The Invisible Heart. An Economic Romance

Citation

Grassl, W. (2003), "The Invisible Heart. An Economic Romance", Journal of Consumer Marketing, Vol. 20 No. 5, pp. 486-488. https://doi.org/10.1108/07363760310489742

In recent years, a small stream of books have appeared that attempt to convey the principles of economics in the form of fiction – or, at least, to write novels incorporating economic ideas. Marshall Jevon’s (well, actually Kenneth G. Elzinga’s and William Breit’s) Murder at the Margin and Fatal Equilibrium made the beginning; Jonathan B. Wight’s Saving Adam Smith and Tinker Marks’ (in reality Mark Montgomery’s and Irene Powell’s) Theoretically Dead followed; and Russell Roberts’ The Invisible Heart is, for now, the last in this series. These books are on the syllabi of many economics classes and, in 2002, were the topic of a session at the annual conference of the American Economic Association.

The lineage is, of course, much older, and it is difficult to decide which piece of belles lettres should be posited at its beginning: Leonard Read’s “I, pencil” (1958), Frédéric Bastiat’s “That which is seen, and that which is not seen” (1850), Harriet Martineau’s Illustrations of Political Economy (1832), or Bernard Mandeville’s Fable of the Bees (1714). The genre of the textbook‐novel (or, as the case may be, of the textbook‐story or the textbook‐poem) indeed does have some history, originating in moral tales explaining the principles of classical economics or making the case for or against socialism. These are not merely books presenting a setting in which economic forces are at work, and entrepreneurs are heroes or, more often, villains, as in many of Charles Dickens’, Edward Belllamy’s, or John Steinbeck’s novels. Quite akin to Ayn Rand’s littérature engagée in style. In spirit, these new novels want their readers to reflect on marginal utility, subjective value, free trade, and the role of markets, typically from a perspective closer to free‐market principles. None of these books may pass for great literature; but this is not the standard on which they would, or arguably should, be judged.

The Invisible Heart, which its subtitle classifies as “An economic romance”, develops the blossoming love story between a high school economics teacher and an English instructor. Economist Sam lives, breathes, and teaches capitalism, while poetry‐loving Laura sees the world as one of victors and victims, with individual selfishness and corporate greed as the ultimate evils. As the plot unfolds, “thin” as it may be, the characters discuss private charity and government intervention, corporate responsibility and consumer safety, fairness and wage controls, insider trading, and health sector economics. Other public policy issues that are treated include school vouchers, the transformation of labor markets, R&D and innovation, the determination of teacher salaries, union membership, tradable pollution permits, the protection of species, resource conservation, and paternalistic safety regulation such as the requirement to wear seat belts. In all cases, the author argues the superiority of market solutions over government intervention and regulation.

Through teacher Sam, the author, himself an economics professor at Washington University in St Louis, explains scarcity, externalities, incentives, and the positive effects of the “invisible hand” of the market. Sam even convinces Laura that belief in this invisible hand does not imply an invisible heart. Initial philosophical differences notwithstanding, he wins her love, and thus economics and ethics are reconciled. Most importantly, the reader learns that good economists are the very last persons to believe that money is all that matters. And in the end, we find that Sam is no less idealistic than Laura. He is willing to risk his job, perhaps his career, for his beliefs.

However, the author also lets a parallel plot unfold. Erica Baldwin, bleeding‐heart consumer advocate and director of the Office of Corporate Responsibility at the FTC, challenges and attempts to prosecute Charles Krauss, CEO of HealthNet and archetype of a greedy and selfish capitalist. Krauss may well be guilty of corrupt business practices; but does not he, too, promote the general good by developing and distributing drugs that otherwise may not be available? Is his contribution to society not even greater than that of the well‐meaning but ill‐guided bureaucrat, whose job is that of destroying wealth instead of creating it?

Two passages seem particularly noteworthy: the explanation of scarcity and cost by the example of a room full of pistachios which are gradually consumed, thus raising the cost of finding unopened nuts amidst the shells (Chapter 1); and the discussion of the social responsibility of business, with its clear allusion to Milton Friedman’s assertion of the lack of any such responsibility (Chapter 11). More in the style of a textbook than a novel, the author added an appendix listing sources and further reading.

With this novel, Russell Roberts proves himself to be among the handful of economists who excel at communicating sound economic ideas to a broad audience. Communication talent of the sort possessed by Milton Friedman, Thomas Sowell, and Walter Williams is rare – and getting rarer as economic instruction becomes increasingly abstract. Roberts is unequaled in his ability to show that free markets generate impressive coordination, efficiency, and material bounty, but also an unprecedented profusion of humane results.

And yet some may claim that the book has its shortcomings as a convincing advocacy of free markets. Marketers know full well that markets hardly ever perform as perfectly as textbook economics would make one believe. The main characters are ideal types that admit of no shadings. But does reality always present us with such clear‐cut cases? Are the book’s protagonists therefore totally credible? Does not Sam epitomize the ideological believer in first principles, much empirical evidence notwithstanding? Is not Krauss simply guilty of criminal misconduct, good outcomes or not? Caricature is certainly a staple of literature. Whether in this book it is overdrawn or not remains for the reader to decide.

Others will criticize the author for not subscribing to a normative business ethics. With Friedman, economist Sam holds that “the social responsibility of business is to increase its profits”. Particularly in the wake of the Enron scandal and other cases of flagrant corporate misconduct, many may regard this as too weak a position for the future of US business.

Coming from a different paradigm than the author espouses, such arguments should be discussed on their own merits. They must not detract from the fact that this book is a most welcome addition to the collection of textbook‐novels and a first‐rate exposition of the economic way of thought.