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The Invisible Heart: An Economic Romance
The Invisible Heart: An Economic Romance
Russell Roberts
The MIT Press, 2002
282 pp., 27.95

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The Invisible Heart: Economics and Family Values
The Invisible Heart: Economics and Family Values
Nancy Folbre
The New Press, 2002
288 pp., 20.95

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Andrew P. Morriss

Families and Economics

Tying the two together in fiction and nonfiction

Two quite different books with similar titles bring economics to the subject of romance and the family. Russell Roberts continues his use of fiction to illustrate economics with The Invisible Heart: An Economic Romance. He first used this approach in 1994's The Choice: A Fable of Free Trade and Protectionism (updated in a revised edition in 2000). And in a work of nonfiction, The Invisible Heart: Economics and Family Values, University of Massachusetts professor and MacArthur Fellow Nancy Folbre writes about the failure of mainstream economics to address what she considers to be the important issues surrounding families today.

Roberts' The Invisible Heart has a difficult task. It needs to hold its own as a novel while imparting economic concepts. There is some tension between the two missions. Fiction thrives on plot and character; economics articles, on the other hand, typically emphasize mathematical modeling and statistical analysis of data. To resolve this conflict, Roberts turns to an older tradition of economics: plain writing and clear reasoning. Adam Smith wrote in this style in his masterwork The Wealth of Nations (1776), and even into the late 1940s this remained the approach of most economists. With the rise of formalism after World War II, however, the economics profession turned to less accessible forms of communication. Roberts revives the earlier approach, partially reconciling the gap in form between novels and economics.

As a novel, Roberts' The Invisible Heart is good but not great. His prose is spare, hisplot has a nice twist, and the story is for the most part believable. Roberts not only writes better than most economists, he writes better than many novelists. There are two main story lines, which ultimately converge. Sam Gordon and Laura Silver are two teachers at an exclusive private school in Washington, D.C. Sam teaches economics; Laura teaches literature. Polar opposites, they are inevitably attracted to each other, and their debates over economics, politics, literature, and everything else fill half the book.

Their courtship, both emotional and intellectual, is rocky: at one point, Sam gets into heated arguments with some of Laura's family and spoils a dinner party. Laura herself is no straw woman, put in the book merely to be enlightened by the all-knowing economist. She articulates intelligent objections to Sam's arguments and pushes him to explore the consequences of his views. Hence her eventual acceptance of the legitimacy of some of Sam's positions is persuasive.

The second plotline concerns a small regulatory agency looking into a potential scandal at a health care corporation. The characters here are less fully developed and the story less convincing. Indeed, I kept wondering why this seemingly unrelated story was included at all. There are great implicit economic lessons in the behavior of the agency, but they seemed unrelated to the story of Sam and Laura. When Roberts pulled the two plots together in a surprising and satisfying way, the purpose became clear. Without spoiling the plot twist for you, let me say it is well handledso that some of what I had supposed to be misjudgment turned out to be evidence of authorial cunning.

Folbre's The Invisible Heart is a very different book, and not just because it is not a novel. Whereas Roberts wants to takes lessons from cutting-edge economic analysis and present them lucidly and concretely for the general reader, Folbre doesn't think much of modern economic analysis, period. (She also doesn't think much of former Massachusetts Governor William Weld, Rush Limbaugh, her father's employer, Republicans, libertarians, conservatives, rich people, and a host of other unenlightened individuals and groups.) Folbre's arguments range across a variety of topics (globalization, feminism, housework, taxes, welfare, Social Security, socialism, corporations), but a brief summary of her general argument is contained in the following quote: "Economic theory offers us some indispensable tools for organizing our joint endeavors. That's why it's so important to get economics rightto ensure that it includes careful consideration of love, obligation and reciprocity, as well as self-interest."

Well, not really. A big part of the power of economics is that it can explain a great deal by using a deliberately simplified model of human behavior. Building only from self-interest, economics manages to explain a good deal about individuals' behavior in firms, families, and bureaucracies. Can it explain everything about human choices? Hardly. But it does what it does very well. It helps to explain why parents sacrifice for their children and why the price of gas goes up when environmental restrictions divide the nation into submarkets. It tells us why the Endangered Species Act makes it harder to save endangered species, and why land trusts are so good at saving land. Rather than adding to its explanatory power, changing this model to include "love, obligation and reciprocity" just turns it to mushand mush is what we get in most of Folbre's book.

