I picked up this book with enthusiasm, relishing the idea that economists from the past can contribute to contemporary economic debate. My hopes that this book might provide some original contributions have been largely dashed, as I describe below there are a number of irritants within the pages and it is possible to disagree with some of the points made by Todd G. Buchholz in his descriptions.
There is a superficiality when referring to some issues, nationalisation is dismissed blandly as a mistake by the British government, with no consideration of the circumstances in which it occurred or the deficiencies of the more recent privatisation process.. Similarly the Asian crisis of 1997 had many causes, yet Buchholz perpetuates the illusion that crony capitalism and government intervention are the causes and does not discuss the role of capital markets, the structure of international trade or the damage caused by speculative bubbles. In both cases, the conclusion may be valid but the easy dismissal of the debate is lazy and obscures important issues.
It is natural that an American addressing a US audience should be parochial in his outlook, however, for a reader from the UK the book does begin badly, referring to England rather than Britain which instantly grates. This insularity is reflected elsewhere: the internet is described as a success story of US capitalism. Such a description is excessively narrow in two ways: firstly the internet was first established by military and education bodies as a means of sustaining communications in the event of a nuclear war, its genesis and early development is therefore a story of government action, not the market. Secondly later development depended on the evolution of the World Wide Web as a means of navigation, Briton Tim Berners-Lee is the first of many non-American names which are associated with this latter stage. US capitalism certainly had an important role, but to credit it with the entire Internet is to re-write history.
A further passage which seems almost to have been written with the intention of irritating any non-American readers is the Buchholz Critique (page 41). Here Todd G. Buchholz answers those who point to the success of economies more regulated than the US in terms of huge arrogance, these regulated economies, he says, are able to demonstrate growth at a similar level to the USA because they are relatively small and benefit from the "super-competitiveness" of the American economy, which overcomes the inefficiencies in their own economy, these freeloading countries apparently include Canada and Sweden.
After the introduction, in which most of the irritants above occur, Buchholz surveys the history of economic thought by focussing on the principal economic thinkers from Adam Smith to John Maynard Keynes, then bringing the story up to date by looking at more recent schools of thought, the Institutionalists, Monetarists, Public Choice theory and Rational Expectations theory.
Adam Smith's ideas are recorded clearly, though Buchholz disagrees with those authors (such as J.K. Galbraith) who argue that developments in the several centuries since Smith wrote (such as growth of the corporation, multi-national businesses and international trade) suggest that the theory needs to be developed somewhat.
Thomas Mathus is belittled, his prophecies of global famine having been disproved he is used as an excuse to dismiss environmental concerns, yet so far the free market appears to have no solutions.
Most UK liberals admire the work of John Stuart Mill, yet interpret it by referring to the era in which it was written (Victorian Britain when to suggest any government action was the task of a wild radical). Todd G. Buchholz uses Mill's work to explain and commend the policies of Ronald Reagan in the very different 1980s.
From the foregoing it will be expected the Karl Marx is regarded as both wrong and bad, inspiring disastrous regimes in USSR and China (with no regard to the economic development those regimes achieved from a very poor base). If you want to extract new ideas from these dead economists then a discussion of the way Marx introduced concerns about power into economics could have drawn interesting parallels with the Public Choice school discussed later which is used as a critique of Keynesian economics.
The Rational Expectations school is one recent development discussed and gently ridiculed. The ideas lend themselves to such ridicule but the chapter is a little brief and the subject could have been discussed more thoroughly to good purpose, there are other ideas however which are not discussed at all yet which deserve discussion in any survey of economic thought. Most notably, the Austrian school which highlighted the importance of a dynamic approach to economic analysis in contrast to the comparative statics adopted by Marshall and the orthodox neoclassical tradition, Joseph Schumpeter and his ideas such as creative destruction are of basic importance to any economic understanding. More recent ideas such are the fruitful discussions of evolutionary economists building on the tradition of older institutionalist economists such as Galbraith could also have been included.
So far my review of this book appears rather negative, this impression is unfair because it does provide an interesting look at the history of economic thought and has stimulated my thoughts on the topic (albeit mostly in criticism). The irritants are minor quibbles which another book could have overcome, the US bias is understandable but has led to some distortion. However, the title suggests that Todd G. Buchholz is searching for new ideas from these dead economists, what he has done is summarise their views are already known and illustrated them with modern example, a worthwhile but less interesting project.
To conclude I will recall the comments of John Kenneth Galbraith (in Economists and the Economics of Professional Contentment) who warned that we should be concerned when economists are lauded by their peers. This book has a complementary foreword by Martin Feldstein, is praised in quotes from Milton Friedman and Lawrence H Summers and the author has received prizes for his teaching of introductory economics.
