Stephen Monrad

I just finished skimming through the book “Economics for Everyone - A short guide to the Economics of Capitalism” by Jim Stanford. It’s primary goal is to explain capitalism in concrete terms that are easy to understand. I like this because I believe that economics shouldn’t be complicated.

What I found particularly interesting was a chapter towards the end of the book where he evaluates capitalism. He identifies 7 attributes an economy should have and subjectively grades capitalism on each attribute. His attributes and the grades are:

• Prosperity: C
• Security: D
• Innovation: A-
• Choice: B-
• Equality: F
• Sustainability: D
• Democracy & Accountability: D+

Overall, He gives Capitalism a C-, a barely passing grade.

I’m not going to go into the details of what exactly each category means or why he chose the grades he did. You can find the details in his book. What I find refreshing is that he isn’t touting capitalism as a perfect system.

Incidentally, I came across his book while thinking about possible titles for the book I am working on. I thought the title “Economics for Everyone”  was promising because I am trying to design an economic system that can meet everyone’s needs. Unfortunately, Jim Stanford got the title first. I’ll have to keep looking.

I have just finished reading an intersting book, “Stumbling On Happiness” by Daniel Gilbert.

In the book he systematically looks at the mistakes people make when they think about what makes them happy. The bad news is that we are very bad at making decisions about what will make us happy. We misremember the past. We make poor predictions about the future. We all have beliefs about the sources of our happiness that are likely wrong.

The book focuses on research that has been done by psychologists and others on happiness. Dozens of experiments are described briefly along with their conclusions. While many of the experiments are convoluted, the results are still interesting.

In terms of economics, Gilbert’s arguments show that the decisions people make in the market place are likely not to be doing much to improve their happiness. Once a modest standard of living is achieved, additional wealth does little to improve peoples’ happiness. We cling to the belief that more money would be helpful despite the evidence that it is not. The idea that money will help is sticky because it motivates people to work hard which strengthens the economy.  This makes countries where the belief is prominent more powerful.

While it is likely to be very difficult to dislodge the idea that more is better, the evidence presnted in the book makes it appear that we would be better off if we could discard it. If nothing else, it would probably be a good idea to tone down the advertising and other public messages that encourage consumerism.