Friday, July 18, 2008

Review of the Economist Magazine

The Economist is one of the world's most respected publications, founded in September 1843. It is edited in London, but aims at being a global magazine. Half of its 1.3 million copies per issue are sold in North America. It is owned 50% by the Financial Times (a sub division of Pearson PLC) and 50% by private shareholders including members of the Rothschild Family.

It is not focused just on economics, but, examines issues relevant to current affairs. It claims
"to take part in a severe contest between intelligence, which presses forward, and an unworthy, timid ignorance obstructing our progress."
The Economist has certainly cultivated a reputation for being a thought provoking and informed read; but does it deserve this reputation?

Positive Aspects of The Economist

  • The writing style is good, concise and sharp. The economist largely avoids the sentimentality and populism of the mass media. I wish my students would read it, just to improve their vocabulary and writing style.
  • It has A Sense of Humour. (e.g. sending Freakonomics author Stephen Dubner a Pasty through the post) It's not exactly comic book stuff, but some remarks are at least witty; helping to make topics like financial derivatives a little less dull.
  • They can admit they get things wrong. For example, although they initially supported the invasion of Iraq, they have since admitted that the invasion was deeply flawed. At least, this shows a little humility mostly lacking in politicians.
  • Economic Perspective. I generally support their rationale for carbon taxes and road pricing - based on the externalities ignored by the free market. This shows they are not dogmatically pro-market as some may believe. As they are not running for election, they give the impression of evaluating topics on grounds of social efficiency rather than appealing to populist opinions.
  • Social liberalism. E.g. Support for abolition of death penalty
  • Not Complete Ideologues. Although the Economist could be described as socially liberal and fiscally conservative.
  • Give Corrupt Politicians a hard time. The Economist rarely shirks from giving corrupt politicians and regimes a hard time.
  • Forecasting is Not Bad. Although they get things wrong - like predicting cheap oil for the foreseeable future in 1999. They have been able identify some bubbles such as the internet dot com bubble in 1999 and the global housing bubble in the 2000s.
  • Useful Statistics. I often use the statistics and country briefings for essays and teaching purposes. Their Big Mac Index has made it into textbooks as a useful introduction to ideas of PPP
  • Compared to some of their Rival Newspapers / Media, The Economist seems a model of journalistic integrity.

Negative Aspects of The Economist

  • It gets a little tiresome the way that they feel nearly any economic problem can be solved through 'privatisation, deregulation and more flexible labour markets.'
  • Their judgement is often sadly lacking. E.g. Supporting Bush in 2000, and supporting the invasion or Iraq. If it had been any magazine, I would have cancelled my subscription; but, because the Economist has a high quality of journalism I bit the bullet and continued to subscribe. At least they don't waste time trying to justify their decision in the face of contrary evidence.
  • All articles conform to the same editorial mode, suggesting writers have to start from a certain viewpoint; this creates less scope for journalistic independence.

As an economics teacher, the economist is an invaluable resource. It reflects a certain ideology and you certainly wouldn't want it to be your only reading material. But, as a simplified guide to global problems and issues, there are few better starting points than the Economist.
The Economist in The Simpsons

In The Simpsons episode "Catch 'Em If You Can", Homer is traveling by air in first class and says "Look at me, I'm reading The Economist. Did you know Indonesia is at a crossroads?" and when questioned by his wife, he simply replies "It is!" Four days later, with its customary dry wit, The Economist alluded to the quote, and published an article about Indonesia referring to the "crossroads". The title of the issue was "Indonesia's Gambit".

What Do You Think of the Economist?

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