Monday, July 21, 2014

Jevons, The Mystery of the Invisible Hand

Wittgenstein, a passionate reader of detective stories, famously said that “more wisdom is contained in the best crime fiction than in conventional philosophical essays.” Marshall Jevons’ The Mystery of the Invisible Hand (Princeton University Press, forthcoming September 7) may not measure up to Wittgenstein’s lofty standard since it imparts knowledge rather than wisdom, but it’s still a worthwhile, enjoyable read.

Marshall Jevons is the pen name of William L. Breit and Kenneth G. Elzinga, professors of economics at Trinity University and the University of Virginia. They write mysteries that mix economics lessons with murder. I’m not sure what this hybrid genre is called, but let me—for lack of a better term—dub it didactic detective fiction. The reader learns some basic principles of economics as he sorts through motivations for murder. In this case, the Coase conjecture takes center stage.

This is the third Henry Spearman mystery. The fictional Spearman, a professor of economics, is the incarnation of Kenneth Arrow’s (somewhat dubious) statement that “an economist by training thinks of himself as the guardian of rationality, the ascriber of rationality to others, and the prescriber of rationality to the social world.”

Spearman speaks the language of economics: “That doesn’t seem to fit any rational cost-benefit analysis” and “… everybody’s better off, no one’s worse off. Sounds Pareto-optimal to me.” He explains to his dismissive neighbor: “… the term ‘dismal science’ was coined by Carlyle, and he didn’t mean that the subject was dismal to learn. Carlyle disliked economics because he saw free markets as a threat to the social structure in England that kept blacks and others in their place. He was a bigot who worried that a market economy would reduce the authority of the English ruling class.” And he thinks such unromantic thoughts as “In his case, marriage was a husband and wife having interdependent utility functions: one spouse deriving more utility by increasing the utility of the other.”

Economics is central to solving The Mystery of the Invisible Hand, but inevitably it also gets in the way of free-flowing prose. I suppose that’s just the nature of the hybrid beast. Still and all, for anyone wanting to nail down some basic principles of economics, and have fun doing it, it’s a “rational solution.” It would make superb supplementary reading for an introductory econ course.

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