Armchair Economist: Economics & Everyday Life Reviews

• Tour the mind of an economist

  
  By AK81WLVD5KGUX on 2001-08-06
  If you're remotely interested in economics, you should read this book; it's a hoot.

  Not too many books on economics could be described as a "hoot." But Steven Landsburg, an economics professor at the University of Chicago when he wrote this book (now he's at the University of Rochester), has a delightfully sharp sense of humor and a gift for clear, logical exposition. He also doesn't in the least mind naming names when it comes to egregious economic fallacies and the people who commit them: he keeps a "Sound and Fury file" consisting of economic gaffes from the op-ed pages and he devotes a chapter to exposing the culprits.

  His theme is easily stated, and he states it on the first page: the substance of economic science is that people respond to incentives. "The rest," he writes in deliberate imitation of Rabbi Hillel, "is commentary."

  Landsburg fills the rest of the book with such commentary. His witty and occasionally sarcastic exposition deals neatly with such topics as why recycling paper doesn't really save trees; why certain statistics are not reliable measures of the "income gap" between rich and poor; why the GNP is not an especially accurate measure of national wealth; why unemployment isn't necessarily a bad thing; why taxes _are_ a bad thing; why real economists don't care about what's "good for the economy" or endorse the pursuit of monetary profit apart from personal happiness; and lots of other points that will no doubt be profoundly irritating to people who just _know_ he _can't possibly_ be right.

  For example, Landsburg is delightfully allergic to the claims of the "environmental" movement and recognizes it quite clearly as a strongly moralistic religion. And contrary to the opinions of some not terribly careful readers, he does distinguish firmly between the actual harm caused by pollution and the psychic harm caused by (e.g.) the use of automobiles to people who object in principle to such technology.

  Interestingly, Landsburg recognizes a problem here for his own cost-benefit approach: if economic efficiency with regard to utilitarian/consequentialist goods and bads were really the whole story, he notes, he should care about _both_ the physical harm and the psychic harm, and yet he doesn't.

  Which leads neatly into the other notable feature of this volume: Landsburg is stunningly forthright about the nature -- and the limits -- of cost-benefit analysis. Unlike some economists who like to pretend such analysis is value-free and involves no commitment to any particular view of morality, Landsburg is clear that cost-benefit analysis is quite unambiguously committed to one particular moral outlook (which he characterizes and describes very neatly). And he is keenly aware of its limitations, though he is not at all confident about what should replace it.

  The problem, roughly, is this (the following characterization is mine, not his). As Landsburg notes several times, cost-benefit analysis does not regard "theft" as a cost, since it merely transfers existing stuff from one person to another; society is no worse off on net after the theft than before it. (Of course theft entails _further_ costs that _do_ leave society worse off, but that's not the point here.) Economics, as Landsburg describes it, looks only at _outcomes_ and not at how we got to them. And even at that, it looks only at one abstract feature of such outcomes, namely, how much "good" there is in the aggregate.

  And yet most of us would say that "society" _is_ somehow worse off after a theft -- that there is some sort of "moral cost" involved in the theft itself quite apart from its further consequences, and that it makes a difference whose "good" is rightfully achieved or acquired and whose is not. (Some of us might even say that there is something illegitimate in comparing the thief's gain to the victim's loss in the first place.) In ordinary moral discourse, it matters very much how we arrived at a given state of affairs.

  If so, then economic science has two choices (this is still my opinion, not his). (1) It can throw those "moral costs" into the mix and deal with "rights and wrongs" in the same way it deals with "goods and bads." In that case, the total "good" will take account of the number and quality of right acts vs. wrong acts. (2) It can ignore those "moral costs" and continue as before.

  In either case, economic science _as Landsburg presents it_ is simply insufficient as a guide to policy decisions. (Landsburg tends to acknowledge this, maintaining only that cost-benefit analysis is an important _part_ of whatever it is we need to make policy decisions.) And it is certainly not -- as Landsburg also recognizes in a wonderfully forthright chapter -- sufficient as a guide to personal conduct.

  So this volume gets five stars even though Landsburg doesn't have much to say about what should supplement cost-benefit analysis. It's a terrific introduction to economic thinking genreally, and it's also a clear and frank recognition of the limitations of such thinking at least as practiced by many mainstream economists.
  
  

• sometimes misses the point of opposing arguments

  
  By AOL7V6D4AL3KO on 2004-12-12
  Landsburg's book is entertaining and often witty, and written in a conversational, easy-to-read style. The book is very good at presenting often unintuitive and novel (to the non-economist) ways of looking at things. This is an invaluable book for pointing out common fallacies in arguments about deficits, inflation, unemployment, and other major political issues. At the same time, however, I can't help but think that Landsburg occasional misses significant relevant issues, most glaringly in the final chapter on environmentalism. For example, Landsburg describes a case where Jack wants a woodland at the expense of Jill's parking space and vice versa, and argues that the desires are exactly symmetrical. While environmentalists claim that the wilderness should take precedence "because a decision to pave is 'irrevocable'", Landsburg says "a decision _not_ to pave is _equally_ irrevocable" because "Unless we pave today, my opportunity to park tomorrow is lost as irretrievably as tomorrow itself will be lost" (p. 224). While this is correct, this misses the environmentalist's point that it is much easier to convert woodland to parking lot than to do the reverse. The environmentalist fears taking actions that are irrevocable in the sense that they cannot be undone in the future. Landsburg's perspective throughout the book seems to me to ignore the possibility of actions taken which may have consequences which may adversely effect the very existence of mankind (or economic institutions).
  
  Another example in the same chapter is when he suggests that the best way for environmentalists to support the existence of cattle is to eat beef: "If you want ranchers to keep a lot of cattle, you should eat a lot of beef" (p. 225). This presumes that environmentalists care about the number of cattle in existence, irrespective of their living conditions. Would Landsburg have told abolitionists during the Civil War to buy more cotton as a way of improving the plight of slaves?
  
