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Friday, May 1, 1998

Fair Play: What Your Child Can Teach You About Economics, Values, and the Meaning of Life

Landsburg's Grasp of Economics Is Herculean

It’s impossible not to relish a book whose author, early on and with only slight rephrasing, reveals the real message in the famous Bismarckian maxim from John Kennedy’s inaugural address: “Ask not what I can do for you. Ask what you can do for me.” Upon reading this line, I knew that the next 200 pages would be immense fun.

And fun they are! But they are also impressively educational. With Fair Play, Steven Landsburg, who teaches economics at the University of Rochester, cements his reputation as one of today’s foremost economics teachers. The most important lesson Landsburg teaches is that the amount of insight extractable from a handful of basic economic postulates is unlimited. (I don’t doubt that if F. A. Hayek and Adam Smith were alive each would glean additional economic insights from this book.)

Learning economics is no stair-step procedure in which you first master the basics and then move on to conquer more elaborate modeling techniques. While this is the way economics is taught in universities, it isn’t the way we really come to know economics. To truly understand economics is to remain firmly planted in the basics, training yourself always to examine every facet of reality through the lenses supplied by these basics. When you do this, you realize three things. First, no matter how thoroughly you understand economics today, you understand it more deeply tomorrow. Second, anyone over the age of 15 with a modicum of common sense can grasp sound economic explanations. And third, almost any human institution is better understood if examined with the mental tools supplied by basic economics.

Among the many slivers of reality that Landsburg illuminates with the klieg light that is his economic understanding are environmental conservation, income redistribution, the choice of a career, and the choice of a spouse. (On choosing a spouse, Landsburg abhors the idea that his daughter would marry a perfect husband: “A perfect husband is a costly extravagance. Most costly extravagances turn out to be mistakes.”)

Indeed, Landsburg teaches his readers economics and ethics by relating how he and his ten-year-old daughter Cayley teach each other economics and ethics. For example, he advises Cayley that she would be wrong to steal toys from a playmate who owned more toys than she. She would be equally wrong, Dad makes clear, to join with a majority of her other playmates to forcibly take toys from the wealthier child. The lesson for adults is obvious: “if your kids aren’t allowed to get away with something, neither you nor your congressman should be allowed to get away with it either.”

In this light, many Americans today are the moral equivalent of schoolyard bullies.

Cayley herself is quite the economist. When her father, in an unguarded moment, inferred from her enthusiasm for shopping that she loves money, she retorted in the way that the young Frederic Bastiat might have replied to such an accusation: “Dad! The reason I like to shop and buy things is to get rid of my money.” Consumption is truly the end of all economic activity!

For me, the most fascinating pages of the book feature Landsburg’s discussion of Jim Crow legislation. Of course, it’s standard practice today among America’s Concerned Elite to cite this legislation to justify today’s race-based policies that give special privileges to blacks. Opponents of affirmative action typically retort that most of the whites who benefited from Jim Crow legislation are now dead.

Landsburg condemns affirmative action on grounds more economically sweeping: Jim Crow hurt not only blacks of a century ago—it also hurt most whites!

Jim Crow prevented blacks from dealing with whites, and it also prevented whites from dealing with blacks. Who would want to argue that being denied the right to trade with white people is a form of oppression, but being denied the right to trade with black people is no big deal?

When I first read this argument I simultaneously exulted in my new-found understanding, and suffered chagrin that I’d not thought of this argument on my own. But what then did occur to me is that this same argument applies as well to slavery. As vile as slavery was to those enslaved, it also harmed nonslaves who owned no slaves. Slaves were prevented by law from choosing their own productive specialties and, hence, from employing their creativity and efforts in the market in ways that would have made not only them, but also all with whom they would have dealt, better off. While it’s incontestable that black slaves were slavery’s premier victims, they weren’t its only victims: nonslave-owning whites were injured by that abominable practice. Slavery’s only beneficiaries were the tiny fraction of the population who owned slaves.

Most books crammed with substance offer several nits for the picking. In Fair Play, though, I find only one. Landsburg argues that minimum-wage legislation is bad only because it is an unfair tax on entrepreneurs. He dismisses the standard case that legislated minimum wages hurt unskilled workers. His dismissal, in my view, fails.

But picking even one nit with such a remarkable book seems unbecoming. Read and relish Fair Play. Steven Landsburg’s grasp of economics is herculean.

  • Donald J. Boudreaux is a senior fellow with the F.A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Center at George Mason University, a Mercatus Center Board Member, and a professor of economics and former economics-department chair at George Mason University.