Rather than offering an economic analysis of family issues, Folbre's book exemplifies the type of argument made by those whose politics cause them to reject free market economics. Since the collapse of the Soviet Union, a popular form of the argument goes something like this: We can see that central planning failed and that market economies do indeed produce more goods and services than planned economies do. Our quarrel is not with reliance on markets to do some things; we just want to harness the market to better goals than individual greed will produce. By using the power of the market to do good things we'll have a much nicer society.

We've already had this discussion, and Folbre's side lost. In the 1920s and 1930s, socialist economists debated free market economists over whether the type of limited socialism currently advocated by Folbre was possible. On a variety of fronts the free market advocates (led by Ludwig von Mises and Friedrich Hayek, neither of whom merit mention in the index to Folbre's book) triumphed. (Hayek's The Road to Serfdom summarizes in a nontechnical manner the arguments against the socialist position.) Now Folbre and other "hyphenated economists" (she's a feminist-economist; there are "eco-economists" and other subgroups as well) are making arguments not that different from those raised 70 years ago.

Despite its subtitle, then, Folbre's book is not an economic analysis of family issues. It is a well-written, witty attack on market economics, but one that draws its critique from scattered readings of the Wall Street Journal's editorial page. Perhaps the best analogy would be to The Great Unraveling, a book of collected op-ed columns by the economist and New York Times columnist Paul Krugman. He's written a number of important, high quality economics papersbut that's not what he publishes in the Times. Like Krugman, Folbre relies mostly on quips, ad hominem attacks on opponents, and anecdotes rather than economics.

For example, Folbre introduces a chapter entitled "The Golden Eggs" by summarizing the economic argument against high marginal tax rates as follows: "Conservatives argue that steep taxes on wealth and income penalize hard work, risk-taking, and savingthe very forces that foster economic growth. Their favorite maxim is 'Don't kill the goose that lays the golden eggs.' " So far so good: that's a fair, brief summary. But Folbre's response to the economic argument is a non sequitur: "I've never understood this goose business. It seems as though a bird that lays golden eggs would find it difficult to reproduce itself over time. When King Midas got his wish that everything he touched would be transmuted into gold he accidentally turned his own daughter into a lifeless statue. My main complaint about taxes is that we have to spend more time figuring out how to fill in our 1040 forms than thinking about what we actually pay for."

If Folbre really doesn't understand "this goose business," then she's not doing much economics. But at other points she clearly does seem to understand economic arguments, which makes it hard to know how to respond to such a passage. The "goose" is a metaphor, as Folbre well knows, and one that encapsulates a simple idea: don't kill what produces your wealth. Speculating about the reproduction of golden-egg-producing geese doesn't fit the metaphorindeed, one point of the metaphor is that there aren't any more such geese.

Folbre's substantive response to the metaphor's point that incentives matter for economic activity is to deny that they exist for the rich, although she suggests they are important at lower income levels. She goes so far as to claim that happiness is unaffected by income above a certain level (not specified directly but which, based on other statements in the book, appears to be in the $200,000 range).

Folbre's response to the goose metaphor exemplifies the book's general approach. She makes factual assertions, most often supported by citations of other feminist-economists, that contradict basic economic principles and then uses these "facts" to attack those economic principles. She illustrates her arguments with confessional statements about her own life experience and quotes from pop culture icons like John Kenneth Galbraith, British singer Billy Bragg, and '60s relic Tom Hayden. Her examples of "conservative" arguments are largely drawn from the likes of Rush Limbaugh. When she does cite someone serious, such as Gary Becker, it is from a Business Week column, not his critically important work on the economics of the family. Indeed, Folbre does not provide any serious analysis of the work of Becker or Richard Posner, the preeminent "conservative" economic voices on family issues. She never mentions the extensive empirical evidence, for example, on the devastating economic consequences of the liberalization of divorce laws on womenlargely attributable to the decline in women's bargaining power that loosening restrictions on divorce caused. This is sloppy work and doesn't fit the model of good economic analysis, where claims are tested against evidence and the best arguments of contrary positions are examined.1