  Yet a third example in the same chapter is about preservation of the Amazon rain forest, because a new species of monkey was discovered there in October 1992. Landsburg writes that this gives him reason _not_ to preserve the rain forest, since he "lived a long time without knowing about this monkey and never missed it" (p. 226). Would he make the same argument if it was a tribe of people whose existence depended on the rain forest rather than a species of monkey? If not, then he's missing the point of those who argue that animals (or the environment) have inherent value. It is clear from his writing that he disagrees, yet his own position does assign inherent value to the interests of people and so is not neutral. He seems to admit at the end of this chapter--in the letter he wrote to his child's teacher--that his view on environmentalism amounts to a religious view that is not subject to discussion (just as he thinks environmentalism itself amounts to a religion being inappropriately taught to his child).
  
  Despite my complaints, I found the book as a whole to be entertaining and informative, and would recommend it along with David Friedman's _Law's Order_ (I haven't read Friedman's _Hidden Order_) for insight into economic analysis of issues of the day.
  
  

• the armchair narcissist, perhaps

  
  By AHEFZYKKOW7UG on 2003-10-01
  This may not be the worst book on economics ever written, but it surely ranks among the most narcissitic and self-indulgent.

  Landsburg explores through 24 short chapters a number of myths, problems and paradoxes that confront the contemporary economist. The problems in the book fall into two general categories.

  First, Landsburg seems far more interested in proving his own cleverness and superiority than presenting useful discourse. Take this example: "In my experience economists are extraordinary in their openness to alternative preferences, life-styles, and opinions." One senses that Landsburg could go on at length about the intellectual and characterological virtues of economists. Mercifully, one can fit only so much self-praise in such a brief volume.

  There are other examples, but let one more suffice: "There is an appalling population of otherwise literate adults who prefer the poetry of Rod McKuen to that of William Butler Yeats." He follows this observation with a contrived scenario in which McKuen-lovers buy volumes of Yeats for public display so as to conceal their real preference.

  Now mass culture is certainly fair game for criticism, but Landsburg's contempt for anyone not a member of the allegedly superior economist class is so pervasive and mean-spritited that it finally is just offensive. He outdoes even himself in one chapter that is nothing more than a puerile diatribe against environmentalism.

  This arrogance might be tolerable if the text were otherwise virtuous. But failures of substance are legion. Many of the "problems" that he addresses are trite or have trivial solutions. There are numerous examples of inconsistency between chapters and, in at least one case, a hypothetical with analysis that disregards its own assumptions. Finally, some of his commentary is simply jejune, as for example his discussion of air pollution in which obvious externalities are somehow ignored.

  On the positive side, the book may have some use as a thought-starter; some of the problems posed are thought-provoking. And a pervasive theme -- that obvious solutions to economic problems may well be wrong -- is certainly correct.

  The failings here are unfortunate. Economics is a poorly understood science; and that poor understanding has led to misguided social and economic policies. Landsburg had an opportunity to produce a really useful volume here but was diverted by his own attempts at cleverness and self-congratulation. Too bad.
  
  

• Proof Publishers and Editors Need Economic Training

  
  By A3V8WCEQ11RJF4 on 2005-10-03
  Three facts about economists teaching laypeople:
  
  1: Economists love to be counter-intuitive.
  2: Economists love to be controversial.
  3: Economists love to go on about their personal opinions as though they were fact because, after the above two points, no one feels he or she can defend any contradicting opinion
  
  This book suffers from the worst of these points. Yes, economics is sometimes quite the opposite of what one might think and is very often "politically inviable" because of its conclusions, but Mr. Landsburg goes far too much into the rhelm of "I'm the author, you have to do what I say." I, too, agree that, for example, enviromental policies are often extremely ineffecient. However, if these policies are important to others, if they bring happiness or, in other words, "utility" to a degree greater than the opportunity costs incured, that's their business. The book is scattered with his belittlement of the poor idiots who don't understand economics and if they did they would think like him.
  
  This is the sort of reason why people don't like econmists. This is why people think we're heartless prigs. If the people through whom this book must have gone before it was published knew enough about economics to defend their positions instead of just accepting the author as their better, they would have perhaps reminded him to tone down some of his particulars that he forms into generalities.
  
  
  To summize: Mr. Landsburg is an insufferable know-it-all, who does, in all fairness, know-it-some.
  
  

• Not a good introduction to economics

  
  By A3C3MRA6O8JCFT on 2004-01-18
  Landsburg apparently sets out to explain real-world, everyday economics phenomena (the subititle is "Economics & Everyday Life" and the cover has every-day examples) but proceeds to merely use real-world, every-day examples to show that economics is inscrutable and political. He fails to actually reach any conclusions about most of the scenarios on the cover--or any others, for that matter--and continually concocts loaded scenarios that enable him to reach bizarre conclusions. The worst part about this technique is that it leaves the reader continually baffled--knowing that his conclusions are wrong but not sure why.

  Landsburg is best when he is talking directly about economics and worst when he applies theories of economics to law, science, and the environment.

  He concludes that air pollution is great because it makes a city so unlivable that poor people can afford it, ignoring the fact that real-world cities are always more expensive to live in than the (unpolluted) countryside and that cities--polluted or not--always contain lots of poor people and rich people.

  Landsburg claims that we shouldn't elect the best candidate for senator because that person's productivity is better used in private industry. He fails to take his argument to its logical conclusion and have the country run by autistic children. Apparently, he can't see that the work of a senator also has value and can actually be more beneficial to the economy as a whole than the work of a private businessman.

