The Price of Everything – A Parable of Possibility and Prosperity

Won't say much about what's inside. But if economics as an academic subject terrified you or sort of left you indifferent, here's a book that'll thrill you.

Russell Roberts is a masterful educator and proves himself brilliant in the rediscovered art of the parable. Teaching through storytelling is an easy and compelling way to learn that should be more broadly used across a range of subjects. Reading an economics textbook is hard and, because I am not particularly engaged, I tend to forget much of the content quickly. Reading a novel is easy and I'll bet I remember the lessons in this one forever. Other books like The Phoenix Project (https://www.amazon.com/Phoenix-Project-DevOps-Helping-Business/dp/0988262592) and The Goal (https://www.amazon.com/Goal-Process-Ongoing-Improvement/dp/0884271951/ref=sr_1_1?s=books&ie=UTF8&qid=1472521367&sr=1-1&keywords=the+goal) use a similar technique well and I would love to see more educators use the same technique.Thankyou, Dr Roberts for making the world a better place.

You've likely heard of the pop economics genre, but did you know that there is econ-fiction too? Perhaps econ-fiction is a merely a branch of pop economics, but either way, it makes for a great way to teach basic economics to inquiring young (and old) minds alike. And as far as I'm concerned, Russ Roberts (a professor at George Mason University) writes some of the most powerful didactic fiction about economics around.His book, The Price of Everything, is a parable that engages readers and nudges them to think deeply about the economic concepts that we encounter in our everyday lives. The two main characters in the story are Ramon Fernandez, a budding tennis prodigy who is studying at Stanford, and an economics professor named Ruth Lieber. At one point in the story, Professor Lieber poses the following question: "Don't you think it's strange that in America, the country where the greatest economic revolution in history has taken place, the average citizen has no idea why we're richer?" I would add that it's not only strange, it's very strange. Attempting to answer this question in intelligible and non-dull terms was (I suspect) Roberts' impetus for writing this book.At the beginning of the story, we learn that an earthquake has just rocked the Bay Area. In the wake of the disaster, Ramon and his girlfriend are on a quest to purchase some flashlights. Ever the champion for social justice, Ramon becomes outraged to find out that Big Box (a fictional mega-store) is selling flashlights at double the price of a Home Depot, which is fresh out of flashlights. While waiting in line to purchase the pricey flashlights at Big Box, Ramon becomes distraught when he sees a poor woman waiting in line who realizes that she can't afford baby food and diapers because of the store's post-disaster price hike. She only has $20, but needs $35 worth of food and diapers. Ramon asks: "How could she have known that Big Box would gouge her with doubled prices?" We then learn that Ramon collects money from other store patrons and is soon using a megaphone in front of the store to rile people up about this perceived injustice.Not long after this debacle at Big Box, we learn there is a planned protest against Big Box on the Stanford campus. This is where Ramon meets Ruth Lieber, a university provost and economics professor. They chat about the protest and slowly end up developing a relationship that unfolds throughout the rest of the book. The economic lessons contained within the book largely play out through their many conversations.In one such lesson, Ruth explains to Ramon how free-market price signals allow an economy to operate more efficiently than centrally planned ones. She goes on to elucidate (in a Hayekian vein) about the knowledge problem in economics, which Friedrich Hayek himself put this way: "The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design."At one point in the parable, Professor Lieber is in the middle of a discussion with Ramon and we get the sense that she's feeling a bit rattled by a questioning Ramon. She collects herself and then shares some profound wisdom about economics by saying the following: "Oscar Wilde said that a cynic is someone who understands the price of everything and the value of nothing. Clever people like to say the same thing about economists, as if we were soulless calculators in green eyeshades, obsessed with prices and money. We're mercenaries, it is said, weighing costs and benefits down to the last penny. But economics is not about prices and money. Economics is about how to get the most out of life."If there is only one thing to learn from this book (or about economics in general), I believe it is this last point. The beauty of Roberts' writing (and his podcasting) is that his ideas get in your bones. Accordingly, I highly recommend this book to anyone interested in learning about the dismal science, I mean economics.

