The Corner

Specialization and Trade

Arnold Kling—the economist, teacher, blogger, and polymath—has a way of cutting through layers of conventional assumptions and laying bare complex realities. He is so adept at doing that, it seems to me, because he doesn’t expect to solve the problems he clarifies, but rather sees that the clarification of questions can itself constitute a large leap toward greater understanding. 

His 2013 book The Three Languages of Politics is a great example of that. The book sheds a bright light on our political life by arguing that progressives, conservatives, and libertarians tend to see political questions as arrayed along three distinct axes: Progressive think about politics along the oppressor/oppressed axis; conservatives think in terms of the civilization/barbarism axis; and libertarians think in terms of the freedom/coercion axis. This makes it difficult for people who incline to one of these three views to quite understand people who incline to the other two, and it leads to a lot of suspicion of motives when in fact pretty much everyone in politics is motivated to do good as they understand it. Try that insight on for a minute as a lens through which to look around at our politics and you’ll find that an awful lot of our debates make much more sense. 

Kling’s latest book, out this week and available practically for free on Amazon, is to my mind his greatest contribution yet. Specialization and Trade: A Re-introduction to Economics, is as ambitious as its subtitle suggests. Kling argues that our understanding of the fundamental character and purpose of the discipline of economics has been distorted by the form that the professionalization of the discipline has taken. Modern macroeconomics implicitly thinks of the economy as a kind of machine that exists to produce GDP. And a great deal of what economists do, for all of its sophistication and impressive mathematics, is a function of that assumption—which is mistaken at its core. He’s not suggesting that economists are simple-minded, only that some deeply rooted metaphors that guide their thinking lead them astray. 

Instead, Kling suggests, we should recover an understanding of the economy as the function of complex patterns of specialization and trade. It’s a simple case, in a sense, and not a particularly controversial one. But if you actually follow its logic through, as Kling does, it can lead you to a powerful alternative approach to understanding some basic economic questions. Among other things it points, I would argue, toward a recovery of Adam Smith’s economic vision—which is far richer than either its admirers or its critics tend to think.  

The book is an extended essay, in the best sense of the term. It will make you look at some familiar subjects anew. Very well worth your while. 

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