Robert Lucas is known among economists as one of the most influential macroeconomists of recent times – a reputation founded in no small part on the critical thinking skills displayed in his seminal 1990 paper ‘Why Doesn’t Capital Flow from Rich to Poor Countries?’ Lucas’s paper tackles a puzzle in economic theory that has since come to be known as the ‘Lucas paradox,’ and it deploys the author’s brilliant problem solving skills to explain why such an apparent paradox in fact makes sense. Classical economic theory makes a simple prediction of how capital flows between countries: it should, it states, flow from rich to poor countries, because of the law of diminishing returns on capital. Since poor countries have so little capital invested in them, the returns on new investment should be proportionally far better than investment in rich countries. This should mean that investors seeking new opportunities will invest in poorer countries, making capital consistently flow from rich nations to poorer ones. But, problematically, this is not in fact the case. Having defined the problem, Lucas did what any good problem solver would: he looked critically at the criteria involved, and offered a series of possible solutions. Indeed, in just six pages, he puts forward four hypotheses to explain the paradox’s existence. The popularity of his paper, and the influence it has had, are also greatly magnified by careful reasoning embodied in Lucas’s marshalling of evidence and his explanations of the judgements he has made.

An Analysis of Robert E. Lucas Jr.'s Why Doesn't Capital Flow from Rich to Poor Countries?: Why Doesn’t Capital Flow from Rich to Poor Countries? (The Macat Library)

Business & Money

Belton, Pádraig

Economics

Macat Library

An Analysis of Michael E. Porter's Competitive Strategy: Techniques for Analyzing Industries and Competitors (The Macat Library)

Michael E. Porter’s 1980 book Competitive Strategy is a fine example of critical thinking skills in action. Porter used his strong evaluative skills to overturn much of the accepted wisdom in the world of business. By exploring the strengths and weaknesses of the accepted argument that the best policy for firms to become more successful was to focus on expanding their market share, he was able to establish that the credibility of the argument was flawed. Porter did not believe such growth was the only way for a company to be successful, and provided compelling arguments as to why this was not the case. His book shows how industries can be fragmented, with different firms serving different parts of the market (the low-price mass market, and the expensive high-end market in clothing, for example) and examines strategies that businesses can follow in emerging, mature, and declining markets. If printing is in decline, for example, there may still be a market in this industry for high-end goods and services such as luxury craft bookbinding. Porter also made excellent use of the critical thinking skill of analysis in writing Competitive Strategy. His advice that executives should analyze the five forces that mold the environment in which they compete – new entrants, substitute products, buyers, suppliers, and industry rivals – focused heavily on defining the relationships between these disparate factors and urged readers to check the assumptions of their arguments. Porter avoided technical jargon and wrote in a straightforward way to help readers see that his evaluation of the problem was strong. Competitive Strategy went on to be a highly influential work in the world of business strategy.

An Analysis of Michael E. Porter's Competitive Strategy (The Macat Library)

An Analysis of Mary Douglas's Purity and Danger: An Analysis of the Concepts of Pollution and Taboo (The Macat Library)

Mary Douglas is an outstanding example of an evaluative thinker at work. In Purity and Danger: An Analysis of Concepts of Pollution and Taboo, she delves in great detail into existing arguments that portray traditional societies as “evolving” from “savage” beliefs in magic, to religion, to modern science, then explains why she believes those arguments are wrong. She also adeptly chaperones readers through a vast amount of data, from firsthand research in the Congo to close readings of the Old Testament, and analyzes it in depth to provide evidence that traditional and Western religions have more in common than the first comparative religion scholars and early anthropologists thought. First evaluating her scholarly predecessors by marshalling their arguments, Douglas identifies their main weakness: that they dismiss traditional societies and their religions by identifying their practices as “magic,” thereby creating a chasm between savages who believe in magic and sophisticates who practice religion.

Literature & Fiction

History & Criticism

An Analysis of Ludwig von Mises's The Theory of Money and Credit (The Macat Library)

Ludwig Von Mises’s 1912 contribution to the theory of monetary policy and the current prevailing consensus in modern economic liberalism, The Theory of Money and Credit, was a milestone achievement. The author’s familiarity with the historical literature on banking and credit allows him to present a coherent theoretical structure that links private exchange between individuals, business and banks to condition the markets affecting money and credit. Through its wider influence on liberal thinkers and politicians, the Theory of Money and Credit has become a classic reference for those seeking to understand the advance of economic liberalism since the 20th century.

