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The Nature of Economies | |||
The Nature of Economies |
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It is no accident that Toronto is often rated as one of the most livable cities in North America -- Jane Jacobs lives there, and she takes an active role in helping shape her adopted city.
She also does something original; she actively examines the topics she writes about, instead of relying upon the mere observations of others. When you use a chunk of granite, a bar of steel or the speed of light, it's worth knowing that inanimate objects don't change much. But, Jacobs and all other social scientists deal with people; and people are continually changing. One of her central themes is that since Adam Smith in 1776, economists have tended to ignore the real world.
"Smith himself was partly responsible for that blind spot," Jacobs writes. "He led himself and others astray by declaring that economic specialization of regions and nations was more efficient than economic diversification.
"The theorists after Smith retreated into their own heads instead of engaging ever more deeply with the real world," Jacobs writes. "Plenty of observable, germane facts were lying around in plain sight, ready and waiting to lead Smith's insights, straight as directional arrows, into the subjects of development and bifurcations."
Adam Smith overturned centuries of thinking when he wrote, "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but from their regard for their own interest." Until then, there was a general feeling that God, or Nature, or other supernatural force provided our sustenance; Smith said personal interest is the key to economic life.
Smith takes that idea the next step: Yes, natural products exist, but we can wipe them out by overuse. Every system in nature is harmed by over-indulgence; nothing can be exploited without some collateral cost. Excess carries the seeds of its own destruction; humans are a part of nature, and thus subject to similar limitations. Thus, the book's title -- "The Nature of Economies." Every society is a part of nature; people are always subject to the inevitable laws of nature.
This isn't tree-hugging ecology or a `Save a Whale for Jesus' fad; it's the fundamental rules by which nature, and thus our communities, live on a day-to-day basis.
Consider a real example: Phoenix literally "paves the desert." Twenty years ago, climatologists knew this raised night temperatures, because asphalt soaks up heat during the day and radiates at night. Night temperatures have risen by almost 10 degrees -- which adds immensely to air conditioning bills, and greatly reduces livability. Yet, city officials steadfastly ignore this feedback to pursue a policy of unlimited growth. Is this unusual? Think of Los Angeles traffic, Las Vegas, Albuquerque, El Paso, and Tucson -- each with its own growing problems.
Jacobs argues the "nature of economies" means being aware of feedback, and facing issues before they become a crisis. Despite her living in Toronto, do Canadians do it? No, Canadians ignored overfishing of the Grand Banks -- once the richest fishing area in the world -- until the area was fished out which caused the economy of Newfoundland to collapse.
In brief, that's her lesson. Ignore feedback, ignore the evidence in front of our eyes, and we'll have economic and social collapse. Nature never offers "Get out of Jail Free" cards.
Unlike many ecologists, Jacobs doesn't offer simplistic "get rid of the automobile" solutions. She says problems will arise whatever we do; the solution is in recognizing the feedback, then responding to the problem. In other words, "Look around." Then ask, "What can we do different?" She doesn't offer solutions; she offers thought processes to enable intelligent people to find solutions.
Does she have a valid point? Well, Toronto officials listen to her, and have one of the best cities in North America. It's time her audience was expanded.
Jane Jacobs is a bit like Agatha Christie. A no nonsense view of economics and the city as an economic engine. I do sometimes wish she would look a little deeper into the policies she references.
A fantastic book that sabotages as many preconceptions about the dismal science as it can. It's cast in a wonderful format, I can barely abide economics and I read this in one sitting. Some pretty ballsy conclusions, too. Attacking government subsidies wholeheartedly in a book that is mired in shades and nuance brings it all to a refeshing close. Although she sees economies as naturally developing and interacting entities, it would have been interesting if she could have explored the implications of state involvement; i.e., tax and tarrifs, the fiscal policies behind them. Since states and economies are coexisting -and in the best cases mutually cohabitating- it is appropriate to explore their relationship within Jane's context. All in all, though, lots of fun. It's awesome to read all of these new books coming out that call for an imaginative, multi-dimensional awareness of systems and laws. I'm looking forward to reading her previous works.
Jane Jacobs' compelling little book deals with fundamental issues concerning how economies work. It is written as a Socratic dialogue among a group of friends. This format allows for a very engaging and insightful treatment of some fairly complex topics, but at the same time it makes it difficult to place the dialogue in the rich academic literature on these topics. Jacobs focuses her effort in this dialogue on the basic functioning of economic systems, and the fundamental observation that they must obey the same laws of physics, chemistry, and evolutionary biology, as any other complex adaptive system. Jacobs is most famous for her work demolishing the doctrinaire views of city planners and forcing them to look at the way real cities really work (Jacobs, J. 1961. The death and life of great American cities. Random House). In this book she does the same thing to economists, forcing the confrontation of unquestioned theory with reality. She also emphasizes some important philosophical positions that distinguish conventional from a more "ecological" economics. The most basic of these is the idea that humans and their artifacts are just as much a part of nature as any other organism. The Cartesian dualism that underlies conventional economics (and much of conventional science) assumes that humans are somehow fundamentally different from the rest of nature. This sets up a basic (and false) environment vs. economy dichotomy and leads to a host of other conceptual difficulties. The truth is that humans and their artifacts behave much like all other complex adaptive systems. The book is a treatise on how complex adaptive economic systems work (especially urban systems) and the kind of science and policy that flow from this understanding.
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