  He goes on to claim that the value of proving scientific theory with experimentation is mainly in giving credibility (and higher salary) to the scientist (it's actually in the economic value being right more often). He claims that there are "high-powered" research firms and "low-powered" research firms so that bad scientists can work at the "low-powered" ones and stay out of the way (high-powered firms are actually for theories with high profit potential, not high correctness potential). This shows that Landsburg thinks that science works like economics: theories don't have to be proven right before they are implemented.

  Landsburg's hatred of environmentalism, which is a recurring theme (he ends the book with a letter attacking his daughter's kindergarten teacher), is especially peculiar. He seems unaware that the destruction of flora and fauna is a permanent loss of not just value but a resource to the planet and its people. He argues that the value that could be obtained by destroying it is also lost if it is never destroyed; this is true (it's the definition of "consumption") but there is a fundamental difference between a non-renewable rainforest and a renewable resource like wheat or cows. The rainforest can even provide us with value (exotic plants and animals, tourism, oxygen) without destroying it, making it a renewable resource. Perhaps Landsburg looks out on the Statue of Liberty and bemoans the waste of all that good scrap metal that could be had.

  He casually observes that since he never heard of a certain species of monkey, it didn't have much value. Well, that monkey has never heard of Steven Landsburg, but I'm sure that Landsburg and his family would say that the world is still a better place with him than without him. But the monkey and I am not so sure.
  
  

• Interesting thoughts; shame about the attitude
  By AAO2KRDPISBJN on 2004-06-26
  This is the first book that has moved me sufficiently to write a review on Amazon.

  I found it an entertaining read, with some though-provoking ideas often wittily written up. It is such a shame, though (and I read a review here from someone else with similar views) that the text is threaded so liberally with the author's private conceits. What a very smug and self-satisfied man.

  Again agreeing with a previous review here, in the end the sheer arrogance becomes offensive and begins to overshadow the arguments being put forward.

  I'm glad I read the book. I'm also glad, however, that I shall likely never meet Steven E Landsburg.
  
  

• A Poor Intro to Economics
  By A24ZB60E3JFX1J on 2000-02-23
  This book was terrible. Repeatedly Steven Landsburg presents examples of how others have gotten economics wrong, then proceeds to make the same mistakes himself. Steven Landsburg comes across as an arrogant anti-environmentalist. He even has the gumption to print the letter he sent to his daughters kindergarten teacher blasting her for teaching recycling. The idea that recycling paper is bad for the environment because then paper producers would then not plant trees is ridiculous. If it were not for the outlawing of hemp by Hearst in the 1920's, paper would still be made of it and destruction of forests for paper would not have happened. The fact is recycling reduces the use of chlorine and production of dioxins. If forest are not used for paper then maybe it can be used for a hike. But the idea that the environment or any other object has a value beyond today is not important. I ask Steve to think about the next generation when he starts claiming that we have to have dirty air, because if all air was cleaned, then the value of clean air will decline. The value of clean air will never decline. Also, the author presents the idea that democracy is inefficient and "the only `democratic' procedure that meets the minimal requirements for democracy is to anointing a dictator!" What does the book say about the growing income gap in America? Steven says that it is a myth - that statistics do not show that one year you may have a bad year and the next a good year. Steven seems to think that right now the rich are rich, but tomorrow they will trade places with the poor and it will all come out on the wash some how. Concerned about high pay of corporate officers? Well Steven thinks they are not payed enough for there "risk." This is not really an economics book, but a diatribe to justify the current destruction of the environment, and growing income gap.
  
  
• Thoughtful, entertaining, and right on the money
  By A22NP67VS11F71 on 2000-01-07
  Landsburg hits the nail on the head with this book. I was looking for a short and to the point explanation of economics for the benefit of my 17 year old daughter when I picked up this book and found that and more. His premise is that "people respond to incentives and the rest is just commentary." Landsburg takes off from there and explains economic concepts with simple but apt examples and deflates quite a few myths in the process(using no formulas or complicated math in his presentation but including endnotes with references for readers inclined to look behind the words).

  College students would do well to read through this book before plunging into macro- or micro- economics because it puts the theory into perspective with real world examples and stories. Everyone else can benefit from having a better understanding of how our economy works.

  I highly recommend this book as informative, thoughtfully written, and thoroughly entertaining.
  
  

• Complex economic lessons boiled down for the everyday reader
  By on 1999-10-31
  Steven Landsburg's book, The Armchair Economist, is a simply written but deeply effective primer on the economic way of thinking. I my own self am a free-market radical, and, while I don't agree with everything Mr. Langsburg writes, his views are overwhelmingly on target. Want to know why movie popcorn costs so much? The "obvious" answer is wrong. Are you happy when your senator provides your area with a road project? You really shouldn't be that excited about it. Even the most absurd notions (Unemployment is good! Recycling is bad!) are hard to refute once you get the basics of economics down. Mr. Landsburg writes that economics can be largely defined in one terse sentence: people respond to incentives. If everyone in America knew how much that makes sense, I can guarantee 90% of our nation's (and world's) social ills would be eliminated.

  I used to tell people that if everyone read the first few chapters of a standard economics textbook, the world would be better off. The same holds true for this book.
  
  

• An Arrogant Defense of Greed
  By A1T0Z8BOCKRQP4 on 1999-11-23
  The author of this book finds himself highly clever and amusing. I find him highly smug and pompous. His claim that increased deforestation is good for the tree population is a prime example of the twisted logic of an urban capitalist who simply cannot admit that his comfort comes at a high price. What a load of beans. Recycle at once!
  
  
• Interesting, yet mean spirited and disorganized
  By A1LVMQ52YODRMO on 2002-11-18
  This book is a good read; it's fun, entertaining, and factual correct. Landsburg explains simple concepts through the eyes of an economist with blinders on. It's an interesting read where pages seem to fly by. For an educational book, it flows as freely as a novel, and is incredibly gripping for something about economics. He presents different scenarios, from the price of popcorn to government debt, and shows how a true economist would view each situation in small bite sized chapters. It's both refreshing, and at some points, eye-opening.

