John Quiggin — Economics in Two Lessons

I’ve finally committed to delivering a manuscript of my long-overdue book Economics in Two Lessons. As part of the process, I’m going to post the chapters, one at a time, and ask for comments, criticism, encouragement and so on. To begin at the beginning, here’s the Introduction.

Crooked Timber
Economics in Two Lessons
John Quiggin | Professor and an Australian Research Council Laureate Fellow at the University of Queensland, and a member of the Board of the Climate Change Authority of the Australian Government

Joshua Gans — Economics in One Lesson: Nash

Indeed, even opportunity cost can be rarely computed without working out the full equilibrium of a path not taken. This is why, if I were to re-write Economics in One Lesson, it is Nash equilibrium that would be the lesson and not opportunity cost.

John Quiggin, are you listening?

Digitopoly
Economics in One Lesson: Nash
Joshua Gans | Jeffrey Skoll Chair in Technical Innovation and Entrepreneurship at the Rotman School of Management, University of Toronto

ht Mark Thoma at Economists View

Also

Econospeak
Gnash Equilibrium

Sandwichman

Read Barkley Rosser's comment, too. I considered writing my doctoral dissertation on the subject that he comments on at the behest of one of my professors who was interested in working on the ethical prospect of it, but didn't have the time himself. The US strategists were "crazy rational" then, as they had already demonstrated in the Vietnam conflct.

The problem I have with this approach is that games are defined by rules — like <a href="http://calvinandhobbes.wikia.com/wiki/Calvinball">Calvinball</a>. Fine when the rules are explicit, but in social games they seldom are, or there are parties able to change the rules. Often parties to the "same game" are playing by different rules. So one parties tries to guess with the other party is thinking about the game, assuming "rationality." How? By introspection.

John Quiggin — Economics in Two Lessons: Draft Preface

John Quiggin asks for comments. This repeats some of what he already posted but it is more fleshed out.

Over the page, the draft preface for my book-in-progress, Economics in Two Lessons
I got some great comments first time round, but I can see it would be easier if I presented my drafts in a more orderly fashion, though not necessarily sequential. So, I’ll begin at the beginning. Comments, both critical and favorable, much appreciated.

John Quiggin
Economics in Two Lessons: Draft Preface

John Quiggin — Economics in Two Lessons

I’ve been promising for a long time to write a new book, framed as a reply to a free-market tract Economics in One Lesson by Henry Hazlitt, published in 1946, but still in print and popular among free market advocates. Its popularity reflects the fact that it’s a reworking of Bastiat’s “What is Seen and What is Not Seen”, still one of the best statements of the case for free markets.... 

But as a general statement, Hazlitt’s One Lesson is false, which is why my working title is Economics in Two Lessons”.

I've been wondering when someone was going to write this.

Lesson Two is “Market prices do not reflect all the opportunity costs we face as a society”

To someone trained in mainstream economics, as I have been, the immediate examples of this Lesson are “market failures”, such as externality, monopoly and information asymmetries. I originally planned my book to focus on these market failures, making it a somewhat idiosyncratic take on what is usually called public economics. But I kept feeling that I was missing out too much that was important: unemployment, income distribution and many other issues.

John Quiggin
Economics in Two Lessons