Before the iPhone there was I, Pencil

What can a pencil teach us about economics and the free market? A lot, actually. If you’re not familiar with Leonard Read’s 1958 essay I, Pencil, you should be. If you’ve never read it, take a few minutes to follow the link and do so.

After that, take a look at this updated version called I, Smartphone:

The “invisible hand” of the free market has never been more beautifully and simply illustrated. To use this essay as a jumping off point to teach your children about economics and the free market, download the teaching guide here.

If you were going to write your own “I” essay, which product would you choose and why?

Review – The Constantine Codex

I looked forward to reading Paul Maier’s book The Constantine Codex from the first time I heard about it. Being interested in history and theology, a thriller that combined both was very appealing. So, when the book was offered free for Kindle, I quickly downloaded it.

The premise is intriguing. A biblical scholar and his wife discover a copy of the New Testament older than any that currently exists – going back to the time of the emperor Constantine. This by itself would be a major find and a boon to biblical scholarship but there’s more, it’s not just an older copy but one with additional text never before seen. This raises the question of canonicity – should this new material be included in the Bible? Against this backdrop the protagonist also finds himself involved in a Christian / Muslim debate before a world-wide audience which subjects him to the wrath of radical Muslims.

Given the potential in this plot, I dove into this book with much excitement – most of which quickly evaporated. The book is not well written. It is full of clichés and the descriptive language is often downright corny:

“Silence in the room was deafening…” (p. 263)

“The explosive joy suffusing Jon when they kissed rapturously after that first hug he later called “one of the greatest moments in my life.” (p. 370)

The historical data woven into the story often seems tacked on just to get the information in rather than flowing naturally from the plot. For example, when crossing to Mt. Athos, we read:

“Jon could only hope that the weather would stay favorable, recalling that a fierce storm had destroyed an entire Persian fleet off the coast of Mount Athos in 492 BC, two years before the great Battle of Marathon.” (p. 75)

What does a storm that happened over two thousand years ago have to do with the outlook for the weather today? That’s like going to Naples and saying, “he could only hope the volcano didn’t erupt destroying the city, recalling that Pompeii and Herculaneum were destroyed by it in 79 AD”

The plot has great potential for intrigue and excitement but unfortunately everything happens easily and right on queue. There’s little suspense and no attempt to make very unlikely events seem believable. After hundreds of years, one of the most sought after copies of the New Testament in all of history is found simply lying at the bottom of a bookshelf in plain sight in the Orthodox patriarchate in Istanbul after a five minute survey of the room by our heroes.

But, what bothered me the most were the theological assumptions of the book. To be sure, this is a work of fiction, but all fiction is to some degree based on truth. And for Christian writers, when writing fiction that touches on theological topics, precision and accuracy are as important as in non-fiction books – perhaps more so. To be fair, there were several times when theological topics were handled well. For example there’s a good discussion about the double standard that exists when criticizing Islam as opposed to Christianity. But, there were also times when precision was required but was lacking. For example, when thinking about the whys of monasticism Jon (one of the main characters) notes that it is common among the world’s faiths. He also notes that St. Paul spent three years in the desert after his conversion then, without skipping a beat, relates the story of Siddhartha Gautama, who left his wife and child to explore the meaning of life:

He was there for seven years until he finally found the answer while sitting under the Bodhi tree and became the first “Buddha,” or “Enlightened One.” (p. 56)

He wonders (“ruminates”) to himself why such behavior is common and concludes that perhaps it’s easier to hear God in the desert. But the passage makes no differentiation at all between Buddha’s experience and Paul’s. Did Buddha find the “the answer” and was his experience as legitimate as Paul’s? I doubt Maier (or his character Jon) would answer “yes” but lack of precision leaves the reader wondering.

Then there is the fawning deference given to Roman Catholicism and Eastern Orthodoxy:

“…it was quite an honor to be hugged by no less than the eastern pope himself—and even be kissed on both cheeks.” (p. 234)

“Wow! Coming from the pope himself, that’s . . . quite humbling.” (p. 288)

This kind of effusion happened whenever Roman Catholic or Orthodox leaders were encountered. It was like listening to a teenage girl who vows never to wash her cheek again after being kissed by Justin Bieber. The deference also showed itself in other ways. Those who use the questionable longer ending of Mark’s gospel to sanction snake handling are “pathetic” (no argument there) but the Orthodox monk who thinks his monastery has the finger of John the Baptist among their relics is “sincere” and a “dear brother.” This double standard seems to be a result of the author’s selective ecumenism as revealed in a passage about Jon and his Roman Catholic friend:

As they matured, however, each had moved from a right-wing conservatism to a centrist, more ecumenical stance. (p. 293)

Christian maturity is the willingness to ignore real and significant theological issues – things such as the nature of justification – and those who don’t are “right-wing conservatives” who probably use the Bible like a talisman (p. 102) – which is apparently worse than using the petrified body parts of saints that way.

The overarching assumption of the book is the existence of a “Christendom” where the Reformation never took place (or has little importance) and the Church is primarily Roman Catholicism and Eastern Orthodoxy – with a bone thrown to a couple of the more liturgical protestant denominations (the main character is Lutheran). Trouble is, “Christendom” no longer exists – if it ever really did. In the end, it’s not just a lost codex that needs to be rescued from the early middle ages but the world-view of the characters in this book as well.

