In 1931, in an article called “Economic Possibilities for our Grandchildren,’’ John Maynard Keynes described what he called “the political problem of mankind.’’ The task, he wrote, was to “combine three essential human goals - economic efficiency, social justice, and individual liberty.’’ Sylvia Nasar begins her new book, “Grand Pursuit: The Story of Economic Genius,’’ with that quote and with Keynes’ self-described aspiration: for economists to be “the trustees, not of civilization, but of the possibility of civilization.’’
The book might have been better titled “Trustees of Possibility’’ because that is the theme Nasar etches through more than 500 pages, brilliantly bringing to life game-changing economists from Marx to Hayek and from Sidney Webb to Milton Friedman, tracing the evolution of modern economic thinking through the richly detailed stories of the men and woman who reshaped how we think of life’s possibilities. The book begins with Marx, agonizing over the poor while living in subsidized luxury (she’s descriptive, not judgmental).
And Beatrice Potter, midwife of the nanny state, born to wealth, child of an unloving mother, a political traditionalist who chases shamelessly after Joseph Chamberlain (Neville’s father), an imperious, self-absorbed leftist, until she ends up married to Sidney Webb (she thinks him an ugly little man and tells him she’s marrying him only for his head) and sets out on a course that changes British political history.
The Potter-Webb story is a good microcosm of the book itself: It is about economics, about waging war against “destitution,’’ but it’s filled with H.G. Wells and George Bernard Shaw and a lady with a crush and a man who is a cad and the transition of Winston Churchill from conservative to emulator of the German welfare state. If economics is so dull how does this book read like a who’s who, a dime-novel love story, and a clash of titans?
There is a thread connecting many of Nasar’s characters (they’re not her “heroes’’; their economic perspectives vary greatly, and she’s a describer, not an advocate). Potter, for example, saw her class as distinguished not by wealth but by the fact that they were invididuals who “habitually gave orders, but who seldom, if ever, executed the orders of other people.’’ I once, in an upscale community I’m familiar with (though not a part of), observed that there seemed to be three classes of people: those who never washed their own dishes or mowed their own lawns; those who washed other peoples’ dishes and mowed other peoples’ lawns (the two subsets that dominate political discussion); and those who washed their own dishes but nobody else’s and those who mowed their own lawns but nobody else’s, and who form the bulk of the taxpaying public. These distinctions and the focus on economics as a tool not merely to explain and predict but to actually improve the lot of the laboring class - is what this book is all about. Before the rise of economics as a guiding political force, Nasar observes, society was largely static: If you were born into a family of poor laborers, that was the life you could expect for yourself and the one your children would follow. One’s situation in life was just what it was. Economics was the science that gave rise to possibility.
One of the problems in politics is a tendency toward oversimplification. To some, Adam Smith, capitalism’s champion, is a believer in survival of the fittest, while Keynes has long been a goblin to those who believe he brought about the surrender of freedom and the rise of the super state. In truth, both men were far more nuanced in their analyses and their prescriptions, and it is a great strength of Nasar’s book that she walks us carefully through those nuances and complexities, the motivational triggers and the evolving thought, that led to the theories that have shaped the economic and political battles of the past two and a half centuries. It is thus no great surprise to learn that despite the substantial disagreements between Keynes and Friedrich Hayek over how much government was too much for a free society, it was Keynes who nominated Hayek for a prestigious membership in the British Academy and endorsed Hayek’s book, “The Road to Serfdom,’’ which still enjoys a place of prominence in every American conservative’s library.
Near the end of World War I, Joseph Schumpeter argued that socialism was not inevitable and that a hybrid, a capitalist welfare state, would survive the conflict. The ensuing crisis, he said, would flow from what Nasar describes as “a gap between the voters’ expectations and their willingness to pay taxes.’’ Which sounds eerily familiar to those of us waiting to see how the United States manages to extricate itself from the chasm between what the public wants and what it is willing to pay.
This is an utterly fascinating book on many levels - equally enjoyable for the serious thinker and the trivial pursuit buff (you’ll find a journalist named Charles Dickens in these pages). Nasar spotlights the pursuit of possibility, the simple clarity of the visions that motivate the effort, the complexity of the steps required to bring change about. “A Beautiful Mind,’’ Nasar’s previous book, was about an economist named John Nash, but Nasar’s mind is pretty good, too. No lesser mind could have written a book so rich, so compelling, so important, and so much fun.