University of Michigan economist, Chris House gave recommendations for the two most important economics writings for all Americans to read:
If I could dictate the reading habits of my fellow Americans, I might put Piketty’s Capital in the Twenty-First Century on the bedside table of every conservative but I would put Sargent’s 12 principles on the bedside table of every liberal.
These reading assignments are extremely odd bedfellows. On the one hand, Pikkety’s bestselling book is the culmination of many years of original research and is difficult reading for non-economists. On the other hand, Sargent’s commencement address has to be one of the shortest ever, at 335 words. It is written at the 6th-grade reading level, and contains no new research at all. Here is a comparison of their lengths:
So Chris House wants all liberals to keep a one-minute read on their bedside tables and conservatives to read a massive magnum opus. I’m not sure whether he is trying to insult conservatives or liberals more.
Sargent’s address is just a list of bullet points that are full of misleading statements. For example, one of Sargent’s bullet points says:
In an equilibrium of a game or an economy, people are satisfied with their choices. That is why it is difficult for well-meaning outsiders to change things for better or worse.
Nonsense. First, nobody can prove that the economy is in equilibrium. Secondly, lots of people are unsatisfied with their choices due to unexpected random events or misinformation. If I chose to live in a house that later got flattened by a tornado, I’ll feel some regret and I’ll welcome some help from from well-meaning outsiders. And why couldn’t outsiders change anything “for better or worse”? Try telling that to Donald Trump supporters.
Sargent’s 5th point says,
“There are tradeoffs between equality and efficiency.”
That is perpetuating one of the most harmful and misleading ideologies in economics. There are many policies that increase both equality and efficiency, but economists like Sargent willfully disregard them.
Sargent’s 9th point is:
It is feasible for one generation to shift costs to subsequent ones. That is what national government debts and the U.S. social security system do
This is also misleading, but it requires a longer explanation to detail why.
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