Friday, December 24, 2010

The Price of Everything: Russ Roberts

Russ Roberts' The Price of Everything is an engaging story written by an economics professor in an attempt to show how prices help us direct our efforts so they will provide the most benefit to others we will never meet. In the story Ruth Lieber, a strikingly insightful Stanford professor leads Ramon Fernandez, a charismatic student athlete, to an appreciation for the unseen consequences of prices after he leads a protest of a local big box store for raising prices after an earthquake.

Ruth sometimes explains, but more often hints so Ramon will investigate for himself, how higher prices or the expectation of a higher return cause suppliers, inventors and others to provide more useful goods and services so they're available when people want them.

The prose is vivid and the characters are interesting. Most of the story is reasonably believable, though there are enough hints at the purpose of the exposition that no one should be surprised at the occasional speech. Roberts does a good job of keeping that to a minimum, but he does have some points to make. Ramon isn't initially interested in economics, but he's smart enough to look into the details when Ruth points out inconsistencies between how he expects people to act and the ways they actually do. Ruth (and Russ) rely on common experiences so Ruth's objections will strike home to readers who are reasonably honest about how events actually turn out, even if their prejudices align more with Ramon's.

I think this would be a reasonable book to give to someone who wants a gentle introduction to the economic way of thinking. It can be read as an interesting story, or for the insights it provides.

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