A number of years ago, as a new undergraduate studying sociology and economics, one of the first books I bought was the third edition of The Economics of Social Problems. It proved to be immensely valuable and readable as it helped me through my first year studies; well-thumbed and cherished, it still resides on my book shelf to this day. It was therefore with interest that I noted the emergence of the fourth edition in 2008, albeit with a slightly altered authorship and appropriately reworked cover. Whilst time may have flown, it has been a number of years since I initially bought the book and I had concerns that it might have failed to keep up with the rapidly changing fields of economics and social policy. However, to paraphrase Shakespeare, age cannot wither it, nor custom stale its infinite variety. Chapters on ‘new’ issues such as road congestion and climate change sit comfortably with the old favourites of health and education. Debates around distribution of wealth have been slimmed down, but are equally as salient in a more concise format.

Le Grand et al. manage to incorporate these contemporary concerns within the existing chapters, so that, if anything, the book has even greater content. The changes also serve to bring it closer to its stated objectives of being a book about ‘the economics of social problems’ rather than ‘the economics of economic problems’ – though still being aware of their relative mutuality. Yet despite this focus on the social, the authors are still brave enough to introduce what would usually be seen as economic concepts such as the marginal costs/benefits, their relationship to total costs, and how we can recognise a point of efficiency. The strength of this book lies in the manner in which this has been achieved in a very accessible and clear manner. In doing so, I have no hesitation in recommending it to my social policy students to help them to understand the economic base of welfare. Similarly, I would have no hesitation in recommending it to those studying economics that need reminding of the real world outcomes of economic decisions and the way in which not every decision can be quantified.

At times, the book remains a little light on politics; though I accept that the inclusion of an overt political element was probably never the writers' intention. However, in doing so, we are presented with a knowledge base founded, in a couple of places, on the logic of economics and utilitarian efficiency rather than through the illogic of political expediency. As such, questions regarding the political subtext of introducing a quasi-market into education, for example, are in danger of being lost through the, albeit valid, discussions of efficiency and equity. Indeed, it might be argued that many changes in education have been introduced due to a combination of political gain and ideology. Whilst many of these changes may have been packaged and delivered in the language of efficiency gains and educational improvement, we need to avoid being too distracted by these smoke and mirrors. As a slight Achilles heel, and it is slight, this seems a shame because the overriding central issue in the book is the recognition of an economic context through which we can understand the fiscal base of welfare.

So, what is it that this book has to offer? There are many books in the market that examine social policy and provide varying degrees of detail about its fiscal base. Without any trouble, we can find analyses of varying complexities regarding cash transfers, funding priorities, as well as commentaries on the dynamics of ‘tax and spend’ policies. Yet there seems to be a reluctance to go beyond these issues and ask questions regarding those broader economic prerequisites that lie behind these decisions. Le Grand et al. directly tackle debates concerning the achievement of equity and efficiency, as well as the role for the private sector, government intervention and market failure in meeting these goals.

Without this body of economic knowledge, students can be left in a position of analysing fiscal patterns in an overly normative and subjective manner. Health is a prime example, whilst there is awareness of the spiralling costs and demands for health care, there can be a temptation to call for greater taxation and associated spending. However, the book provides an excellent understanding of how we might understand the role of efficiency in health care, allowing students to recognise the cost of greater spending in relation to additionally accrued benefits. Whilst this may sound a little too economic for some who may feel that social problems are just that, social, and cannot be reduced to economic measures and indicators, the book is wonderfully balanced with a sense of equity. From this position, we are able to discuss tax and spend patterns in a more informed and structured manner, aware of the context and also the way in which decisions are bounded.

Overall, the book sets out on a large and ambitious task of understanding the nature of social problems through the lens of economic analysis in a way that will be understood by those with little understanding of economics. From my perspective this has been achieved with considerable aplomb.