  One problem is that he tends to simplify everything way too much. It's hard to relate what he says to the real world when many of the details are gone. For example, when explaining national debt, he talks about the lending rate, and the rate of return to being exactly the same. He doesn't explain what would happen if they were different.

  Another problem I had is the lack of continuity. He seems to switch from one topic to another without any direction. Sometimes, the types of arguments were repeated from one hundred pages ago, while the previous page had nothing to do with the current page. With about 30 or so seemingly random arguments and situations present, it's hard to place it all into any lesson or theme.

  Finally, and most importantly, Landsburg seems to take out his aggressions and displays some mean spirited rants in the latter part of the book. I felt that it incredibly hurt his credibility. When someone starts debasing someone else's opinion vehemently and atrociously, it gives the impressions of fanaticism rather than cool-headed thinking. He seems to enjoy criticizing every line of particular papers and making the writer feel like an idiot. He even goes so far as to reprinting a letter he wrote to his daughter's kindergarten teacher espousing the horrors of environmentalism and how the teacher is indoctrinating his daughter into it.

  I would recommend this book as good, fun, quick read. As an educational piece, it needs to be more organized and more levelheaded.
  
  

• Good but starting to sound a bit dated
  By on 2004-06-23
  While the book has some interesting parables and anecdotes and is an engaging look at some problems from the "man is a rational agent" perspective, this mantra starts to get a bit tiring after a while (and is also starting to sound a bit dated with recent developments in the field).

  My main gripe however was the author's style. Arrogant and condescending, I found the book hard to get through at points - despite being interested in the content.
  
  

• A word from an economics student
  By on 2000-05-21
  To be fair, this book has moments that are very funny, some of the funniest I've ever read in economics, and Lansburg provides some economic insights into social problems that are truly enlightening, such as his comments on competition among the sexes for mates, competition among political parties for voter-consumers, and his lucid explanation of what the "random walk" of stock prices really means. However, I could not finish the book for the style in which the ideas are presented. First, the prose is not fluid. Lansburg often wanders in his argumentation, leaving the reader behind to anticipate where he intends to go with his analogies. The result is a lack of transition that makes you want to read the chapters over again to absorb what he is saying. Second, he contrives some overly simple hypotheticals to drive home his points, and these don't even survive a moment's critical reflection. Granted, his economic arguments, however outlandish someone else may think them to be, are correct, but his models are so abstract as to have little relevance in the real world. Most importantly, Lansburg is guilty of making straw men out of his opponents' arguments. More than once Lansburg makes his opponents' arguments into weak, brittle little straw men and then proceeds to hack them apart. Lansburg's arguments are correct and proven in the literature, but he is an argumentative bully. As a final criticism, I would say that a few of the chapters are downright awful.(I wonder if other readers will understand any of it.). On the flipside, Lansburg is very funny, and you won't find any falsehoods in the book. So, my advice is to skip the book, or read discerningly, skimming the poorly written chapters. Economists were never known for their writing ability, but you can probably enjoy a book buy Paul Krugman (Age of Dim., Peddling Prosperity, etc.) a lot more. (Krugman is also more current.) --Lewis Gainor, Mizzou Econ
  
  
• a perspective-altering study demonstrating its own limits
  By A29WNGF0LYNPO5 on 2001-04-24
  Enough has already been said about the perspective on economics that this book gives, and how it can give laypersons a good insight into the thought processes behind economic analysis. This review is in regards to the final chapter, an out-of-place editorial tirade entitled "Why I Am Not An Environmentalist: The Science of Economics Versus the Religion of Ecology." (This chapter can be taken as an editorial afterthought since, unlike the other twenty-three chapters, it lacks any listed academic sources in the appendix.)

  It's possible that this final chapter on the evils of environmentalism is a clever satire not unlike Swift's "A Modest Proposal" (that the author himself references in chapter 15). Or maybe he's merely speaking point blank about his own ideas. Regardless, whether Landsburg intends to or not, he writes the perfect final chapter to a survey of economics: he exhibits the limits of the applicability of economic theory.

  What he either demonstrates or merely fails to take into account is that some things have worth beyond their immediate market value. Forests and other natural resources have consequence outside their economically-quantifiable use for paper or recreation. What Landsburg shows is that economics, which explains behavior though simplified models, falls short at the point where it fails to take into account actions that alter the world that contains the model itself.

  The ease and comfort (and the world that it takes place in) that economists are attempting to maximize through consumption is put at risk by that consumption itself. Explain the point through models, put a market value on trees, put a market value on oxygen, and use natural resources for their greatest economic potential, but if the ecosystem breaks down, it doesn't matter what the interest rate or money supply is; life quality will be inextractably decreased for the model world as a whole. If you prefer cleaner air, maybe you can move to a higher priced neighborhood as Landsburg suggests, but unless you're moving to another planet, there won't be a piece of real estate that is unaffected from the effects of environmental degredation. The economic model presented in this chapter fails to take this result into account.

  But it's not likely that Landsburg's beliefs are a satire. The letter that he sends to his child's preschool against their recycling program only mirrors the fanaticism and righteousness that he rallies against when he uses the analogy of an academic curriculum that includes environmentalism being akin to forced religious conversion.

  One of the most telling points of Landsburg's ignorance on the subject is that he continually confuses 'ecology' (a true science, arguably stronger in its hard scientific analysis and ability to predict outcomes than the social science of economics) with 'environmentalism', a social movement. Perhaps Landsburg should best stick to popcorn and avoid showing his ignorance of biology.
  
