ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Adam Smith Revisited

Beyond the Invisible Hand: Groundwork for a New Economics by Kaushik Basu (Princeton: Princeton University Press and New Delhi: Penguin Books), 2011; pp 292, Rs 399.

It is rare that a senior and distinguished economist writes for lay­persons who might be unschooled in technical economic theories. Kaushik Basu follows the tradition of his great forebear, Nobel Laureate Amartya Sen, in making complex theories understandable in lucid language. His book is ­valuable to both economists and non-economists and should be made mandatory reading for both groups. Basu’s writing, even when dealing with technical analyses, has a free-flowing style that captures the nuances of the themes he is dealing with. In addition, his flashes of gentle humour make the subject enjoyable. For sheer felicity of communication, the book is exemplary.

For example, the story I liked best is that of the hat seller. A hat seller was sitting under a tree with his wares. A group of monkeys on the tree took away the hats. As monkeys are supposed to be ­imi­tative, he threw down his own hat and predictably the monkeys followed suit. The grandson of the hat seller follo­wed his grandfather’s dictum but the mon­keys did not oblige by throwing down the hats. Their response was “you think only you have a grandfather?” This little anecdote made for a stunningly ­effective illustration of game theory. An indivi­dual’s rationality is not pre-given but subject to what others do, to learning.

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