Book Review: Economics for the rest of us

19th February 2013
Book Review: Economics for the rest of us

The Wisdom of Ants: A Short History of Economics by Shankar Jaganathan; Tranqebar Press; Rs 295.


Economics can be boring, dry subject. Yet many of us need to have a working knowledge of economics – and the challenge so often, is to find a short cut, a sort of dummies guide to the key concepts in an attractive and manageable package.   This is easier said than done. The best economists  and academics  are often lousy communicators.     Shankar Jaganathan is an exception – and his short history of economics is   a lively, reader-friendly guide  to the leading ideas in economics from  the Ancient World to the global crisis  of  2008. 

At one time or another, Jaganathan has been associated with Wipro,  the Azim Premji Foundation, Indian Institute of Science, Union Bank of India, Oxfam India and  the Narsee Monjee Institute of Management Studies. This wide experience is  apparent, in the telling comments with which the author peppers the narrative  as he reviews the birth of economic thought in four civilisations exemplified by the work of four pioneering thinkers:   Aristotle  among the ancient Greeks, Kautilya aka Chanakya around 400 BC in India,  the Chinese Lord Shang around 1500 AD and  the  Tunisian Islamic scholar Ibn Khaldun  in the 14th century AD.

Jaganathan  uses  the work of later thinkers  like Adam Smith and John Maynard Keynes  to highlight how   modern-day greed  overwhelmed  the innocence of the old world where  even the collection of interest for  a loan was seen as sinful usury.  Up until   the 15th century, pawnshops in Europe  were seen as charitable institutions to help the poor and needy – and  interest if charged at all was strictly limited to 6 percent to cover administrative costs. We have come a long way  from those times to  a present age where  credit card rip-offs  have the stamp of  official sanction.

Without stating the obvious, Jaganathan sets the reader thinking about the true origins of  current trends – like nepotism in politics and business.   The Harvard-Kalahari Project, a pioneering study of hunter-gatherer societies in Southern Africa, which covered 27 years from 1963 to 1991, observed  that nepotism in the sharing food among mates was a genetic trait critical for their survival. Today  what was essentially a survival strategy has taken the form of  sons and daughters stepping into the  well-heeled shoes of politically powerful parents!

One of the most interesting outreaches of this book is the very telling correlation that Jaganthan draws between the winners of the Nobel Prize for Economics since its inception in 1969 and the  domination, of  capitalist free market economics… right up to the global recession of 2008, when for the first time the principles of socialism derided for so long began to seem much more sensible.The book derives its title from the fable of the ants   who busily gathered food in the summer, while the grasshoppers lived a carefree life. When winter came, the prudent ants could live off their store, while the grasshoppers were starving. The Wisdom of Ants,  is the foundation of economics as a distinct discipline, suggests Jaganathan, even as he views economic ideas through an ethical, social and political prism.The result is   arguably one of the most useful and readable books on the subjects for a long time – a necessary and sufficient companion,  for  professional as well as lay readers   grappling with the complex environment of business and governance today-  Anand Parthasarathy