  

• A well written popular econ book written for those all ready familiar with basic economics
  By AVFKGZ9BB683S on 2006-07-23
  Reading the reviews of The Armchair Economist show people's amazing lack of understanding of value. What I value is not necessarily what you value AND vice versa. People value things differently from others, and nothing has innate value. Something only has value if you are willing to pay for it (people will assume here that I only mean money, but I also mean paying for something with time, emotion, thought, or any other type of effort, not just money).
  
  Many of the reviews bash Landsburg for being an anti-environmentalist and accuse him of arrogance. The reviewers are clearly environmentalists, and value the environment (however they define it) more than Landsburg, so declare themselves superior by saying how inferior he is. Landsburg's point is that there ARE competing views. There are real costs imposed on people due to environmental regulation that exceed the benefits that these regulations are supposed to bring about (the fact that costs outweigh benefits for environmental regulation is typical). One of his parables goes something like this: Imagine two towns, Cleanville and Smogville. Cleanville has clean air, but has $10,000 homes, while Smogville has dirty air, but $5000 homes. These towns are identical in all other aspects. No one is forced to live in either town, so people can freely move to EITHER town. The people who live in Smogville choose to put up with dirty air to have cheaper housing. Those that live in Cleanville think that $5000 is a reasonable cost to have clean air. But now somebody decides that Smogville's air should be as clean as Cleanville, so introduce legislation cleaning up the air, which results in a house in Smogville to cost $10,000. Now those that chose to live in Smogville because of cheaper housing (i.e., those that think $5000 is not a reasonable cost for clean air) are hosed. The choice of cheaper housing (at a cost of dirtier air) was taken away. THE CLEAN AIR LAW IMPOSED A $5000 COST ON EVERYONE IN SMOGVILLE WHO LIVED THERE, BY THERE OWN CHOICE, THROUGH HIGHER HOUSING COSTS.
  
  Those that don't like this arguement deny there is any trade off. They think clean air is always more important than cheap housing and treat those who would dare to choose otherwise as soft in the head. If you choose clean air over cheap housing, there are others that choose cheap housing over clean air. If you choose cars that get a lot of miles to the gallon over power and speed, there are others that choose power and speed over getting more miles to the gallon. And so on and so forth. Different people prefer different things. Markets are used to negotiate these differences to maximize happiness and utility.
  
  In other words many reviewers don't know what they are talking about and do not understand economics. They don't understand that preferences for recycling are not shared by everyone. For them, that's okay- they'll impose their preferences through legislation, mandating recycling. This decreases the overall wealth of society because this legislation denies people the opportunity to negotiate, maximizing happiness and productivity. The legislation categorically declares recycling superior always, in every situation.
  
  Economics is not counter-intuitive as many write. It merely shows that by using a little common sense, what we perceive as intuitive is really just bias and myth that we've learned throughout our life.
  
  Now that my rant is over, I'll review the book. Landsburg begins the book "Most of economics can be summarized in four words: `People respond to incentives.' The rest is commentary." That's the whole book in a nutshell. Incentives matter. Change the incentives and people change their behaviors. Landsburg illustrates this with many stories such as seatbelts cause accidents. They do this because people feel safer driving a car, so are less attentive to their driving, so have more accidents.
  
  I think this book stands out from many other popular economics books because it goes more deeply into the typical topics. Also, the book contains topics not normally found in popular economics books, like the Coase Theorem. I had to reread this section because the Coase Theorem was difficult for me to grasp.
  
  I highly recommend this book. It's not always an easy read, but it is enlightening.
  
  
  
• Worst book I've entirely read
  By A2EW4B8N2LS2TC on 2007-01-13
  I've come across some bad books that I couldn't finish. I've come across some good books that I couldn't put down. Landsburg's Armchair Economist was good enough to keep reading, to the point that I read the whole thing, but in the end it was the worst book that I've entirely read.
  
  Only about half the content was worth reading. The editor was a genius in that he cut up all the material and put one good paragraph after every bad paragraph. The result is that the materially is perpetually choppy, and you can't remember the details of any one story he told. As long as you finish one paragraph and start a new paragraph, you can never definitively say you must stop reading right now. Then, by the time you read the last chapter--done!
  
  Oh yeah, and if you're looking for answers to those questions that are splashed across the cover, such as "Wouldn't they sell more popcorn if they charged less?" Forget about it. I'll spoil it for you. He doesn't answer the question at all. In fact, he answers very few questions. He just raises more questions, such as:
  
  - Why is he still holding a grudge against his child's elementary school teacher?
  - Why does he hate people without economic training?
  - Is his love for economists a healthy love?
  - Has he ever researched or discovered anything on his own? Or his job to interview other economists at lunch and report his findings?
  
  In summary, the author manages to illuminate the typical ("bad" to use his own terminology) economist's thought processes on various topics. He asks a lot of unrelated questions he never answers. He preaches his viewpoints. He pats himself on the back. And he kicks a lot of monkeys along the way.
  
  
• Bad economics, bad writing, or both?
  By A2R504QEK5URRL on 2007-12-15
  Before I review the book, I have to provide a digression (I have to lay down these foundations before I can critique the book): There is nothing wrong with economics, it is a beautiful social science (I am a Ph.D. student in economics myself). What one has to bear in mind is that economics explains certain aspects of human behavior and how society works, it is a science, but not one without bounds. When applied methodically and correctly, it gives powerful insights in the subjects it studies. But one must understand that it is not without limitations, to name just a couple: economics is the study of "homo economus", it is by definition anthropocentric. I am not saying this is right or wrong, but certainly there are people who do not share the same view (environmentalists may think, for example, other species have rights too); another foundation of economics is that people are rational, but even economists admit that under certain conditions humans can be "unpredictable" or appear "irrational", and their preferences can be unstable (e.g. see Richard Thaler's works).
  