This is a book difficult to take seriously, for reasons large and small. It is clunkily written, with long monologues from the protagonist, Stanford University provost and emeritus economics professor Ruth Lieber, "lecturing," in an avuncular way, her economics students and Ramon Fernandez, a Cuban refugee cum tennis phenom cum Stanford Univ. student.It's like Plato's Socrates, except the interlocuters (Ramon and her economics students) are unquestioning and rather dull, and are having their eyes opened by Lieber's Hayek-infused economic vision of the world. For example, when Lieber is "schooling" Ramon on how much better poor people have it today than 100 years, and implicitly telling us (the reader) not to worry about economic inequality, Ramon responds: "Cuba's not as rich as America. I'll grant you that. But it's a fairer society. There aren't people like Bill Gates or a bunch of Wall Street types living off everyone else."This is straw-man argumentation (by Mr. Roberts) of the worst sort. Free market or Cuba. These are your choices. Regulation or the beauty of the free market. Free speech or political prisoners. As an aside, the Stanford University students come off as incredibly naive (almost inane), as Ramon's response about "Bill Gates" shows. If I was a Stanford alum, this alone would make this book laughable.Lieber see the putative beauty of free market everywhere, even in nature (or God). In other words, Mr. Roberts is a so doctrinaire that he infuses the free market with a quasi-spiritual nature. Nonsense.Lieber's blinkered view of the world is at odds with reality, because as we know there is no such thing, really, as the free market. Government picks winners and losers, lobbyists write bills that favor their paying customers in industry, corporations prefer regulations that make barriers to entry difficult to hurdle, and the concentration of industries (see, e.g., the mattress industry) converge toward cartel. Roberts describes an America that does not exist.But it's not even the big stuff Roberts gets wrong. (Roberts, not coincidentally, teaches at George Mason Univ., which has economics department that only Milton Friedman could love (and, not surprisingly, is in love with the "Chicago School" of economics, see Hayek veneration).The small details show that Roberts is simply out of his league as a putative novelist and out of touch. Heavy Weather, a Berkeley activist/radical, etc. is the villian of the book. When we learn that Heavy Weather is going to "use" Ramon to stage a protest against the Big Box Corporation (think Wal-Mart, Home Depot and Costco all rolled into one), Roberts tells us that Heavy Weather's email listserves are filled with talk of, e.g., deconstruction, despite that fact that Derrida has not be de riguer in humanities departments in literally decades. One gets the feeling that Mr. Roberts doesn't leave the economics department very often or speak with anyone who hasn't drank his Hayekian kool-aid.More than that, we are supposed to swallow that a world-class tennis player (Ramon competed in Wimbledon) is playing for a scholarship rather than making millions of dollars as would be the case in real life. It is ironic that in this tale of the beauty of the free market, one of the central characters is defying the "rational" man Mr. Roberts is so devoted to.In sum, this book is borderline propaganda, and like most propaganda, it is poorly written. Tyler Cowen owes all of us who read his blog a mea culpa for blurbing this book. Mr. Roberts, for his part, needs to stick to writing papers for AEI and Heritage and quit the literary genre.

Around halfway through this book, one of its two main characters asks the other, "Don't you think it's strange that in America, the country where the greatest economic revolution in history has taken place, the average citizen has no idea why we're richer?" Amazing question, and this book was written to give the average citizen an easy way to understand the main driver of our country's wealth. It succeeds masterfully.The reason a book like this is necessary is that most people don't understand how a society or country becomes wealthier. As this book clearly demonstrates, most peoples' ideas on how to make citizens better off would be counter-productive, actually having the opposite effect.Without dismissing the ideas and feelings of people who don't typically support free-market solutions to humanitarian challenges, Roberts makes a compelling and easy-to-understand case for the superiority of the free-market in achieving those goals. It's powerful, often counter-intuitive stuff. I believe that if our country is going to have a future as bright as its past, more people will need to be exposed to this type of thinking so they can vote for candidates who will make solid decisions regarding our economy and our future.The thinking and explanations in this book are wonderful. It gets four stars rather than five because the fictional narrative is painfully stilted and hokey, but please don't let that stop you from reading this book. It will painlessly teach you things that can be very hard to learn. Besides, the hokey narratives are really part of Robert's charm.Any voter who wants to become better at helping their country to become better off in the future should read this book to help them get a useful framework for evaluating the proposals of candidates. Highly recommended.

Reading through Russell Roberts tale of the Big Box store and the campus crusader I was often tricked into thinking I was reading a full blown novel. "The Price of Everything" is a novel, but it's also a dialogue of economics discussions played out through the characters Ramon Fernandez, a Stanford student and tennis star, and Ruth Lieber, an economics professor. The economics seemed just a part of the story, with the exception of chapter 7(which goes heavily into the economics of egg production). Roberts through the conversations of Ruth and Ramon does an excellent job of framing discussion of prices, a subject that is often subject to counterintuitive ideas. I think the example that stands out is when Ruth is discussing with Ramon the price of flashlights, and why the Big Box stores price gouging might have been a good thing, because a high price signals others to conserve.The example played out in my own life not long after reading this book. I was standing in line for a United Airlines flight when myself and others found out that they would be charging $15 for baggage and extra if it was overweight. My first reaction was Ramon's, that I couldn't believe they were doing this, but then the idea came that maybe this would lower airline fares, if people brought less baggage and thus used less fuel. I felt like Ruth Lieber.