The Reluctant Economist: Perspectives on Economics, Economic History, and Demography

Published by EH.NET (November 2004)

Richard A. Easterlin, The Reluctant Economist: Perspectives on Economics, Economic History, and Demography. New York: Cambridge University Press, 2004. xx + 284 pp. $75 (hardcover), ISBN: 0-521-82974-7.

Reviewed for EH.NET by Lee A. Craig, Department of Economics, North Carolina State University.

In the notes preceding Kenneth Sokoloff’s 1993 interview of Richard Easterlin for the Newsletter of the Cliometric Society, Sokoloff summarized Easterlin, the man, with “There is always an air of mystery about him.” Of the man (and his work), Sokoloff wrote, he “makes every word count.”[1] Nowhere are these observations more apparent than in Easterlin’s recently published The Reluctant Economist: Perspectives on Economics, Economic History, and Demography. Many, perhaps most, scholars in the twilight of a long, brilliant interdisciplinary career — which in Easterlin’s case includes a distinguished professorship at the University of Southern California, the presidency of both the Population Association of America and the Economic History Association, membership in the National Academy of Sciences, and a Fellowship of the American Academy of Arts and Sciences, to name but a handful of his many academic distinctions – would succumb to the temptation to expand on their lives, to give those lives broader meaning in the context of their scholarly contributions (and vice versa). A reader might reasonably expect a good bit of autobiographical material. A reader of Easterlin’s perspectives would be mistaken. The “memoirs” chapter, such as it is, of this volume includes only 18 pages, and much of the space is taken up with discussing the work that appears in subsequent chapters. Easterlin, the man, remains a mystery. The same cannot be said of his work.

Most of the volume’s chapters are revised versions of previously published articles, and Easterlin appears to have carefully chosen these pieces. None is technical by the standards of even the most benign usage of the word. Data play important roles in each. Each major section — “Economics,” “Economic History,” and “Demography” — stresses one or two main themes and/or findings around which narrative is wrapped. In addition, the theme of the reluctant economist runs throughout the volume. Easterlin wields the term as a double entendre. At first, it reflects his ambivalence about his professional choice as a young man, but later the reader sees it as a metaphor for Easterlin’s skepticism about the methodology of contemporary economics. This skepticism appears most strongly in the first three chapters, collectively labeled “Economics.”

Of the economics’ profession, Easterlin laments, “Model building is the name of the game” (p. 11). The tendency to build models is an error of commission, according to Easterlin, and it is accompanied by two errors of omission: The failure to appreciate and employ subjective testimony (Chapter 2) and the blind adherence to the maxim de gustibus non est disputandum (Chapter 3). In Easterlin’s view, de gustibus is worthy of an accounting. The two omissions converge on a topic, happiness, which one does not often find addressed in much detail in the economics literature. Looking for happiness in the midst of an economics paper is like searching for pleasure in a treatise on the physiology of human reproduction. It’s largely between the lines. Easterlin dismisses economists’ obsession with abridging human aspirations and preferences via the reductive assumptions and equations that jointly constitute a “model.” But he has more important objectives than merely ranting about the failings of those who joined the profession after he did. Ever the teacher, he shows how the judicious use of subjective data leads one to conclude that the inviolable tastes and preferences of economic models are in practice quite violable, and more importantly this leads to the conclusion that, as aspirations rise with income, there will never be a “New Postmaterialistic Society.” Societies may or may not be new, but there is never anything post about their materialism. The Age of Aquarius has Hummers and Ipods. One can only learn this if one asks about aspirations. Assuming them away only removes all possibility of successfully analyzing the issue.