  Now back to the book. Landsburg labels himself as a libertarian economist, and he takes such doctrine as "free market" as religion. It is true that under perfect competition, low transaction cost, etc., free market will achieve the most efficient allocation of resources. However, we must not forget that the real world is full of obstacles to competition and transaction costs can be forbiddingly high. But though Landsburg claims that he is trying to apply economic principles to "real world" problems, but more often than not, he retreats into the simplistic assumptions of first year college microeconomics.
  
  Parts of the book are simply bad economics. For example, when one reader complains about the quality of air is getting unbearable in the city he lives, Landsburg comments: the fact that he did not move away proves that he is indifferent (between living there and moving away) after all (I actually couldn't locate this in the book at the moment, but I am pretty certain he said something along that line), completely ignoring elasticity (people are not perfectly mobile and can't just move from one city to another on a whim) and transaction costs.
  
  Parts of the book are bad writing. I've read the chapter about popcorns at theaters at least 3 times, to date I am still trying to figure out what he tried to say. Also as other readers point out, his arrogant and snobbish attitude permeates the whole book. He sounds like as if he's the only one who knows the answers to all the questions of the universe. Anyone who does not accept his logic is simply branded "unscientific". One gets the impression that Landsburg is not just impatient, but also a deeply insecure person.
  
  Parts of the book are not easy to tell whether they are bad economics, bad writing, or both. For example, in Chapter 7, he says that he is not sure why he spends a 3 cents worth of effort to grab a one-dollar bill. I understand that the whole chapter is about cost-benefit analysis, but to say that he "is not sure why" is misleading to say the least, because his private gain from this action is 97 cents so it makes perfect sense to do so. I am sure Landsburg actually understands this, but the way he tells the story is just a bad presentation and will make the layman scratch his head (as Landsburg puts it himself): are economists really so "dense"?
  
  Landsburg's attitude toward environmentalism and conservation is appallingly ignorant. He calls environmentalism "the religion of ecology" to imply how unscientific it is, but his own stubborn hatred toward the environment (not just environmentalism) and single-minded faith in libertarian economics are not a shred less unreasonable or zealous than any religious beliefs. I don't consider myself to be in the environmentalist group, and certainly extreme environmentalism has its pitfalls. But from Landsburg's writing, it is apparent that he never bothered to read the other side's arguments at all. For example, he says that if "you want large forests, your best strategy might be to use paper as wastefully as possible" (yes, he actually said "wastefully", chapter 24), but that is assuming people strictly care about the number of trees, and not the composition (diversity of the biota, native species vs. introduced species, etc.) of the ecosystem, not to mention the disturbance, distress and destruction logging can cause to the environment. To an environmentalist, a coastal Californian redwood surviving from Aristotelian times may well give her more "utility" (to use economists' jargon) than newly planted timber crop from lumber companies. It is pretty clear that Landsburg has not the faintest idea about these issues. In the same chapter, he also suggests that "we can pick up a lot of valuable knowledge by wiping out a few species to see what happens", well, have we humans been doing that for, uh, the last few centuries? Need we count the number of species that have been wiped out and are being wiped out everyday? Have we not learned anything yet? (certainly not Landsburg).
  
  Actually, one should not equate Landsburg with the word "economist". Fortunately for us, there are other economists with more reasonable, patient and perhaps humble minds. For example, for the topic of environmental economics, I suggest the reader (and Landsburg) read John Krutilla's "Conservation reconsidered" for a more sophisticated and reasoned argument about conservation.
  
  
  
  
• politicization is in the beholder's eye
  By on 2004-02-07
  The criticism of this book seems to be largely based on the feeling that rational economics leads to unsatisfactory political conclusions and even possibly that rational economics is itself a suspect theory.

  My take is that this is a pretty fun read that illustrates some basic economic concepts via common examples. True, it is not comprehensive and the arguments presented are neither completely thorough or precise. But then again, that's not what I'm looking for from a book about economics with the word "armchair" in the title.

  Anwyway, if rational economics isn't a good model, what is? Central planning? Keynesian economics? European socialism?

  The criticism here is of a worldview, not this book. It should come as no surprise that to those whose political views tend to conflict with rational economics, this book is threatening and must indeed seem highly political. But imho, the political agenda is in the eye of the beholder. When you point a finger, there are 3 pointing back at you.

  Quit picking a fight about epistemology with a country pastor.
  
  

• Thoughtful, but devoid of detail
  By AUW1550RWGI03 on 2002-08-09
  Landsburg's book should be entertaining for economic neophytes. His style is a bit questionable, in that he can occasionally be found lost in self-argumentative circularism without resolve. I found David D. Friedman's book 'Hidden Order: The Economics of Everyday Life' a more valuable book. As a singular example, his discussion of the price of popcorn in theaters seems, intuitively, better than Landsburg's.

  What is particulary amusing about economists, in general, is their intractable belief that people make rational decisions. A recent body of thought, behavioral economics, would argue against that as a certainty. Dr. Kent Hickman et al. (Gonzaga University) published an interesting study on this topic in a Harvard edited journal, which examined bidding on the game show 'The price is right'. It's not difficult to read, but may require a search at a university library to find it.

  Economics can be fun, and conceptually at least, isn't beyond the understanding of the common man.
  
