Bryan Caplan’s latest book Labor Econ Versus the World is a collection of blog posts dealing with practical applications of labor economics designed for the interested lay reader. At first glance the idea seems weird. I personally cannot think of any other pop labor econ book but the execution was very good. Given the vast number of essays included, I cannot go into detail on each one of them but instead will focus on the key lessons derived from the book.
The book has four parts: I) laissez-faire and labor; II) open borders; III) education without romance; IV) the search for success.
Caplan, a professor of economics at George Mason University, goes over labor markets and government regulation, the effects of immigration, the function (the malfunction) of education and the determinants for a person’s income and social class. In covering all these different topics the things that stand out the most are Caplan’s lack of ideological motivation, his impressive knowledge of economics, and how he exposes the faults of conventional “wisdom.”
Someone may say, “Wait a minute, isn’t Bryan Caplan an anarcho-capitalist? How is this book not ideologically driven?”
In the 254 pages I cannot think of an instance where Caplan overtly supports a view because it is libertarian. In fact, he criticizes libertarians who are purely ethically driven and who focus on the economic arguments for who he proposes. Great examples are essays like “What incentives does statistical discrimination give?” and “The Anti-Jerk Law” among others. I believe this—the absence of overt ideology—should be stated since it is the reason many people will be driven away from the book.
Next, I have to congratulate professor Caplan for his excellent refutations of traditional wisdom. There were times while reading the book where I was puzzled about the ideas he was proposing, not because they were wrong but because they were in conflict with what society teaches. Even Caplan knows the contrarian character of the book and references it in the first essay, “Labor econ vs the World.”
The insights presented may appear unfashionable, weird, or too cynical if studied only at the surface. If, though, one sits for a moment to contemplate Caplan’s arguments, he has to at least admire the clear way of thinking—even if he does not necessarily agree with the conclusions. When the book ends, the point is not to say “Hurray! Caplan is the best economist; he is right on everything.”
I myself found some issues where I disagree with Caplan. What should happen is that now you can see the world much clearer from an economic point of view.
The defects of the book are few and do little to decrease its overall quality and significance. One minor issue I had while reading it was that the book’s pace was broken by the occasional scholarly article. These more academic pieces by no means ruin the book, but their technical character breaks away from the book’s popular econ spirit.
An example are the essays on aggregate demand and some of his comments on other scholarly papers. Of course both aggregate demand and interacting with the relevant literature is important, but it doesn’t fit neatly into this book. Overall, however, the book is very accessible to people who are not trained economists.
One more thing that readers have to keep in mind is that this book is more of an introduction to Caplan’s work. There are insights later developed in other works like Open Borders: The science and ethics of immigration, The Case Against Education, and Selfish Reasons to Have More Kids. This should be noted because loyal readers of Caplan may have already read the material presented here.
To sum up, I finished the book in something less than two days so I obviously had fun reading it. It challenged many of my preconceptions about the world and I would recommend it to a friend who is new to economics who wants to learn more.
The post Labor Econ Versus the World: A Review of Bryan Caplan’s New Book was first published by the Foundation for Economic Education, and is republished here with permission. Please support their efforts.