Michael E. Porter's 1980 book Competitive Strategy is a fine example of critical thinking skills in action. Porter used his strong evaluative skills to overturn much of the accepted wisdom in the world of business. By exploring the strengths and weaknesses of the accepted argument that the best policy for firms to become more successful was to focus on expanding their market share, he was able to establish that the credibility of the argument was flawed. Porter did not believe such growth was the only way for a company to be successful, and provided compelling arguments as to why this was not the case. His book shows how industries can be fragmented, with different firms serving different parts of the market (the low-price mass market, and the expensive high-end market in clothing, for example) and examines strategies that businesses can follow in emerging, mature, and declining markets. If printing is in decline, for example, there may still be a market in this industry for high-end goods and services such as luxury craft bookbinding. Porter also made excellent use of the critical thinking skill of analysis in writing Competitive Strategy. His advice that executives should analyze the five forces that mold the environment in which they compete - new entrants, substitute products, buyers, suppliers, and industry rivals - focused heavily on defining the relationships between these disparate factors and urged readers to check the assumptions of their arguments. Porter avoided technical jargon and wrote in a straightforward way to help readers see that his evaluation of the problem was strong. Competitive Strategy went on to be a highly influential work in the world of business strategy.

Mary Douglas is an outstanding example of an evaluative thinker at work. In Purity and Danger: An Analysis of Concepts of Pollution and Taboo, she delves in great detail into existing arguments that portray traditional societies as “evolving” from “savage” beliefs in magic, to religion, to modern science, then explains why she believes those arguments are wrong. She also adeptly chaperones readers through a vast amount of data, from firsthand research in the Congo to close readings of the Old Testament, and analyzes it in depth to provide evidence that traditional and Western religions have more in common than the first comparative religion scholars and early anthropologists thought. First evaluating her scholarly predecessors by marshalling their arguments, Douglas identifies their main weakness: that they dismiss traditional societies and their religions by identifying their practices as “magic,” thereby creating a chasm between savages who believe in magic and sophisticates who practice religion.

Ludwig Von Mises’s 1912 contribution to the theory of monetary policy and the current prevailing consensus in modern economic liberalism, The Theory of Money and Credit, was a milestone achievement. The author’s familiarity with the historical literature on banking and credit allows him to present a coherent theoretical structure that links private exchange between individuals, business and banks to condition the markets affecting money and credit. Through its wider influence on liberal thinkers and politicians, the Theory of Money and Credit has become a classic reference for those seeking to understand the advance of economic liberalism since the 20th century.

See the best price to sell, buy, or rent books by Belton, Pádraig. BookScouter helps to compare book prices from 25+ online bookstores and 30+ buyback vendors with a single search.

Books by Belton, Pádraig

See the best price to sell, buy, or rent books by Belton, Pádraig. BookScouter helps to compare book prices from 25+ online bookstores and 30+ buyback vendors with a single search.

An Analysis of Robert E. Lucas Jr.'s Why Doesn't Capital Flow from Rich to Poor Countries?: Why Doesn’t Capital Flow from Rich to Poor Countries? (The Macat Library)

An Analysis of Michael E. Porter's Competitive Strategy (The Macat Library)

An Analysis of Mary Douglas's Purity and Danger: An Analysis of the Concepts of Pollution and Taboo (The Macat Library)

An Analysis of Ludwig von Mises's The Theory of Money and Credit (The Macat Library)

An Analysis of Michael E. Porter's Competitive Strategy: Techniques for Analyzing Industries and Competitors (The Macat Library)

An Analysis of Robert E. Lucas Jr.'s Why Doesn't Capital Flow from Rich to Poor Countries?: Why Doesn’t Capital Flow from Rich to Poor Countries? (The Macat Library)

An Analysis of Mary Douglas's Purity and Danger: An Analysis of the Concepts of Pollution and Taboo (The Macat Library)

An Analysis of Ludwig von Mises's The Theory of Money and Credit (The Macat Library)