The Economists Hour: False Prophets, Free Markets, and The Fracture of Society by Binyamin Appelbaum (2019)

Appelbaum’s book, The Economists Hour, is the latest in a long line of books questioning free market economics. The Economists Hour is a noteworthy addition since, unlike other critics, Appelbaum notes what economists have gotten right and he just does not criticize free market economists, but the profession in general. Indeed, critics of free market economists note that economics, as a profession, is far more free market than critics and commentators recognize. There was very little difference between John Maynard Keynes and Milton Friedman on stimulating the economy; one preferred the fiscal and the other monetary. In fact, Friedman praised Keynes as an economist, noting that on macro matters he was vastly superior to Hayek and Von Mises. In fact, at a convention of free market economists, Friedman stated unequivocally that Keynes was the better economist. Appelbaum’s book is well-written and erudite. At telling a story, Appelbaum succeeds brilliantly. In fact, his book could be seen as a rebuttal to Daniel Yergin’s and Joseph Stanislaw’s book, The Commanding Heights. Appelbaum’s book was written after the financial crash of 2008, a crash that has eroded confidence in markets worldwide and has begun the process of eroding confidence in the post-war consensus. At its best, the book has some extremely insightful and thought-provoking points. Unlike other writers, Appelbaum attempts to strive towards even-handedness. For example, he notes that Friedman’s ideas caused the 2008 crash, but also prevented a prolonged depression. Another strength in Appelbaum is that he asks the correct questions, for example, has economics placed us in a bad position. Mostly, I respect Appelbaum’s willingness to attack a profession with as much prestige as economics. While economics is no longer the imperial science of my early adulthood, it remains the crown jewel of social science, in that economist’s opinions still matter more than those of psychologists and sociologists. Unfortunately, Appelbaum’s book is flawed. In fact, Appelbaum’s paradoxical idealistic cynicism limits his judgement. For example, Appelbaum writes that economics have threatened democracy. This is an idealistic viewpoint. The United States has never been a democracy. It has always been a republic. I would also suggest that Appelbaum would probably disapprove of many policies that the people would support. Afterall, Donald Trump was elected President and the public supports tax cuts. He is also cynical in that he fails to recognize changes in economic theory - at one-point central planning and price controls were good economics. But thanks to Hayek and Keynes(!) we went with a more market approach. One wished that Appelbaum consulted the work of Alan Brinkley to discover how far liberalism left central planning because of the experience of World War II. Also, Appelbaum cannot understand that even free market economists believe in the welfare state. Take Hayek, one would assume that he would oppose social security, welfare, social insurance, environmental protection, protection from fraud, and certain production standards. But he supported each. Friedman supported the federal withholding tax and a universal income scheme. In fact, economists of nearly all stripes have opposed price controls and have let the market use prices to coordinate and signal abundance or shortages. Looking at left-wing or salt-water economists, such as Paul Samuelson or even a young Paul Krugman, one would be shocked how much they embraced free market viewpoint. Whether or not a country is free market is not a dichotomous choice, rather it is a range. A completely controlled society, like North Korea, makes South Korea appear like a completely open society. This is an economics book written by someone who does not understand economics - for example, his chapter on …