The Darwin Economy: Liberty, Competition, and the Common Good

Front Cover
Princeton University Press, Aug 15, 2011 - Business & Economics - 256 pages
3 Reviews

Who was the greater economist--Adam Smith or Charles Darwin? The question seems absurd. Darwin, after all, was a naturalist, not an economist. But Robert Frank, New York Times economics columnist and best-selling author of The Economic Naturalist, predicts that within the next century Darwin will unseat Smith as the intellectual founder of economics. The reason, Frank argues, is that Darwin's understanding of competition describes economic reality far more accurately than Smith's. And the consequences of this fact are profound. Indeed, the failure to recognize that we live in Darwin's world rather than Smith's is putting us all at risk by preventing us from seeing that competition alone will not solve our problems.

Smith's theory of the invisible hand, which says that competition channels self-interest for the common good, is probably the most widely cited argument today in favor of unbridled competition--and against regulation, taxation, and even government itself. But what if Smith's idea was almost an exception to the general rule of competition? That's what Frank argues, resting his case on Darwin's insight that individual and group interests often diverge sharply. Far from creating a perfect world, economic competition often leads to "arms races," encouraging behaviors that not only cause enormous harm to the group but also provide no lasting advantages for individuals, since any gains tend to be relative and mutually offsetting.

The good news is that we have the ability to tame the Darwin economy. The best solution is not to prohibit harmful behaviors but to tax them. By doing so, we could make the economic pie larger, eliminate government debt, and provide better public services, all without requiring painful sacrifices from anyone. That's a bold claim, Frank concedes, but it follows directly from logic and evidence that most people already accept.

 

What people are saying - Write a review

LibraryThing Review

User Review  - ohernaes - LibraryThing

Robert Frank contends that in a hundred years from now, economists will have recognized Charles Darwin as the most important economic thinker. Darwin was influenced by Adam Smith, but had a wider ... Read full review

LibraryThing Review

User Review  - PaolaM - LibraryThing

There are some aspects of this book I really did not like: most notably, the insistence on the "silver bullet" insight that ranking are what matters most to economic agents. While of course I do agree ... Read full review

Contents

Paralysis
1
Darwins Wedge
16
No Cash on the Table
30
Starve the BeastBut Which One?
46
Putting the Positional Consumption Beast on a Diet
64
Perpetrators and Victims
84
Efficiency Rules
100
Its Your Money
119
Success and Luck
140
The Great TradeOff?
157
Taxing Harmful Activities
172
The Libertarians Objections Reconsidered
194
Notes
217
index
229
Copyright

Other editions - View all

Common terms and phrases

About the author (2011)

Robert H. Frank is an economics professor at Cornell's Johnson Graduate School of Management and a regular "Economic View" columnist for the "New York Times", and a Distinguished Senior Fellow at Demos. His books, which have been translated into 22 languages, include "The Winner-Take-All Society" (with Philip Cook), "The Economic Naturalist", "Luxury Fever", "What Price the Moral High Ground?", and "Principles of Economics" (with Ben Bernanke).

Bibliographic information