The Price of Everything by Russell Roberts

So one of the dorkier things about me is that in the past few years I’ve gotten really interested in economics. You probably wouldn’t have guessed that from reading this litblog, but it’s true. In fact, one of the greatest things ever is the large and vibrant econblogging community that has developed in one corner of the blogosphere (ugh)—I actually spend lots more of my blog time reading about economics than anything else. Pop economics books have gotten popular, so many people already realize economics don’t just talk about money, but write about all sorts of topics from a perspective totally different from most people’s—crime, fashion, technology, education, politics, history, even books.

Anyway, my favorite econbloggers are professors at George Mason University, one of whom, Russell Roberts, hosts the EconTalk podcast I link to in the sidebar (sidebar: this is the best, most interesting, most informative podcast in the universe, and Professor Roberts is an excellent interviewer). He’s also written, instead of pop nonfiction, several works of didactic fiction aimed at getting across economic ideas. It’s a strange idea, but somehow it works. His first novel, The Invisible Heart, was probably my favorite, but last night I was engaged enough with the latest, The Price of Everything, to read it straight through.

The Price of Everything is the story of Ramon Fernandez, a tennis prodigy about to graduate from Stanford and selected to give a commencement speech. At the beginning of the novel, an earthquake rocks the Bay Area and Fernandez and his girlfriend finish their dinner by candlelight and then head to Home Depot for some flashlights. But by the time they get there, they’re sold out. So the couple drives out to Hayward, the nearest location of Big Box—which has plenty of stock but which has doubled its prices in the wake of the disaster. Fernandez picks up what he needs but is upset by the plight of a poor woman who didn’t bring enough money for baby food and diapers (“How could she have known that Big Box would gouge her with doubled prices?”) and ends up rallying a group of people in the parking lot.

All this leads to a planned protest against Big Box on the Stanford campus (they have accepted large donations from the evil corporation) and the head of the company is not impressed. Ruth Lieber, university provost and economics teacher to Fernandez’s girlfriend Amy, assures him everything will turn out fine and has a chat with Fernandez.

Ruth ends up impressed by the way Ramon handles the situation he’s put himself in and decides to take some time out of her schedule to discuss with him in depth why she’s defending price-gougers in the face of poor Americans who can barely get by. Ramon is sincere, but Ruth is able to explain to him why that’s not quite what she’s doing, and why the signals sent by rising and falling prices are so important to the economy. I can’t make that sound exciting in my summary, but Prof. Roberts clearly has a gift for teaching and has passed that gift on to the character of Ruth Lieber.

In the midst of these conversations, we learn about Ramon’s past. He was the son of the greatest Cuban baseball player of all time, who died when Ramon was just a child. Later, Ramon’s mother fled Havana for Miami along with her son and brother, and never looked back. She worked as a cleaning lady and when Ramon turned out to be so talented was able to send him to good private schools and then to Stanford. And at the time of the story, a few years from now, Castro is dying. And once he’s gone, Ramon is the most famous Cuban left in the world, and reporters can’t wait to hear from him.

Much of the novel is a one-on-one seminar about how price signals create a market more efficient than central planning could ever do, and Roberts is good at illustrating this difficult concept. There are many examples of how the same unplanned order arises in the natural world, both explicit and implicit—for example, a flock of birds with a common goal, or dancing couples in a nightclub. But it’s not strictly a series of lectures. The story of a born teacher, full of passion about even her very last student, and a young man about to go out into the world, is also fully realized.

I wouldn’t say this is a novel that should be read just for fun, unless you are as dorky as me and really think this stuff is fun. But if you’ve ever thought about picking up a book like Freakonomics and aren’t so into nonfiction, or if you’ve read one of the recent pop economics books and want something more basic than the flashy examples often written about, this would be a great place to start.

7 comments to The Price of Everything by Russell Roberts

  • Anonymous

    You lost me at “Ramon is the most famous Cuban left in the world, and reporters can’t wait to hear from him”? Not the US Senators from Florida or NJ, not the congressmen, not others who are from Cuba? The point about high prices and how they help people sounds like a useful piece for a column in a newspaper. But a book? I wouldn’t even mind reading a few pages or even a short chapter on this point, but this book sounds like it is padded with filler.

  • Sounds like an interesting story about a subject most of us don’t know a lot about. I’ll have to keep an eye out.

  • Well considering how few people know the names of their own representatives and senators, I find it relatively believable that an athlete would be more famous. Great athletes tend to be very famous in comparison to politicans—who is better known, Pelé or Lula, Nadal or Zapatero, Federer or—I bet you didn’t even know that Switzerland’s head of state is actually a seven-member council.

    As far as filler—I don’t think you can relate complex economic (or any other) ideas in a newspaper column. The general public would be a lot better educated if you could. I’m not sure why this, in particular, would sound padded with filler more than any other book reviewed, since a few-hundred-word commentary can’t possibly relate every idea in a novel. But it is in the nature of didactic fiction to take things slow and use a story to illustrate ideas in multiple ways. If it were denser it would be a textbook and it would take a similar amount of time to read and understand a short chapter.

  • Nice and usefull post, thanks, this is one for my bookmarks!

  • carol

    I read this book for my economics class. I am not much a reader and I am only taking this class as a requirement, but the book is really good. You learn so much reading it, but at the same time isn’t dull.

  • Grim Horus

    I am reading this book for extra credit in my 8th grade economics class. It is really good!

  • […] Bench ran an interview with Russell Roberts, author of The Price of Everything, which I reviewed here a while back. Fun to see him interviewed when I’m so used to listening to him ask the […]