CEI Book Review: The Way the World Works

The Way the World Works

20th Anniversary Edition

by Jude Wanniski

Introduction by Robert Novak

Gateway Books (1998)

Softcover, $14.95

ISBN 0-89526-344-0



In a previous incarnation, I served as executive editor of Gateway Books, an imprint of Regnery Publishing bent on republishing classic works of literature, philosophy, theology, and, of course, economics. In the last category, our stable of authors included luminaries such as Adam Smith, Aristotle, Karl Marx, F.A. Hayek, and John Stuart Mill. I was thrilled when the opportunity arose in 1998 to publish the 20th anniversary edition of Jude Wanniski’s seminal classic, the audaciously titled The Way the World Works. It is a bawdy book, one haughtily promising to deliver an explanation of the great forces of human nature which shape our society. To a large degree it succeeds. I wrote at the time of publication that Wanniski’s book “ranks with the most important that have themselves fueled political action”—Smith’s Wealth of Nations, Marx’s Das Kapital, and John Maynard Keynes’s General Theory. Wanniski’s The Way the World Works indeed sparked a revolution. It was the economic blueprint for the Reagan economic revolution, which overturned a century of economic thinking on fundamental issues of taxation and economic incentives. Jack Kemp, Steve Forbes, and Robert Novak (who contributed the introduction to this edition) all count themselves as converts whose fundamental outlooks on the way the world works were changed and shaped by this precocious book, the product of the genius of a young editorial writer at the Wall Street Journal. Wannisksi’s work is a triumph of popular economics. He grasps that economics is the study of how people live and act day to day. It isn’t the study of graphs and currency flows and GNP numbers as much as it is the study of human interaction. Wanniski understands these simple points. He provides a work impressive for its breadth of original thinking, as well as for the impact it had and continues to have on our politics and our daily lives. Kemp has termed the book “a brilliant synthesis of both politics and economics.” Economist Arthur Laffer, whose “Laffer Curve” explanation of the relationship between tax rates and tax revenues was popularized by Wanniski, has claimed, “In all honesty, I believe it is the best book on economics ever written.” I think they may be on to something. My friends and coworkers know that I am loathe to proselytize, but with The Way the World Works I make an exception. Many a dog-eared copy have I pressed on those I think need exposure to the Good Word. I have often thought that 200 years from now people will regard this book in much the way present generations regard the works of Adam Smith and other giants. That was the idea behind my thinking to republish The Way the World Works in 1998. It is the same thinking behind my recommendation of that book today.

~Max Schulz, Editor, CEI UpDate

Read Robert Novak's Introduction to The Way the World Works.

The Way the World Works can be ordered online from Laissez Faire Books, or by calling 1-800-326-0996.