The Fatal Equilibrium is a mystery novel in which the hero, Professor Henry Spearman, applies economic theory to answer the question: Whodunit? Spearman also uses economic theory as a lens to scrutinize all human behavior.
The college classroom is a congenial forum for using The Fatal Equilibrium. The economic principles found on its pages are explained through the novel's story in a way that complements these principles as they appear in a textbook. As reviewer John Haring said in the Wall Street Journal about Marshall Jevons' mixture of fiction and economics, "if there is a more painless way to learn economic principles, scientists must have recently discovered how to implant them in ice cream." The Ballantine paperback edition of The Fatal Equilibrium makes for a relatively inexpensive supplement. The book is one many students will discuss outside the classroom, even with others not enrolled in the course.
The Fatal Equilibrium is best suited for use in principles of microeconomics classes, though Henry Spearman's first appearance in Murder At The Margin has been discussed in intermediate price theory classes and law and economics courses in schools of law.
What follows are suggestions on the use of this mystery in the classroom and questions that can be asked of students who have read it. The questions have been written to be appropriate for tests or classroom discussion.
Before The Fatal Equilibrium Is Read
Inform students that The Fatal Equilibrium is a "British traditional" or "cozy" within the mystery genre. It will not, perhaps to their disappointment, have any explicit violence or graphic sex. British traditionals are not written in the vein of a Mickey Spillane or John MacDonald novel. British traditionals, rather, are cerebral - works of the mind, not of adrenalin. Parenthetically, not all authors of British traditionals are British. Students may have read the books of Emma Lathen, the pen name of two American women, or Ellery Queen, the pen name of two American men.
Explain to students that reading authors of British traditionals, like Dorothy Sayers or G.K. Chesterton (to cite two of Jevons' favorites) or the widely read works of Agatha Christie, requires a certain mindset. This is because a game is being played between the author and the reader. This game is the most fundamental characteristic distinguishing a mystery from other works of fiction.
The game is for the reader to figure out "whodunit" before the author reveals the solution. As in all games, there are rules. Students should be acquainted with them before they read the book. Here are some that apply to the author:
- The author must not introduce the murderer at the very end of the book.
- The reader must know all the facts relevant to the solution; all the clues must be in the text.
- Everything that occurs must be possible (even if improbable). There are no miracles in mysteries. Unlike fantasy or science fiction literature, rooms cannot decompose or the murderer end up being a demon, a ghost, or a creature from another planet.
- Facts must be facts. If the Rivanna river flows into the James river in the real world, a mystery should never describe it as flowing into the Hudson.
The reader is to outwit the author by figuring out "whodunit" before the denouement. This means the reader is not to peek at the last chapter first. It is also a "foul" if the reader simply guesses whodunit. Hunches, even correct ones, count for naught. The reader is to make sense of the clues and deduce correctly who committed the crime.
It is useful to inform students, in advance of their reading The Fatal Equilibrium, that the hero is an economist, one who is somewhat like Nobel Laureate Milton Friedman in appearance and demeanor. Students should know that in mystery literature there are several types of heroes who use different paradigms to solve the crime. Hercule Poirot, a character created by Agatha Christie, uses psychology. Miss Marple always is successful applying womens' intuition. Rabbi David Small draws upon Talmudic reasoning. Henry Spearman will be found using economic theory.
In the Classroom
The appropriate leadoff question, better for classroom use than on a test, is simply: did anyone solve the mystery? The focus here is not on guessing, but solving.
If some students solved the mystery before its solution was revealed, ask them to reconstruct the process of reasoning, based on the economic theory of utility maximization, which leads to the correct solution.
If no one solved the mystery, the logical followup question is: why not? By page 130, the reader has the theory and the data to discern that something is radically wrong with Dean Clegg's research.
At some point in classroom discussion, students should be given the opportunity to respond to the question: Did Jevons play fairly? That is, did the author follow the rules of mystery writing?
At this juncture, one may turn to the questions that follow, using these for classroom discussion or for testing purposes.