Some readers — particularly younger ones who make their living doing what Easterlin abhors –will be excused if they conclude that, when writing about economics and the economics profession, Easterlin comes off a bit curmudgeonly. The chapters in the sections labeled “Economic History” and “Demography” are less subject to that charge. Probably because of Easterlin’s considerable contributions to those areas, the material there is more informative than corrective — though a few model builders are still taken to task. The history section consists of four chapters. The first of these (Chapter 4) is a restatement of Easterlin’s 1980 presidential address before the Economic History Association entitled “Why Isn’t the Whole World Developed?” Easterlin’s answer is education, or more appropriately the lack of education. But why don’t those undeveloped places just purchase more education and be done with it? Well, that is a more difficult question. Easterlin reviews a disparate set of likely suspects including family structure, government, and that great mass social scientists call institutions, but he notes the historical record suggests that different combinations of these suspects yield different results in different places at different points in time. Ultimately, the chapter serves as a call to study the economic history of educational systems.

After a short piece (Chapter 5) that reviews the history of long-run cycles in real economic activity (Kuznets and Kondratieff Cycles), Easterlin turns to the Industrial Revolution (Chapter 6) and the history of the market (Chapter 7). The key issue in his take on both topics is mortality. With respect to the Industrial Revolution, Easterlin writes, “What the Mortality and Industrial Revolutions have in common is that they are both manifestations of the explosion in empirically based human knowledge, scientific and technological, that dates from the seventeenth century” (p. 97). This is a theme pushed hard on the Industrial side by Joel Mokyr, most recently in his 2004 presidential address before the Economic History Association. Where the two might diverge is on the subject of Easterlin’s next chapter, entitled “How Beneficent is the Market?” Not terribly is Easterlin’s answer, or at least not nearly as beneficent as most economists would argue (certainly) — or economic historians for that matter (probably). To Easterlin, the evidence suggests that the government can be pretty beneficent when it comes to adding years to life through public health programs.

The final section of the volume is dedicated to Easterlin’s perspectives on demography. There is neither a better written nor a more concise summary of the various economic approaches to human fertility than Easterlin’s “An Economic Framework for Fertility Analysis” (Chapter 8). It is a masterpiece of scholarly prose. Making every word count, as Sokoloff put it, Easterlin uses fewer words to better summarize the various fertility theories than any of the distinguished scholars who originally espoused or subsequently adopted those theories. In so doing, he offers a simple, yet powerful model, which has family preferences for children, as one of its key elements. He then applies the model to the demographic transition as it has evolved and spread around much of the world (Chapter 9), demonstrating, that in the absence of an explicit accounting for changing preferences, one struggles to characterize one of the most important socio-economic phenomena of the past two centuries.

Chapters 10 and 11 contain summaries of, respectively, the long-run decline of human fertility in the rural United States and the baby boom and bust of the second half of the twentieth century. These are two of Easterlin’s major contributions to demographic history, and they remain so nearly three decades after he published the original articles upon which the chapters are based. Consistent with the discussion in the earlier chapters, the roles of aspirations, expectations, tastes and preferences remain prominent in Easterlin’s analysis of these momentous events.

Finally, and on the same theme, Easterlin concludes his perspectives by addressing what at first glance appears to be a peculiar topic, namely the curricular choices made by U.S. undergraduates in recent decades. In particular, he focuses on the growth of business school enrollments. Those readers who appreciate Easterlin’s position in the pantheon of economic history, especially those who teach the multitudes of business majors about whom Easterlin writes, might be dismayed to see such a giant engaged in explaining the behavior of such a rabble. But Easterlin, as always, has a bigger picture in mind. Specifically, he demonstrates that in addition to market signals, once again changing preferences — “as evidenced by life goals of the young” (p. 12), and as manifest, for example, in their concerns about “money making” (p. 220) — explain the witnessed behavior. He ends the volume by hoping, if that is the word, that “preferences be accorded more equal treatment in economics” (p. 245). To the end, Easterlin remains the reluctant economist.

Notes:

[1] Kenneth Sokoloff. “An Interview with Richard A. Easterlin,” Newsletter of the Cliometric Society 8, no. 1 (1993), p. 3

Lee A. Craig is Alumni Distinguished Professor of Economics at North Carolina State University. His most recent book, with Robert Clark and Jack Wilson, is A History of Public Sector Pensions in the United States (Philadelphia: University of Pennsylvania Press, 2003). He is currently writing a biography of Josephus Daniels.