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Cover of book: The Shortest History of Economics

Andrew Leigh
The Shortest History of Economics

How did everything become so unfair? As a child I had a keen sense for the rigged. During family games of Monopoly, frustration mounted until some unlucky roll condemned me to jail and I would flip the board. I have now curbed my Godzilla tantrums but today’s real estate ads are enough to summon the same storm clouds.

Andrew Leigh’s excellent The Shortest History of Economics explains this was the point of Monopoly. Writer Lizzie Magie created The Landlord’s Game to educate players about 19th-century robber barons and the rampant poverty they exploited. How appropriate that Magie was only compensated $500, while the Parker Brothers made millions.

Economics began 5000 years ago in the Indus Valley, where a stable agrarian society used a surplus to “smooth” the peaks and troughs of feast and famine. Monuments require concentrations of wealth, so their absence indicates to anthropologists that this was a fair society. The Ancient Greeks were early adopters of money, and the Grand Canal in China revealed the mutual benefits of trade. With the Age of Sail came slavery and insurance, the latter to dilute the risk involved in dangerous voyages.

Modern economics emerged from the same crucible as the industrial revolution. With the grease and soot of factories came the endless arm wrestle between labour and management, not to mention armaments for the Great War, the ideology of the Russian Revolution and conditions for the Great Depression. A plateau arrived in the postwar welfare state: a high point of relative fairness.

Driven by Milton Friedman’s unremitting faith in the “invisible hand” of the free market, Margaret Thatcher and Ronald Reagan ended protectionism in a binge of privatisation. Leigh’s elegant explanation of the overhyped efficiency gains of privatisation and his comparison between the West’s free market and China’s command economy are both excellent. Today’s financialised global economies have skewered many of the classic shibboleths that imply the consumer is rational and that money can never buy happiness.

Leigh cites Steven Pinker’s work to argue that historically we live in the fairest epoch ever. Over the past 50 years, every continent has seen unprecedented increases in life expectancy, daily nutrition and even IQ. The caveat: it’s all very precarious. In this frame, climate change is the biggest market failure in history.

The Shortest History of Economics should be required reading to any participant in today’s economy – which is everyone. Its inclusion of contributions by overlooked female economists is welcome, as are its brevity and clarity. It’s an asset in a risk-laden, unfair time. 

Black Inc, 224pp, $27.99

Black Inc is a Schwartz company

This article was first published in the print edition of The Saturday Paper on February 10, 2024 as "The Shortest History of Economics ".

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Cover of book: The Shortest History of Economics

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