Specific Questions for Discussion or Testing
- What was the central conclusion of Dennis Gossen's research on information in labor markets? [that more unemployment would occur in those occupations where employers offer a wide variety of wages for the same work] Is there a connection between this research on information in labor markets and the solution to the murder mystery? [the student should see the nexus between searching longer and harder for a job and searching longer and harder for an expensive item in the family budget in that the solution to the mystery is based on this not-so-obvious consequence of search theory]
- Both Valerie Danzig and Oliver Wu objected to the assumption concerning human nature Dennis Gossen displayed in his research. What were their objections to Gossen's assumption?
In Chapter 11, Henry Spearman defended Gossen's approach in an attempt to show that Danzig and Wu were misguided in their criticisms. What was Spearman's argument?
- In chapter 3, Henry Spearman indicated that as his income rose he was less able to afford interruptions and diversions from his work. What concept in economics explains this?
- How did Henry Spearman use economics to account for his father's polite behavior to the customers in his shop and his father's irritable behavior to his family?
How is this principle of human behavior related, if at all, to the behavior of landlords in rent-controlled apartments? Are there other applications of this principle in a student's experience? [one could inquire at this point about the behavior of college and university administrators towards students regarding the parking of automobiles, the allocation of dormitory space, or the distribution of tickets for popular concerts or athletic events]
- In chapter 4, Oliver Wu used cost-benefit analysis to determine whether he should steal a book from the Harvard University library. He also applied this type of analysis to other questions of illegal behavior. Describe cost-benefit reasoning as it applies to theft.
Can the entire criminal code be constructed simply as a price list for various criminal acts? Is the deterrence of criminal behavior merely a matter of altering the expected penalty? [either the probability of detection and conviction, the penalty itself, or both]
- In chapter 5, Henry Spearman realized that his daughter, Patty, confused "demand" with "quantity demanded." What is the distinction?
- In chapter 6, Professor Spearman explained that the pricing system in Filene's bargain basement is related to what Alfred Marshall years earlier called "consumer surplus." How are the two related? What are some examples of goods that yield the enjoyment of substantial consumer surplus?
Parenthetically, what connection is there between Filene's basement and a Dutch auction?
- In chapter 7, the economist hero explained why he would be willing to shop longer for an automobile than for a paring knife. Why does an understanding of this argument ultimately provide the key to the solution of the mystery?
- In chapter 7, Henry Spearman explained the price of rare postage stamps to Christolph Burckhardt. His explanation rejects Karl Marx's labor theory of value. [in that subjective evaluations determine price rather than labor time expended] What are other applications of this principle where the value or price of a product seem unrelated to its labor input? Are there examples of goods or services where the labor theory of value might apply to explain market price?
- In chapter 8, Morrison Bell was critical of Dennis Gossen's argument that business firms should be permitted to bid for a license to pollute. What was Bell's objection to Gossen's argument? From an economic perspective, what was the flaw in Bell's position?
- In chapter 8, Foster Barrett was portrayed as believing income should be distributed according to the refinement of tastes in society in contrast to a market system in which those with elegant tastes often receive the lowest salaries. Do you agree with Barrett's position? [this is an excellent juncture to discuss the difference between equity and efficiency]
- In chapter 8, Sophie Ustinov expressed the opinion there are too many brands of products that are chemically identical. Examples were liquid bleach, aspirin, and evaporated milk. Because the prices of the various brands of such products sometime differed, she always purchased the brand with the lowest price. When it came to buying dog food, she judged quality by price. Was Professor Ustinov being rational? Explain.
- In chapter 11, Henry Spearman defended the position that trademarks and brand names provide useful information to consumers. What is the basis for his argument? Is it persuasive? Why or why not?
- In chapter 13, Sophie Ustinov claimed she was irrational for eating so much food while a passenger on the QE2. Spearman argued that she was rational and based his argument on marginal utility theory (not the quality of the cuisine on the vessel). Reconstruct his argument and apply it to explain how rational consumption patterns might differ at two eating establishments: an all-you-can-eat buffet versus a la carte.
Comments on teaching from The Fatal Equilibrium will be received gratefully at:
c/o Professor Kenneth G. Elzinga
PO Box 400182
Department of Economics
University of Virginia
Charlottesville, VA 22904-4182