our “experts” handle the financial crisis, I don’t have much confidence.

I came of age during the 1970s, which made me a hard money guy. Then I studied the 1930s and learned that it was people like me, hard money guys, who caused the Great Depression. We need to be very careful when we are given a chance to run things. Progressives face the same risks. Obama’s fans are frustrated that he isn’t able to do everything he wants. But that may be a blessing in disguise. In his heart he’d probably prefer something like the Swedish model. But in my view any attempt to impose that model on the US would lead to an economic disaster. We are a very different country.

Optimism: This may seem to conflict with what I just discussed, but I also think that we often worry too much. The Population Bomb influenced me greatly, in two different ways. I first read it as a teenager, and found it completely convincing. Later I came to realize that the arguments were bogus, and I turned toward the sunny optimists like Julian Simon. Even today this makes me a bit less concerned about global warming than someone like Al Gore, despite the fact that I agree the Earth is getting warmer due to greenhouse gases. The things that scare me are the things were aren’t prepared for, like a pandemic. I do think it’s wise to have a carbon tax, for lots of reasons. But I don’t lose sleep over global warming, and expect something else will prove to be the biggest challenge of the 21st century.

I also read a book by Herman Kahn called The Year 2000. It’s so long ago that I don’t recall whether the book was any good. But it did impress upon me the power of compound growth rates. I suppose that’s why sometime in the 1980s I realized that China was going to become a really big economy. I just looked at three factors:

1. China was abandoning communism.

2. Other market economies with similar cultures grew really fast in the 1960s-1980s.

3. China had over a billion people.

That’s one prediction I still feel pretty good about.

Literary influences: Under Western Eyes and Heart of Darkness are some of my favorite political novels. I think Conrad’s skeptical take on utopian ideologies holds up pretty well. Both books seem prophetic, as does The Secret Agent. But I tend to steer away from literature about society, or about politics, as I am kind of an anti-social personality. I tend to like novels about loners, about nature, or about philosophical ideas.

I suppose my blogging style was influenced by the essays of people like Borges and Chesterton, who loved to play around with paradoxes. They liked to start by saying something to the effect; “everyone believes X, but perhaps the exact opposite is true.” (Obviously I don’t share Chesterton’s political views.) Many years ago I read a lot of the essayists that right wing intellectuals typically read; Mencken, Tom Wolfe, Camille Paglia, PJ O’Rourke. It seems like ages since I read Republican Party Reptile. Was there really a time when it was cool to be a Republican? Did the Republicans change, or did I change?

I also think that reading literature can open one’s mind to alternative ways of looking at the world. Donald Richie’s books on Japan made me recognize that our way of life isn’t the only possibility, even for a fully developed country. Post-modern European novels probably made me more receptive to the philosophical ideas of people like Rorty. And literature in general also makes one empathize with the suffering of others, especially people who differ from us. I suppose this makes people more liberal-minded, defining ‘liberal’ not as left-leaning, but more broadly as something like secular consequentialist.

Recently, my biggest influence has been other bloggers.

Facebook Twitter LinkedIn

Tags: Books

This entry was posted on March 20th, 2010 and is filed under Libertarianism, Misc., Neoliberalism. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response or Trackback from your own site.



