Adam Smith had professed specialization and division of labour as an important factor behind increased productivity, translating into higher levels of national output, the true “wealth of nations”. In Sister Carrie, Theodore Dreiser recognized, as did Adam Smith, that the degree of specialization is limited by the extent of the market. In Travels with Charley, John Steinbeck considers another trade-off associated with specialization and economies of scale in operating various kinds of businesses as national franchises.

Thomas Mann’s Doctor Faustusis a historical and cultural investigation of how Germany fell under Nazi control after World War I. The British economist John Maynard Keynes opposed the Treaty of Versailles that ended World War I because he believed the reparations imposed on Germany were too severe. Charles Frazier describes the effects of inflation in the Confederacy in Cold Mountain, while Erich Maria Remarque recorded the post-World War I German hyperinflation in The Black Obelisk.

“Captains of industry”, “robber barons”, eccentrics and psychological misfits, inventors, innovators, profiteers and entrepreneurs have been described in all of these ways. Successful entrepreneurs leave a trail of what the Austrian economist Joseph Schumpeter described as “creative destruction”. Shakespeare’s Merchant of Venice is Antonio, not Shylock. Antonio is well aware of the risks of his business, and tries to spread his risks across several investments. While a discussion on the level of profit is fair, not just legally but “mawrally” appears in Thomas Wolfe’s From Death to Mourning. Balaam, the merchant in Alexander Pope’s Moral Essays, starts out well enough, but with unexpected success, falls victim to pride and ostentation, since Satan is “wiser now than of yore, and tempts by making rich, not making poor”.

Robert Frost’s Mending Wall symbolises private property, much the same way as Sebastian Junger’s The Perfect Stormilluminates the nature of property rights. Relocations and dislocations, as during the Great Depression, caused by economic and technological forces are sometimes traumatic episodes in the life of a person or a family, as shown in John Steinbeck’s Grapes of Wrath. Robert Frost’s The Road Not Taken is a clear description of a choice involving an opportunity. The speaker in the poem takes the road “less travelled by”, and this makes “all the difference”.

Edward Bellamy’s Looking Backward is a modern example of a utopian novel depicting a society in which the fundamental economic problem of scarcity has been solved by reforming society, and perhaps even human nature. The Parable of the Water Tank signifies a satire of capitalism and mainstream economists, incorporating many key ideas by Karl Marx such as only labour creates wealth, profits represent a surplus value, markets produce or soon become monopolies.

Ralph Waldo Emerson apparently never wrote, and may or may not have said that, if someone invents a better mousetrap, the world will beat a path to his or her door. His Journal often addressed broader issues concerning why some people and nations produce and earn more than others. In an epistle from Alexander Pope’s Imitations of Horace, and also in the original poem by Horace, we have an example of what economists call the income effect. “A soldier’s demand for safety initially decreases when he loses his little purse of gold.” Another type of market failure often develops when people hire or elect other people to represent them in a wide variety of situations. Victor Hugo described such problems in Les Miserables.

Disparities, poverty and income redistribution policies constitute a staple in modern day economics. An excerpt from Mark Twain’s Connecticut Yankee in King Arthur’s Court also deals with these issues. Orwell’s The Road to Wigan Pierdescribes the circumstances facing a family living “on the dole” in England, and the perverse incentives that many public assistance programmes in Europe and the United States featured through much of the twentieth century. The famous speech from Shakespeare’s Troilus and Cressida~ “Take but degree away and hark, what discord follows” ~ was emphasized by E.M. Tillyard and other literary critics who have cast Shakespeare as a defender of a conservative and hierarchical social order.

In a passage from The Octopus, Frank Norris juxtaposes scenes of a starving widow and a child with a lavish feast served at the opulent home of a railroad president. In A Moveable Feast, Ernest Hemingway recalls the poverty he experienced before achieving financial and artistic success. Kurt Vonnegu’s short story, Harrison Bergeron, is a scathing, hilarious, and sobering satire of government policies aimed at achieving complete equality. The important subject of environment could not be omitted. Charles Dickens “dark satanic mills” and Arundhati Roy’s The God of Small Things illustrate the concepts of public good and externalities.

As a guide to the economics of everyday life, Tim Harford’s The Logic of Life: The Rational Economics of an Irrational World encompasses subjects ranging from the terrifying logic of “rational racism to a cold calculus of divorce rates”. In yet another volume in this genre, terming economists “passionate nerds”, in her The Soulful Science:What Economists Really Do and Why It Matters, Ms Diane Coyle, a visiting professor at the University of Manchester, portrays several main characters of the dismal science, among others, Angus Maddison recalling his uncle’s soapbox protests against the evils of the Depression, Dauglass North while choosing between a career documenting the poor and one explaining their fate, Steven Levitt transformed from a passionate nerd into a popular celebrity, and Joseph Schumpeter, an “irritating man” who “boasted about his brilliance as an economist and as a lover”.

In a letter to US President Franklin Delano Roosevelt towards the end of 1933, while approving the general direction of his policies, John Maynard Keynes wondered whether some of the advice Roosevelt was getting “is not crack-brained and queer”. The world continues to search for viable answers to challenges it faces which are as daunting, if not more, as those during the Great Depression: large segments of the labour force cut off from the global economic surge; increasing inequality and poor earning prospects for younger, little educated workers; looming existential threat of climate change, among many others. Like Daniel Bell elicited a debate half a century ago by questioning the validity of humanistic ideologies, repudiating youthful idealism and baring “the ambiguities of theory”, “the complexities of life”, and “the exhaustion of utopia”, the concept of GDP as the criterion of a nation’s well-being is under the lens.

As the annual UN-backed World Happiness Report, much similar to the Stiglitz-Sen-Fitoussi Commission-inspired OECD Better Life Index advances the “Beyond GDP” agenda, economists grapple with an old paradox about growth and happiness. Many among mainstream economists call upon the community to rise beyond marginal fixes and suggest transformation of the structures and power asymmetries which rule the global economic game. A radical change somewhat akin to Roosevelt’s credo ~ “bold, persistent experimentation”?

(The writer is Senior Fellow, Asian Institute of Transport Development, and former CMD, Container Corporation of India)