In Butterfly Economics
, Ormerod challenges conventional thinking with the idea that economics is more akin to a biological than a mechanical system. Therefore, by looking at how individuals actually behave instead of analysing predicted behaviour, governments will have a more realistic view of economic theory.
Drawing from sociology, psychology and even entomology (the study of insects), Ormerod argues that the control governments believe they exert over economies is illusory. He throws out the notion that individuals behave according to a clearly defined set of economic rules and argues that people are most likely to be influenced by the behaviour of others. Ormerod backs this up by citing the inability of companies to predict which will be the most popular toy each Christmas or which films will be hits with the consumer. Applying his theory to a wide variety of topics from the financial markets to voting behaviour, he argues effectively for less political intervention.
Ormerod lives up to his reputation as the thinking person's economist in this easy to digest book. His message to governments and businesses alike is to forget short-term intervention and in its place to think strategically by looking at the big picture and long-term results.
About the Author
Paul Ormerod has been head of the Economic Assessment Unit at The Economist and a visiting professor at the Universities of London and Manchester. He lives in London.
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