Animal Spirits Rule

The conservatives had their Voodoo Economics and now liberals have Animal Spirits. The term Animal Spirits, as an economic concept, originated in the works of John Maynard Keynes in the 1936. Keynes argued that private-sector decisions sometimes produced inefficient outcomes, even unemployment. Well conservatives don’t usually hold to that view at all–thus the ongoing words between liberal and conservative camps.

Well, I may have simplified the conservative/liberal argument over macro-economic theory and the causes of the last recession too much, but simplified sound-bite sized arguments seem to be the style these days. While politicians seem to favor sound-bites, talking points and overly simplified political “solutions”. Economists, on the other hand, rarely seem to demonstrate any similiar need for brevity.

As my library clean up continues, I’m looking now at a stack of 9 popular economics books, most of them recently purchased as I tried to understand the 2008 housing/banking collapse.

The top book of the stack, authored by UC Berkeley economist Akerlof  and Yale economist Shiller, is  Animal Spirits—How Human Psychology Drives The Economy. And Why It Matters For Global Capitalism. This short book with a long title argues for the Animal Spirits side of the economic spectrum. Basically, the authors propose that economic models need to be more robust and should not rely on either a large group of consumers to behave rationally or a large group of businesses to try to maximize profit.

The other books include some pretty thick ones and most have a full table of contents, copious footnotes, bibliography and index. The indexes were helpful in searching for topics, but there was a lot to scan as I looked for ideas. At times, the WWW and wiki are more useful than books. As a lot, these books could be good candidates for electronic book production—at least one of them was digitally typeset using the readable Adobe Galliard font. This type of book converts to eBook format nicely.

As an aside I should admit that none of my books profess any support for Voodoo Economics but a few give qualified support for supply-side solutions. I figure that living through two supply-side presidencies is enough—I don’t need to buy books about the theory also.

I’d deaccess this whole lot of books, but two small books are candidates to remain in the library. The first is by Paul Krugman who is a New York Times columnist and blogger as well as a winner of the Nobel Prize in Economics. His book The Return of Depression Economics and the Crisis of 2008 is the clearest exposition of the factors leading up the crash of 2008. I’ll keep this book to remind me of the economic effects of group over-optimism. I recommend following Krugman on and the NYT.

The other book is by James K. Galbraith: The Predator State: The Conservatives Abandoned the Free Market and Why Liberals Should Too. The long title says it all, but the author’s argument is clear, precise and easy to follow. The book is a keeper.

Both of these books are available in ebook format, but I’ll keep my hardbound copies—I still like the feel of a “regular” book. Animal Spirits was interesting, but I can do without it in the library. It is also sold as an ebook,

This removes 8 more titles from the library.
The deaccession count: Posts 16, Books 87.



About carto

Retired software engineer who grew up in Montana, went to Montana State College in Bozeman, and moved to California to work at Stanford Research Institute (SRI). Carto's Logbook is about photography, travel and adventure; Mt. Maurice Times is tall tales mostly biographical; Carto's Library is about books I've read and liked.
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