1、Economics: A Very Short IntroductionVery Short Introductions are for anyone wanting a stimulatingand accessible way in to a new subject. They are written by experts, and havebeen published in more than 25 languages worldwide.The series began in 1995, and now represents a wide variety of topicsin his
2、tory, philosophy, religion, science, and the humanities. Over the nextfew years it will grow to a library of around 200 volumes a Very ShortIntroduction to everything from ancient Egypt and Indian philosophy toconceptual art and cosmology.Very Short Introductions available now:ANARCHISM Colin WardAN
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7、s Partha DasguptaPartha DasguptaECONOMICSA Very Short Introduction13Great Clarendon Street, Oxford ox2 6dpOxford University Press is a department of the University of Oxford.It furthers the Universitys objective of excellence in research, scholarship,and education by publishing worldwide inOxford Ne
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9、Turkey Ukraine VietnamOxford is a registered trade mark of Oxford University Pressin the UK and in certain other countriesPublished in the United Statesby Oxford University Press Inc., New York Partha Dasgupta 2007The moral rights of the author have been assertedDatabase right Oxford University Pres
10、s (maker)First published as a Very Short Introduction 2007All rights reserved. No part of this publication may be reproduced,stored in a retrieval system, or transmitted, in any form or by any means,without the prior permission in writing of Oxford University Press,or as expressly permitted by law,
11、or under terms agreed with the appropriatereprographics rights organizations. Enquiries concerning reproductionoutside the scope of the above should be sent to the Rights Department,Oxford University Press, at the address aboveYou must not circulate this book in any other binding or coverand you mus
12、t impose this same condition on any acquirerBritish Library Cataloguing in Publication DataData availableLibrary of Congress Cataloging in Publication DataData availableTypeset by RefineCatch Ltd, Bungay, SuffolkPrinted in Great Britain byAshford Colour Press Ltd., Gosport, HampshireISBN 97801928534
13、5513579108642ContentsPreface xList of illustrations xiiiList of tables xivPrologue 11 Macroeconomic history 142 Trust 303 Communities 644 Markets 725 Science and Technology as institutions 906 Households and firms 1007 Sustainable economic development 1178 Social well-being and democratic government
14、 139Epilogue 158Further reading 161Index 163PrefaceWriting an introduction to economics is both easy and hard. Itseasy because in one way or another we are all economists. No one,for example, has to explain to us what prices are we face themevery day. Experts may have to explain why banks offer inte
15、rest onsaving deposits or why risk aversion is a tricky concept or why theway we measure wealth misses much of the point of measuring it,but none of these is an alien idea. As economics matters to us, wealso have views on what should be done to put things right when wefeel they are wrong. And we hol
16、d our views strongly because ourethics drive our politics and our politics inform our economics.When thinking economics we dont entertain doubts. So, the veryreasons we want to study economics act as stumbling blocks even aswe try to uncover the pathways by which the economic world getsshaped. But a
17、s economics is in large measure about those pathways its as evidence-based a social science as is possible it shouldntbe surprising that most often disagreements people have overeconomic issues are, ultimately, about their reading of facts, notabout the values they hold. Which is why writing an intr
18、oductionto economics is hard.When I first drew up plans to write this book, I had it in mind tooffer readers an overview of economics as it appears in leadingeconomics journals and textbooks. But even though the analyticaland empirical core of economics has grown from strength tostrength over the de
19、cades, I havent been at ease with the selectionof topics that textbooks offer for discussion (rural life in poorregions that is, the economic life of some 2.5 billion people doesnt get mentioned at all), nor with the subjects that areemphasized in leading economics journals (Nature rarely appearsthe
20、re as an active player). It also came home to me that OxfordUniversity Press had asked me to write a very short introduction toeconomics and there are economics textbooks that are over 1,000pages long! So it struck me that I should abandon my original planand offer an account of the reasoning we eco