  

• It could have become a good book if it was not for...
  By A1QQHDZQ7GQZ3W on 2006-10-06
  I started reading this book with great expectations as well as enthusiasm but after a number of chapters I became more and more disenchanted.
  I do agree with the other reviewers that the author does sometimes manage to do a good job of explaining to non-economists how economic reasoning works, but in the end one does get rather fed up of his rather narrow minded belief that the only correct way of explaining everyday life is to implement, in his words, the discipline of Economics". I do not want to discuss all the topics he covers - this has been adequately covered by other reviewers but would like to pick out a few examples where the author clearly does not practice what he preaches. He then suffers under credibility, which does make me tend to undervalue his arguments over topics which may otherwise be totally logical and true.
  He is not tired of constantly repeating how moral-free economical theory is, but the ironic part is that he can not refrain from including implicit moral judgments himself. A typical example of his attitude is most clearly evident in the last chapter over the Science of Economics versus the Religion of Ecology. He may be right in ranting and raving against radical environmentalists but he is very ill advised in underlining his arguments with:
  1) A seemingly poor knowledge over ecology. He seems to believe/assume, for example, that the inferior mono-cultural forests planted today for future logging can safely be compared with, and are a proper substitute for, the rich, ecological diverse and healthy forests occurring in nature.
  2) A blatant mistaking of real tolerance with selfish apathy and indifference as displayed so clearly in his own example, where he professes disinterest for a newly discovered species of monkeys which may be safely driven to extinction on the dubious premises that they in no way enriched his life in the past. This is just cynical and cheap polemic and not an example for tolerance towards other view points. In this case I would personally rather side up with those so called radical but at least ideological environmentalists, even though I do not myself agree with many of their ideas.
  3) Showing very poor taste in conceitedly including a letter he once wrote to a preschool teacher (who is now not in a position to defend herself) after first arrogantly dismissing the chance to discuss the issue/problem with her personally. If the issue is really so important to be included in a book, then it should also have been important enough to discuss at the time it arose. Any opinionated views, petty mindedly submitted in this chapter only undermines his self-righteous and smug chain of arguments (exactly the kind of behavior he wanted in fact to prove for the environmentalists themselves).
  
  In summary: Many views in this book are not that suitable for an Armchair Economist" but rather more for a belligerent drunk arguing in a bar.
  
  
  
• The excerpt is fantastic . . . and that's about it
  By A3B33BT16TPTPE on 2007-02-15
  I read the excerpt and the chapter titles and thought this author is brilliant! When I actually read the book, it was horrible. The author summarizes everything by saying, everything balances itself out because the market will revert to where it's supposed to be. For example, if everyone received a $1 increase in salary, then no one would be ahead of the game. He applies this theory to every topic that is previewed in the book.
  
  I had huge expectations which the book did not deliver. It's been a pain to just finish the book.
  
  
• Engaging and Delightful! Simplistic and Naive!
  By AT3HYDOJZ9FXA on 2002-07-25
  The first time I read this book I enjoyed it. I liked its flowing prose and delighted in its plausible explanations of puzzling economic phenomena.

  The second time I read it I found it almost infuriating in its naivete. His focus on individual consumer preference and dismissal of other factors result in a dismal science indeed.

  Applying Landsburg's framework to an extreme example, we might find slavery to make perfect economic sense. The buyers and sellers of the "commodity" would simply be expressing their preferences via prices and transactions. Of course, in this case, human suffering is left out of the equation. So in many of Landsburg's examples, something is invariably missing from the equation.

  Landsburg is especially passionate in his denouncement of environmentalism as "a force-fed potpourri of myth, superstition, and ritual". Perhaps he did personally encounter this debased version of environmental, but he must not have looked very far for another kind. His mistake is in making the colonial assumption that natural resources are free and endless. This may have seemed a natural mistake for Adam Smith, but it's inexcusable for Landsburg writing in 1993. His model of "Grimyville" and "Cleanstown" takes a different turn once health costs and cleanup costs are added to the equation.

  Apart for his environmental blind spot, Landsburg also fails to discuss Econ 101 topics such as externalized costs, the tragedy of the commons, and the principal-agent problem.

  The difference between my first and second readings was five years of living in the real world. This book might be great for late night discussions in the freshman dorms, but will eventually ring hollow once reality sets in.

  P.S. Since I will be trying to sell my used copy of the book, does my negative review demonstrate irrational behavior?
  
  

• So this is economics
  By on 2000-06-28
  I have never taken a course in economics, and I recently decided that I should learn something about it. The Armchair Economist is the first (and so far only) economics book I have read. Overall, I am glad I started with this book.

  Professor Landsburg states that many lunch time conversations with fellow economists concern what they consider to be interesting puzzles in economics: Why does popcorn cost so much at a movie theater? Why do grocery stores print coupons rather than just lowering the price? What happens if the government forces a plant to stop polluting? This book discusses these and other topics in a way that is easy to follow, and depending on your sense of humor, quite funny. (Landsburg's humor is sort of sarcastic, which I appreciate.)

  Landsburg does not claim to solve this economics puzzles in a real world, that would be much too complicated. Instead, he shows the lay reader how economists attempt to simplify the problem to be able to extract some truth from the situation. For example, he analyzes the effect of factory pollution on land prices, leaving out all other factors (such as public health).

  I especially appreciated the last two essays, "The Iowa Car Crop" and "Why I am not an Environmentalist." Although I don't agree with many of Landsburg's conclusions, I am certainly glad that I started my economics studies with such an insightful, and interesting teacher.
  
  

• An enticing invitation to economic thinking
  By A14FI8SMVMU5PT on 1999-12-18
  Steven Landsburg's book shouldn't be thought of as an economics textbook. It presents no graphs and few conclusions.

  Dr. Landsburg rather presents questions and then a fascinating tour of the mind of a trained economist. He asks his reader first to take the tour and then to use the blueprint and join him in thinking like an economist.

  I have used The Armchair Economist as a supplement to my Advanced Placement Economics classes for two years. My students relish each opportunity to watch Landsburg's mind in action and to join in on the fun. Many of them have purchased copies of the book for themselves. They particularly enjoy sharing discussions about the questions presented with friends and parents.
  
