Why am I passionate about this?
In the early 2000s, I noticed that lots of good American jobs were being lost to China. I was taught in college economics that trade was always win-win and that the government should stay out of the economy. I started reading the literature and found a number of flaws with these free trade and extreme free-market doctrines. The flaws were there in plain sight, but US trade economists, with vanishingly few exceptions, were ignoring them. Not only were the costs to our economy and our workers enormous, but the frustration of American workers with 30 years of failed promises by both parties has made our politics angrier and more divisive.
Marc's book list on US free trade destroyed the us middle class
Why did Marc love this book?
This book makes the novel and, to me, fascinating case that the economy is an evolutionary system that is constantly changing, implying that the static equilibria of conventional trade models are not usefully predictive. It also made it clear to me, from a different perspective, that the industries in which a country succeeds are path-dependent.
If you are a mosquito, the next evolutionary mutation will not produce an elephant. Likewise, it is much easier to design and manufacture 3 nanometer-scale chips if you have already designed and manufactured 5 nanometer-scale chips. This drove home to me how important retaining the key industries of today is for our long-term prosperity.
3 authors picked The Origin of Wealth as one of their favorite books, and they share why you should read it.
Over 6.4 billion people participate in a $36.5 trillion global economy, designed and overseen by no one. How did this marvel of self-organized complexity evolve? How is wealth created within this system? And how can wealth be increased for the benefit of individuals, businesses, and society? In The Origin of Wealth, Eric D. Beinhocker argues that modern science provides a radical perspective on these age-old questions, with far-reaching implications. According to Beinhocker, wealth creation is the product of a simple but profoundly powerful evolutionary formula: differentiate, select, and amplify. In this view, the economy is a "complex adaptive system" in…