Even worse is the muddled account of socialism that pervades the book. According to Folbre, Marx has been fundamentally misunderstood. True, his vision was "flawed," but he "painted a big picture of how ordinary people were trying to redesign their social system and make their own history." Folbre invokes the Soviet Union and Cuba as models of places that "delivered significant improvements in standards of living" and "vanquished hunger and illiteracy." Although she assures readers that "I was no fan of Cuban Leninism" and recounts her heroic decision not to travel to Cuba in the 1970s (because of the trip organizers' requirement that she engage in self-criticism of her bourgeois attirea decision made only after "some soul-searching about the relative importance of dress codes versus meeting people's basic needs"), she never manages to mention the impact on families of the repression inherent in both those systems. The Soviet and Cuban gulags, the incessant spying, the pressures on family members to turn each other in, and the collective punishment of families of dissidents get not a single mention in this book on families and economic systems. Yet these are not incidental features of otherwise egalitarian economic systems; denial of the dignity of the individual and brutal repression are inherent characteristics of those systems. But what do we learn of their flaws from Folbre? Well, she acknowledges that, as a result of flawed planning, the Soviet Union didn't produce consumer goodsautomatic dishwashers, for instancethat would improve women's lives.

For Folbre the real bread-and-butter issues are those that surround gender. That's why the lack of Soviet dishwashers merits attention while the Soviet lack of freedom does not. "Much of the rage about abortion," she writes in the same vein, "reflects a larger anxiety about maternal care. According to the so-called pro-life perspective, women shouldn't have a choice to care or not for a developing fetus." The pro-life position, she asserts, is really expressing "fear that men simply can't be altruistic unless women are more so." Later, she notes that "much of the extreme rhetoric of the antiabortion movement is fueled by enormous anger at the very idea that a woman might decide that her own needs have precedence over those of a potential child."

The problem with this analysis is that it doesn't accurately represent the position she's attempting to argue against. Abortion opponents' "enormous anger" is fueled by their conviction that abortion kills a child, not a potential child. Folbre may disagree about whether a fetus is a child or not, but she is not entitled to misstate the arguments of those with whom she disagrees. To respond to those opponents requires either engaging on the issue of whether a fetus is a child (something about which economics doesn't have a great deal to say) or conceding that point and then taking on the difficult task of arguing that something else trumps the moral rights of the child. There are people who make such arguments, but Folbre isn't one.

Folbre's treatment of abortion is, unfortunately, typical of her approach to contrary positions, particularly those with a moral basis. Perhaps by this point it will come as no surprise that she manages to write over two hundred pages on family values with only one mention of religion: a denunciation of the "worldwide resurgence of religious fundamentalism"which, she asserts, is a reaction to "anxiety about the destabilization of traditional patriarchal relationships that have ensured a relatively cheap supply of caregivers." There is a rich and growing literature on the economics of religion, which brings economic insights to understanding the growth and decline of various denominations, the impacts of religious doctrine on the relative economic success of individuals, and other topics. None of that appears in this book. There are undoubtedly some commonalities between, say, Islamic fundamentalism and Christian fundamentalism, just as there are some common features to all monotheistic religions. There are also significant differences in doctrine and practice. The level of ignorance of religion that allows Folbre to conclude that Saudi Muslim fundamentalism and American Christian fundamentalism are both really about "the reestablishment of rules that would restrict women's rights to avoid caregiving" is appalling.

To the extent that this type of "analysis" passes for economics, it does a grave disservice to the advancement of knowledge. Roberts' novel does a far more sophisticated job of presenting both economic analysis and the criticism of it than Folbre's nonfiction. Roberts' fiction opens up a new channel to communicate important insights from economics to a wider audience; Folbre's polemic will reach only those who already agree with her and are looking for reinforcement of their view that conservatives are all "big fat idiots" who mouth simplistic platitudes. Reading Roberts' novel would be a good way for Folbre's readers to confront some serious challenges to their positions, challenges that are sensitive to the concerns non-economists have about the centrality of "greed" and self-interest in the economic way of thinking. Too bad Folbre couldn't have read Roberts' book before writing her own.

Andrew P. Morriss is Galen J. Roush Professor of Business Law and Regulation at Case Western Reserve University School of Law.

1. For those looking for an introduction to the economic analysis of family issues I recommend the incisive and accessible paper by Robert A. Pollack, "Gary Becker's Contributions to Family and Household Economics," a draft version of which is available free at http://depts.washington.edu/crfam/seminarseries01-02/Pollak.pdf (a later version is available for a fee from www.ssrn.com); Gary Becker's A Treatise on the Family (Harvard Univ. Press, enlarged edition, 1991); and Richard Posner's Sex and Reason (Harvard Univ. Press, 1994).

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