Leonard Silk is among the most perspicacious of journalists writing about economics. As economics columnist for The New York Times since the early 1970s, he has had a ringside seat at the unfolding drama. In "Economics and the Real World" he shares his accumulated wisdom.

The book is largely an account of America's political-economic turbulence since Lyndon Johnson sought both Vietnam guns and Great Society butter. Silk takes us through Nixon's devaluation and wage-price controls, the first oil shock, Ford's efforts to "Whip Inflation Now," Carter's fiscal stimulus, the second oil shock, Paul Volcker's success at breaking the back of inflation by throwing the economy into reverse, and Reagan's yawning budget deficits.

Some of this story is familiar. Silk documents the grim trade-offs presidents have to make between inflation and unemployment, and their belated efforts at countering the business cycle. But overlying all is the rhythm of American politics. Silk shows us presidents opting for a lower-unem-ployment/higher-inflation trad-eoff in election years, and arranging for the bottom of the recession to occur before the election year so that the voters experience a vigorous recovery by the time they go to the polls. He also shows how administrations aim for a "misery index" (the combined rates of inflation and unemployment) under 10 on Election Day regardless of what happens afterward, and how they play cat-and-mouse with the Federal Reserve Board -- often prodding, cajoling and threatening the Fed into political expedience.

Along this historic journey, Silk takes the reader on assorted detours -- a conversation with the conservative economist Frederich August von Hayek, ruminations on the relationship between democracy and capitalism, a tour through the Soviet economy, a sampling of Carter oil diplomacy, an exegesis on the cultural differences between New York and Washington. Throughout, Silk is on the lookout for clues about how ideals and organizations influence economic outcomes, how politics shapes markets. These engaging vignettes, many based on personal experience, provide further insights into the political management of the economy, suggesting the practical and ideological limits within which our past five administrations have operated.

There are lessons to be learned from all this, and Silk is not reticent about articulating them. He warns that presidents must make tough economic decisions when there's still time. From Johnson's War to Reagan's Deficit, our leaders have displayed an unremittent tendency to wait until the economic consequences of their actions have grown severe. In addition, he says, America must pay more heed to the international economy in setting fiscal and monetary policies. The globe is fast becoming an integrated banking, production and technology system. Everything we do reverberates through this larger system and then comes back again.

Silk also counsels that we should rely less on tight money as a cure for fiscal profligacy and that we should explore income policies for restraining inflation. He concludes that we shouldn't try to "plan" our economy, but that we should realize we already have an aggressive industrial policy. America's "mixed" economy reflects messy, practical compromises with ideology.

None of this is particularly controversial. It is the very model of conventional wisdom. Indeed, the book suffers from a tendency toward glibness. At one point, for example, Silk reduces the contest between Republicans and Democrats in Congress over Reagan's 1981 economic program to a simple two-person game in which each participant has just two choices. Some of his forays into political philosophy are equally superficial. In discussing the ideas of the late Arthur Okun, Silk concludes soberly that "we must somehow resolve the conflict between the domain of money and the domain of human rights if we are to be a good and growing society." And Silk tends to focus almost exclusively on fiscal and monetary policies -- and the goals of taming inflation and unemployment. He barely mentions improving productivity and international competitiveness, or the ubiquitous policies -- like trade, education, antitrust, government procurement and subsidized research -- that bear upon these more structural goals.

Still, "Economics in the Real World" is a wonderful antidote to the posturing, pontificating and theorizing of economists who refuse to deal with (or are incapable of recognizing) the very human world we live in. Silk puts economics back where it belongs -- into politics and social psychology. It will leak out, to be sure. But in light of this book it will never look quite the same to you again.