PREFACE
When I retired from my career in physics and engineering in 2006 I began to look into economics. It has always intrigued me since it seemed to underlie almost everything in our modern society. Our everyday lives are dominated by economic forces and behaviors. Politicians speak of how wonderful or how awful the economy is. We are totally dependent on other people for our daily bread and other necessities of life. There is nothing new in that; we’ve provided for each other since caveman days. But today it’s different. We support each other at great, impersonal distances. We don’t know our helpers, we will never meet them, and there’s no need to. All of us, however, near and far, must do our jobs or grass will grow in the streets.
So when I retired from engineering I decided to look into economics. It was a slow-burning thing that grew upon me over years of little puzzles that accumulated in my mind. They were nothing to worry about, but strange.
The complicated arrangements we’ve made to provide for each other are amazing. Today, just to put food on the table it’s necessary to drill for oil and refine it, build railroads and highways, produce electricity, operate giant farms, processing plants, warehouses, and grocery stores. When I stepped back for a moment I could realize how bizarre this is – how far from the kitchen garden and the potato patch. But if this huge network did not exist hundreds of millions of people would not be alive today. And, all of this is just for our food. How we get clothing and shelter are equally astounding. Then there are the services we take for granted like schools and health care plus the thousands of non-essential items which are nice, convenient, fun, or gotta-have. Every one of these has its own complex supply chain with its associated jobs, financing, transportation, etc., all criss-crossing with others, making up what we call ‘the economy.’
The economy, I could see, was our name for the widest scope of our social arrangements. Literally everyone was included in some way, whether they knew it or not, liked it or not. The man supporting his family and the welfare bum were both in it. The wife at home raising the kids without pay was thought to be outside the economy, but not so. Without the work of millions like her society would fall apart.
It was plain to me that many people didn’t think about the economy in such a broad way. They thought it was all about money: how it came and went, how it was made, how much there was, was there enough, etc. That was complicated enough.
I was not totally ignorant about the economy when I began this project, or so I believed. I knew the government and the Federal Reserve Bank somehow controlled money. I knew the Gross Domestic Product measured the economy’s health and that the S&P 500 did the same for the stock market. I knew households, businesses, financial markets and governments interacted in complicated ways. And, that raw materials, goods and money flowed everywhere around the world. That wasn’t too bad a start, was it? Little did I know.
I didn’t begin by studying economics textbooks. I wanted a broader view. I started with J. K. Galbraith’s American Capitalism, Thorstein Veblen’s The Theory of the Leisure Class, and The Economist magazine. These led me to others, and then many others. I got interesting-looking books from the library and used book stores. I got a University of Wisconsin library card. This wasn’t college-course learning. It was like picking up pebbles at the seashore; a sample here, a bit there, like learning science by skipping from Newton to Carl Sagan; from Galileo to Einstein.
I’m still no economist, but after a few years of such patchwork study I’ve learned enough to better realize the outlines of my ignorance. I can make out the big picture as seen by economists. At first, my training in physics and engineering made me very impatient with what I was reading. So much hand-waving! So many just-so stories! Idiot-simple theories fancied up with higher mathematics! But there were real men and women of genius who had worked out valuable insights and first steps. I learned a lot from them. It was strange that other economists seemed not to do so. I think I could now enroll in an Econ 101 course and not be put off by it.