British Library 19th Century Collection for iPad

Have you ever wanted a world class collection of classic books? How about a stunning personal library full of beautiful volumes with ornate decorations and rich bindings? What if I told you both things could be had for free and you could have access to it wherever you go? I recently downloaded this app and have thoroughly enjoyed browsing through the collection of books.

Though these are facsimiles of the books rather than true ebooks, the British Library has done an excellent job with them. I’ve yet to come across one that was difficult to read.

An advantage of the facsimiles is having access to color versions of the intricately designed covers and illustrations as well as any signatures or notes made by the books’ original owners. Its the next best thing to holding these classics in  your hand. Of course a disadvantage is not being able to search the book and having to navigate page by page with no way to jump to a certain chapter or page.

Best of all, access to all these books is absolutely free via iTunes!

What are some of your favorite apps of interest to readers?

88 Books That Shaped America

The Library of Congress has published a list of 88 books that shaped America. You can see the list here in an article from the Chicago Tribune  the USA Today.

I count seven that I’ve read:

  • The Cat In The Hat (yes, it’s on there 🙂 )
  • Gone With The Wind
  • The Grapes of Wrath
  • The Jungle
  • The Legend of Sleepy Hollow
  • The Red Badge of Courage
  • The Scarlet Letter

Of these, the one I was most impacted by was Upton Sinclair’s The Jungle.

How many have you read?

Which do you think had a positive influence? A negative one?

Why You Should Read “Economics in One Lesson”

Cover of "Economics in One Lesson: The Sh...
Cover via Amazon

Economics in One Lesson by Henry Hazlitt was written just after World War II – after Franklin Roosevelt’s New Deal had been in place for several years. Hazlitt’s was one of the voices objecting to those policies at the time. Fifty plus years after the first release of this book we have an economic policy that makes the Roosevelt era look down right laissez faire.  Hazlitt’s common sense approach has fallen on deaf ears.

The book is 198 pages but ‘The Lesson’ is only the first five pages and can be summarized this way:

The art of economics consists in looking not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups” (p. 5)

Ignoring this principle creates 90% of the economic problems in the world according to Hazlitt. He calls this primary fallacy the fallacy of ignoring secondary consequences.  And it is more common today than ever.

The rest of the book is examples of economic fallacies – all of which can be traced to ignoring ‘the lesson’ and all of which are more or less considered orthodoxy by the economic establishment today.

The first of these is: “War stimulates an economy and is good for business.” Hazlitt calls this the “fallacy of the broken window”  – the idea that when something is destroyed and must be replaced, the economy is stimulated.

He illustrates with a parable:  Suppose someone throws a brick through a shopkeeper’s front widow. Of course this ‘stimulates’ the business of the man who is hired to replace the window. Unfortunately, this is as far as most economic analysis goes – the glass repair shop gets new business, may need to hire more people because of the extra work, and the economy benefits.

True, the glass repair shop gets more business.  However, the shopkeeper must now pay for a new window that he would not have otherwise purchased. This reduces his disposable income.  He now spends less with other merchants than he would have if the window had not been broken.

The glass repair shop may hire someone as a result of the broken window, but the tailor the shopkeeper uses may have to lay someone off because the shopkeeper now cannot afford to buy the new suit he was planning on.  Net effect to the economy – zero. Though a simplistic example (even Hazlitt admits as much) the underlying principle is true yet is violated by most economic policies pursued today.

Some of the other examples highlighted in the book which ignore ‘the lesson’ are:

  • Government secured loans
  • Government price supports for farm products (or other things)
  • Rent control
  • Minimum wage laws
  • Tariffs

In each of these cases, either future consequences of the action are ignored or consequences to other groups are ignored or both. Hazlitt points out several times where failure to consider other than the immediate consequences negatively impacts the people the action was intended to benefit.

For example rent control. The goal of this policy is to help lower income people afford housing.  Because of this, rent control often does not apply to luxury housing. Therefore, people who might otherwise invest in providing affordable housing don’t – for fear of having their investment regulated out of profitability. Instead they build luxury housing that will be exempt from government control.

This reduces the number of housing units available to the people the government is trying to help. Another long term consequence of rent control: at some point the controlled rents are no longer enough for the property owner to afford to maintain the property so properties become run-down – again negatively impacting the people the policy was intended to benefit.

I could go on with example after example.

Henry Hazlitt
Henry Hazlitt (Photo credit: Wikipedia)

Economics in One Lesson is not a dry economics textbook – it is very readable and clear. In fact the readability of Hazlitt and the clarity of the principles he discusses leads me to believe most economic policies are driven, not by economics, but by the political motives of the theorists and those who implement their schemes.

This book should be required reading from the High School level up as well as for anyone even remotely involved in state or federal government. I would suggest that it be required reading for every member of congress but they normally don’t like to be confused with the facts.

However, for those who view economics as a method of maximizing the quality of life for the average citizen rather than as a way to buy votes for themselves, this book will be a breath of fresh air.

You can get Economics In One Lesson free as a PDF download here at the Mises Institute.

What are some of your favorite books on economics and finance?