21、nomists apply in orderto understand the social world around us and then deploy thatreasoning to some of the most urgent problems Humanity facestoday. Its only recently that I realized that I would be able to do thatonly if I shaped the discourse round the lives of my two literarygrandchildren Becky
22、and Desta. Beckys and Destas lives are asdifferent as they can be, but as they are both my grandchildren, Ibelieve I understand them. More importantly, economics hashelped me to understand them.The ideas developed here were framed and explored in my book, AnInquiry into Well-Being and Destitution (O
23、xford: Clarendon Press,1993). While writing that book I realized that economics hadincreasingly driven my ethics and that my ethics in turn hadinformed my politics. As that is an unusual causal chain, the earlierbook was more technical and a lot heavier. Theoretical andempirical advances since it wa
24、s published have led me to hold theviewpoint I advanced there even more strongly now. I understandthings much better than I did then including why I dontunderstand many things. The present work is a natural extension ofmy earlier book.While preparing this monograph I have benefited greatly fromcorre
25、spondence and discussions with Kenneth Arrow, GretchenDaily, Carol Dasgupta, Paul Ehrlich, Petra Geraats, LawrenceGoulder, Timothy Gowers, Rashid Hassan, Sriya Iyer, PramilaKrishnan, Simon Levin, Karl-Gran Mler, Eric Maskin, PranabMukhopadhay, Kevin Mumford, Richard Nolan, Sheilagh Ogilvie,Kirsten O
26、leson, Alaknanda Patel, Subhrendu Pattanaik, WilliamPeterson, Hamid Sabourian, Dan Schrag, Priya Shyamsundar, JeffVincent, Martin Weale, and Gavin Wright. The present versionreflects the impact of the comments I received on an earlier draftfrom Kenneth Arrow, Carol Dasgupta, Geoffrey Harcourt, MikeS
27、haw, Robert Solow, and Sylvana Tomaselli. Sue Pilkington hashelped me in innumerable ways to prepare the book for publication.I am grateful to them all.St Johns CollegeCambridgeAugust 2006List of illustrations1 Beckys home 2 John Henley/Corbis2 Becky riding to school 3 MonicaDalmasso/Stone/Getty Ima
28、ges3 Destas home 4 Mike HughesPhotography/Alamy4 Desta at work 5 Sean Sprague/Still Pictures5 Children gatheringwood 48 DominicHarcourt-Webster/Panos Pictures6 Relationship betweenaverage householdsdesired fertility rate andcommunitys fertilityrate 607 Teff threshing inEthiopia 70 Jenny Matthews/Ala
29、my8 Demand and supplycurves 759 A shopping mall inBeckys world 84 Don Smetzer/Stone/GettyImages10 A market in Destasworld 85 Neil Cooper/Panos Pictures11 18th-century patent fortuning harpsichords 96 Science Museum/SSPL12 Trading at the FrankfurtStock Exchange 115 Joachim Messerschmidt/Taxi/Getty Im
30、agesThe publisher and the author apologize for any errors or omissionsin the above list. If contacted they will be pleased to rectify these atthe earliest opportunity.List of tables1 Rich and poor nations 192 The progress of nations 1343 Comparison of voting rules 153PrologueBeckys worldBecky, who i
31、s 10 years old, lives with her parents and an olderbrother Sam in a suburban town in Americas Midwest. Beckysfather works in a firm specializing in property law. Depending onthe firms profits, his annual income varies somewhat, but is rarelybelow 145,000 US dollars ($145,000). Beckys parents met atc
32、ollege. For a few years her mother worked in publishing, but whenSam was born she decided to concentrate on raising a family. Nowthat both Becky and Sam attend school, she does voluntary work inlocal education. The family live in a two-storey house. It has fourbedrooms, two bathrooms upstairs and a
33、toilet downstairs, a largedrawing-cum-dining room, a modern kitchen, and a family room inthe basement. There is a plot of land at the rear the backyard which the family use for leisure activities.Although their property is partially mortgaged, Beckys parents ownstocks and bonds and have a saving acc
34、ount in the local branch of anational bank. Beckys father and his firm jointly contribute to hisretirement pension. He also makes monthly payments into ascheme with the bank that will cover college education for Beckyand Sam. The familys assets and their lives are insured. Beckysparents often remark
35、 that, because federal taxes are high, they haveto be careful with money; and they are. Nevertheless, they own two1cars; the children attend camp each summer; and the family takea vacation together once camp is over. Beckys parents also remarkthat her generation will be much more prosperous than the
