Juicy, Delicious Firms and Reproducing Cars

by Gene Callahan

After hearing good things about Kenneth Boulding for a number of years, I eagerly snapped up his A Reconstruction of Economics for a dollar at New York’s best used bookstore. (The original price? $1.95) Well, the book is interesting, but I’m sorely puzzled by some of the moves Boulding makes here. Is it really useful to consider cars as organisms with a “birth rate” and “death rate”? Are firms usefully viewed as organisms trying to keep their balance sheets in “homeostasis”? Do any firms really want to see static balance sheets rather than ever growing net worth? Boulding claims the homeostatic balance sheet approach can tell us a good deal about firms without introducing prices or profit maximizing. But don’t the entries for these balance sheet items depend on prices? And isn’t profit maximization the whole reason that a firm wants to balance them as much as it does?

Is this book representative of Boulding’s work? Did he continue with this line of thought later in his career? And did he always have that wacky hairdo?

7 thoughts on “Juicy, Delicious Firms and Reproducing Cars

  1. A quick note on the history of the Atlantic Bookshop, which is indeed the best second hand bookstore in New York. Before it was 12th Street Bookstore, it was Academy Books, which was located on 18th Street, a few doors west of Fifth Avenue on the south side.
    Today Academy Records occupies the space just west of where the bookstore was. Skyline Books is accross the street, and is worth a visit. (I think it’s still there, continuing its 17-year run.)
    Academy was founded in 1976 by Mr. Kahn (I can’t remember his first name), and specialized in history and philosophy, although it was fairly strong in economics too. The shop acquired a nice library in about 1988, which included quite a few Austrian titles. I bought the original Free Press edition of Menger’s Principles, but passed on Boehm-Bawerk’s Capital and Interest, which I had.
    Susan Sontag was said to be a regular shopper there, but I only saw her once, in 1991.
    The owner committed suicide in July or August 1994 (there was an obituary or a notice in the NYT). He seemed like a bit of a misanthrope. He jumped out of a window in the top floor of the Gramercy Hotel. The store, which probably employed ten or twelve people at one time, began a long, slow decline, and closed a couple weeks before the end of 1999. Two (I think) of the employees started 12th Street a few months later, although if memory serves, they moved briefly to another location before going to 12th Street (between Broadway and 5th Avenue on the north side). They are dedicated bibliophiles and very helpful to their patrons.
    Alas, this sort of shop seems to be dying a long slow death.

  2. Gene and Mario,

    Boulding is a fascinating thinker who was a wonderful teacher. His reconstruction of economics along accounting lines is one of his efforts, but perhaps not what fascinates me. Though I would read it a bit more favorably than Gene is. But almost all of Boulding’s work have flaws as well. Reading him straight up reveals his blind spots, reading him charitably points to possibilities. Even look at works such as his pioneering book in conflict and defense economics.

    I prefer his works such as The Image (a subjectivist track) and his essays such as “After Samuelson, Who Needs Smith?” or his wise remarks in the JPE on Samuleson’s Foundations and the use of mathematics in economics.

    Boulding was a polymath and like Hirschmann, Schelling, Shackle, Heilbroner, Galbraith, etc. had a way with words, thought philosophically about the discipline, and sometimes said very interesting things about economics as a discipline and the social world.

    Now as for Boulding the person — just amazing actually. Read Robert Wright’s Three Scientists and Their God for a good capturing of Boulding as a person at the time that I had him as a teacher. Just a wonderful and generous man.

    As for his hair — yes that is a life-long style as far as I can tell. Part of who he was.

  3. I have read a bit of Boulding, also. I was first attracted to him because he took a more Austrian view of capital and argued with Frank Knight in the journals back in the 1930s.

    I recall, once at a meeting of the SEA many years ago there was a session on Frank Knight, at which Kenneth Boulding and James Buchanan spoke.

    Boulding hammered away that he just did not understand Knight’s views on capital. To produce anything, he said, you apply the resources today and tomorrow comes the stuff you wanted. And between today and tomorrow is a period of time. What didn’t Knight understand in this?

    The look on Boulding’s face implied, “Oh, Professor Knight, what other planet do you come from?”

    I agree with Peter Boettke that Boulding was often very suggestive in books like his one on, “The Image.” But Alfred Schutz’s work with a similar title is far better.

    I’m often impressed by the way he insightfully sees the limits and weaknesses in much of the mainstream approach. But I am almost always less persuaded by his own positive suggestions as to how the problems should be looked at.

    He had a very witty mind. I don’t have it right in front of me, so I cannot quote it, but he has one article that is very funny about how changing from the “mile” system to the metric system was undesirable because of the way it would ruin many common colloquial phrases and much imagery in the English language. It is very cute the way he does it.

    Richard Ebeling

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