Read: The Darwin Economy
Frank’s The Darwin Economy leaves me torn inside. I agree with essentially everything that Frank proposes and how he justifies his prescriptions. Yet, I expected something very different.
Of course I agree that there is a tension between individual interests and the individual action and the collective interest and the resulting desired action. The market mechanism does not guarantee the maximization of social welfare. That only happens under very specific circumstances, it is a special case.
Collective action: the agreement that individual action sometimes needs to be – voluntarily – restricted is not controversial at all.
I, of course, also agree that we need taxes to finance public goods and that we should rather tax bads instead of goods. Hence I find the suggestion to tax consumption instead of income rather compelling.
I also liked the reference to Coase and the re-focus on what may have been Coase’s actual intended lesson very enlightening.
Hence, for all this I may actually recommend The Darwin Economy. Frank is preaching to the choir.
On the other hand, the book is written almost exclusively for the North-American market. As a European I found the narrative, a discourse with an imagined dogmatic, narrow-minded “movement libertarian” very annoying. At first I did not even understand what Frank was trying to describe when he wrote “movement libertarian.” I believe – I know – that behind the term libertarian is much more than the anti-government market-devotee that Frank targets. More importantly, I am looking at the world from a completely different vantage point. There is no reason to believe any of Frank’s explanations would give rise to more government intervention (than we already have).
Finally, I do not share Frank’s expectation that Darwin will dethrone Smith as the intellectual starting point of modern economics. And, in this context, the title of Frank’s book is at least slightly misleading. Darwin, or rather Darwin’s survival of the fittest, has a comparatively minor role in the book. Evoking Darwin just allows to add a couple of non-economic collective action problems as introductory examples. The subtitle “Liberty, Competition, and the Common Good” is much more honest, much closer to the content and intent of the text.