  

• A Great Introduction to the Explanatory Power of Econ
  By on 1998-03-05
  I love this book and use it to teach my undergraduate students in political economy. It shows how a few simple economic concepts can be used to explain more social behavior than any other social scientific perspective. I can't wait for Steven't new book! True to the heritage of Gary Becker, this book extends economic reasoning beyond the traditional substantive boundaries of economics. Check out related titles by Tomassi and Ierulli, THE NEW ECONOMICS OF HUMAN BEHAVIOR, Rod Stark, THE RISE OF CHRISTIANITY, and Anthony Gill, RENDERING UNTO CAESAR, all of which use this type of economic reasoning to explain supposedly "non-economic" behavior.
  
  
• Economics the way it should have been taught to you
  By on 1997-01-30
  Ever wondered whether mandatory seatbelts really save lives ? Why almost everything you buy is priced $X.99 (there's more than psychology to it) ? If the death penalty really has an effect on potential murderers ? Well, if that's the case, this wonderful book is for you. In The Armchair Economist, Mr Landsburg, a teacher at the University of Chicago, uses simple and fun examples to explain some of the most fundamental principles of economics. Read it and you'll understand why deficits may not be that bad after all and, a lot more important, why popcorn is so expensive at the movies
  
  
• Delightfully thought-provoking but uneven
  By A3LXF031ZVHK7Y on 2002-04-23
  "Why do rock concerts sell out in minutes -- couldn't the promoters raise the ticket prices?" "Why does movie popcorn cost so much?" "How much harm is caused by government debt?" "Why is it hard to measure inflation? Output? The rich/poor gap?"

  This book is a series of loosely organized essays about "how economists think." The target audience appears to be people like myself, who are interested in economics, but are not highly trained in the field. It's a good companion to "The Economics of Public Issues," which focuses on real-world illustrations of basic economic concepts. This book focuses on how to approach analyzing the real world for yourself.

  According to the Introduction, many of the essays have grown out of discussions Landsburg had with his regular lunch group ... and what lunches those must have been! Questions are raised, and explanations batted about and critiqued. Assuming that Landsburg is a typical economist, the book succeeds spectacularly in illustrating "how economists think." Many of the essays retain what must have been the original feel of the lunchtime debates (ideas are raised, then criticized, then rejected or refined) -- a form which sheds considerable light upon how economists approach problems. The essay about why economists are sometimes wrong is very enlightening. It describes why economists thought that unemployment and inflation were inversely related -- until government started acting on that assumption, which destroyed the relationship. While I'm not very good at macroeconomics, Landsburg's explanation of this is simple and persuasive, and creates more insights into how the study of economics works.

  As a series of essays, some are better than others. Landsburg slips easily between making arguments about issues to making assertions about issues. Since the target audience is amateurs like myself, it's a little hard for an untrained reader to critically evaluate the assertions, but (after much head-scratching) I think some of them are flawed. Landsburg clearly feels strongly about some topics, and it's possible that when he gets worked up about an issue he loses some of his open-mindedness. The essay on environmentalism beats up on environmentalist excess but provides little in the way of alternatives. (I worked for an environmental group at one point; Landsburg's critiques are largely accurate but veer off-topic and illuminate little.) He ridicules several prominent public figures (Felix Rohaytn, extensively, and several US presidential candidates from 1984-1992) for making statements reflecting economic illiteracy, but fails to address the issue: the public's economic illiteracy would instantly render unelectable a candidate who said the things Landsburg says.

  Still, distilling several years of what must have been stimulating lunchtime discussions into a book which can be read in a few hours is a valuable service. The reading is easy, the topics are accessible (for the most part), and the thinking is clear. Also, since these essays came from leisure time, they successfully communicate some of the joy of studying economic issues.

  The book feels like one long lunch with a great group. The more standoffish, angrier essays were concentrated near the end, so they feel like one guest had had one too many martinis and should go home rather than back to work. But they'd still be worth eating with again.

  (N.B. Landsburg has a monthly column for Slate, if you'd like to sample some of his writing or you liked this book and want more.)
  
  

• A fun, quick read
  By A28224KSEE4NR1 on 2003-04-30
  A very fun, quick read. Slaughters many sacred cows, including the litany of ideas on the environment, deficits, illiteracy, unemployment, dollar-cost averaging, and the use of statistics.

  Many reviewers have criticized the last chapter of his book, which is about environmentalism. It is true to some extent that he is building straw men and tearing them down (though he does asknowledge he is referring to "naive environmentalism"). It is hard to disagree with his conclusion that much of environmentalism has little to do with science and more to do with religious ritualism.
  
  

• Humorous introduction to Economics
  By A1OO0MWJJ1EB41 on 2003-09-14
  This books uses real world examples to debunk some of the common misconceptions and preconceived notions people have about economics. In business school, I used this book to get an overall perspective on the topic to avoid getting lost in the details. A must read for any one who has always wanted to learn more about economics but was afraid to ask....
  
  
• uneven and a little disappointing
  By A1HKFBINJGGQ26 on 2006-10-30
  I'd picked up on this book because the author reviewed another book on economics in the Wall Street Journal - and slyly slipped in a little promotion for his own book. So I looked his book up on amazon, read a few of the posted reviews, and bought it (second hand, of course).
  
  The book was not great, merely all right. There are 24 chapters making varying points about economics, and they could be read independently or even in reverse order. The writing style is breezy and humorous, but the quality is uneven. Some very good chapters, with titles like "New, Improved football, how economists go wrong", and "The mythology of deficits". And also some real clunkers, like "Random Walks and Stock Market Prices: A Primer for Investors."
  
  I was hoping this would be a book I could recommend to normal people for insight into economics (it's not called "the dismal science" for nothing), but I'm sure there are better books around.
  
  DIGRESSION - The best short one volume book on investing and saving is still Andrew Tobias's book, "the Only Investment Guide You'll Ever Need", first written over 20 years ago and most recently updated in January, 2005.
  
  
  

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• The Undercover Economist: Exposing Why the Rich Are Rich, the Poor Are Poor--and Why You Can Never Buy a Decent Used Car!