36、irs.Becky wants to save the environment and insists on biking toschool. Her ambition is to become a doctor.Destas worldDesta, who is about 10 years old, lives with her parents and fivesiblings in a village in subtropical, southwest Ethiopia. The familylive in a two-room, grass-roofed mud hut. Destas
37、 father growsmaize and teff (a staple cereal unique to Ethiopia) on half a hectareof land that the government has awarded him. Destas older brotherhelps him to farm the land and care for the households livestock,which consist of a cow, a goat, and a few chickens. The smallquantity of teff produced i
38、s sold so as to raise cash income, but themaize is in large measure consumed by the household as a staple.1. Beckys home2EconomicsDestas mother works a small plot next to their cottage, growingcabbage, onions, and enset (a year-round root crop that also servesas a staple). In order to supplement the
39、ir household income, shebrews a local drink made from maize. As she is also responsible forcooking, cleaning, and minding the infants, her work day usuallylasts 14 hours. Despite the long hours, it wouldnt be possible for herto complete the tasks on her own. (As the ingredients are all raw,cooking a
40、lone takes 5 hours or more.) So Desta and her older sisterhelp their mother with household chores and mind their youngersiblings. Although a younger brother attends the local school,neither Desta nor her older sister has ever been enrolled there. Herparents can neither read nor write, but they are n
41、umerate.Destas home has no electricity or running water. Around wherethey live, sources of water, land for grazing cattle, and thewoodlands are communal property. They are shared by people in2. Becky riding to school3PrologueDestas village; but the villagers dont allow outsiders to make useof them.
42、Each day Destas mother and the girls fetch water,collect fuelwood, and pick berries and herbs from the localcommons. Destas mother frequently complains that the time andeffort needed to collect their daily needs has increased over theyears.There is no financial institution nearby to offer either cre
43、dit orinsurance. As funerals are expensive occasions, Destas father longago joined a community insurance scheme (iddir) to which hecontributes monthly. When Destas father purchased the cow theynow own, he used the entire cash he had accumulated and stored athome, but had to supplement that with fund
44、s borrowed fromkinfolk, with a promise to repay the debt when he had the ability todo so. In turn, when they are in need, his kinfolk come to him for aloan, which he supplies if he is able to. Destas father says that suchpatterns of reciprocity he and those close to him practise are part oftheir cul
45、ture. He says also that his sons are his main assets, as they3. Destas home4Economicsare the ones who will look after him and Destas mother in their oldage.Economic statisticians estimate that, adjusting for differences in thecost of living between Ethiopia and the United States (US), Destasfamily i
46、ncome is about $5,500 per year, of which $1,100 are4. Desta at work5Prologueattributable to the products they draw from the local commons.However, as rainfall varies from year to year, Destas family incomefluctuates widely. In bad years, the grain they store at home getsdepleted well before the next
47、 harvest. Food is then so scarce thatthey all grow weaker, the younger children especially so. It is onlyafter harvest that they regain their weight and strength. Periodichunger and illnesses have meant that Desta and her siblings aresomewhat stunted. Over the years Destas parents have lost twochild
48、ren in their infancy, stricken by malaria in one case anddiarrhoea in the other. There have also been several miscarriages.Desta knows that she will be married (in all likelihood to a farmer,like her father) five years from now and will then live on herhusbands land in a neighbouring village. She ex
49、pects her life to besimilar to that of her mother.The economists agendaThat the lives people are able to construct differ enormously acrossthe globe is a commonplace. In our age of travel, it is even acommon sight. That Becky and Desta face widely different futures isalso something we have come to expect, perhaps also to accept.Nevertheless, it may not be out of turn to imagine that the girls areintrinsically very similar. They both enjoy playing, eating, andgossiping; they are close to their families; t
