Considering the vast number of economists trained in leftist universities and fed socialist soup, it’s refreshing to encounter some who found truth or who got mugged by economic reality. Economists Walter Williams and Thomas Sowell overcame the odds, made distinguished careers for themselves, and contributed immensely to the education of others through their writings, lectures, and the fortitude of their character.
Robert J. Barro is another such person. Noted Harvard professor, economic consultant, and author, Barro also admits to having experienced this deep-seated university tilt. He, too, matured beyond the conventional wisdom doled out on most campuses throughout the 1950-1990 era. How did he manage to emerge from socialist swamps? He lists two causes of his intellectual transformation:
(1) He deployed economic reasoning to combat widely held beliefs — which accounts for the wonderfully defiant title of his book; and (2) he managed to get to the University of Chicago between 1972-75 to learn how serious economic and financial debates are conducted.
Clearly, the Chicago school experiences produced the kind of enlightenment and research that eventually won Nobel Prize recognition for many of his colleagues. Fittingly, the interaction he enjoyed with luminaries like Friedman, Stigler, Becker, and Lucas became grist for Barro’s first chapter containing various thoughts, anecdotes, and analyses.
Barro’s second chapter is a no-nonsense series of short discussions dealing with “Economics of Social Issues.” This is a virtual catalog of all the toughies in today’s world of legal and psychological sensibilities, from the economics of beauty, abortion, and crime to drugs, Napster, and meritocracy in higher education. The breadth of his subject matter might be disconcerting to a reader were it not that Barro hits each with the common denominator of economic logic.
Readers of this magazine will appreciate that Barro seeks to bind himself and his audience to the power of economic reasoning, rather than bowing to the political expedience of “PC” graces. This is especially laudable for a Harvard academician. He discusses how his economic diligence and focus occasionally make him the outsider or even pariah on campus. But this is refreshing and helps clarify what is happening here and abroad.
And indeed, Barro uses his third chapter to illustrate successes and failures on topics of economic growth, democracy, and international affairs. He superbly elucidates the several growth-enhancing agents that governments around the world need to embrace to promote prosperity. These passages are must reading for most consultants, administrations, and legislators because Barro is offering key, unvarnished truths about incentives that are essential to any well-functioning economic system. In this connection, readers will also appreciate Barro’s pithy insights regarding myopic, fraudulent, or self-serving motivations of leftists.
Barro’s concluding chapter focuses on monetary and fiscal policies and macroeconomics. Again, the reader is both informed and entertained.
For example, citing studies on the very topical question of reasons for federal budget deficits and mounting public debt, the author cuts to the chase and identifies the culprit: undisciplined spending by government officials. He notes that in cases of successful budget reform, 73 percent of deficit reduction involved less spending, whereas for the failures, only 44 percent took this form. He explains that spending cuts are most successful in removing deficits because they are most permanent. They endure “because they tackle the two items of the budget, government wages and welfare programs, which have the strongest tendency to automatically increase.”
If there is a weakness or inconsistency to be found in Barro’s book, it is the author’s occasional hesitation or pussyfooting on issues where you would expect him to be swinging for an argumentative home run. For example, Barro’s treatment of the International Monetary Fund and West Germany’s disastrous monetary accommodation during the East German economic merger suggest he shied away from the “Nothing Is Sacred” theme, possibly because of his prominence in consulting circles and his collegial association with so many notable economists who hold key posts at international agencies and in governments across the globe.
That, however, is only a minor irritation in the scope of an excellent and recommended read.