A RESTRICTED FIELD. The subtitle of Robert Frank's The Economic Naturalist's Field Guide is Common Sense Principles for Troubled Times. A more accurate subtitle might be Democratic Party Commonplaces from the New York Times. Book Review N^o. 19 will be short, and convey my disappointment. Professor Frank's Economic Naturalist projects for principles students are a genuine improvement on the state of the art (the idea builds on the Handy Dandy Guide, more commonly used in middle and high school). Although the book includes a few columns about the more inspired projects, most of the content, which is a collection of those Times columns in any event, focuses on positional arms races, winner-take-all-markets, and a smattering of behavioral economics, particularly those results most useful for Democratic Party court intellectuals. I can't fault Professor Frank for focusing on areas of economics in which he has made solid contributions, and I don't object to putting a collection of related columns into book form. I do object to describing the collection as something other than it is.

I propose a more technical point as well. In Professor Frank's various meditations on positional arms races, he suggests that additional gold prospectors are probably socially inefficient, as new prospectors derive some of their wealth from beating existing prospectors to deposits that would likely be discovered anyway. That's not an unreasonable approach to valuing an exhaustible resource. He then goes on to compare the prospectors with hedge fund managers, suggesting, once again, that new hedge fund managers derive some of their wealth from beating existing managers to assets that would likely be discovered anyway. I'm not sure I accept that, as hedge fund managers can differ in their management style, and perhaps a few more contrarian managers deriving their wealth from doing some genuine hedging might have diminished the bubbles that give economists lots of work. That he compares hedge fund managers with creative writers is telling (in identifying a social loss with collegians getting into the positional arms race in finance rather than following their creative instincts) -- he hasn't ruled out the possibility of additional composers, directors, or writers profiting by beating existing creatives to tunes or stories that would likely be written anyway. That he says nothing at all about the crafts of research or teaching is also telling: didn't a Cornell professor come up with positional markets and with naturalist projects that could have occurred to a Harvard professor? And thus back to one of my pet themes: the solution to some positional arms races is to augment the supply of positional goods, such that the status of having them is buried under so many of them. (Where is the status in a computer these days?)

(Cross-posted to 50 Book Challenge.)