55 of 60 people found the following review helpful
You're not as stupid as you look,
This review is from: The Logic Of Life: Uncovering the New Economics of Everything (Hardcover)
Just finished "The Logic of Life", the second book by Tim Harford of "Undercover Economist" fame, and recommend it to anyone with an interest in economics and/or how the world works.
The book's essential premise is that you're not as stupid as you look: or, to put it another way, that human behaviour is the product of rational choices, however seemingly irrational, destructive or absurd the outcomes of those choices may be. The book then ranges across subjects as diverse as the causes of the industrial revolution, institutional racism and teen America's fondness for oral sex to prove the case. (Incidentally I tip my hat the poor sap who, one assumes, wagered that Tim couldn't work the phrase "teenage fellatrices" into the first few pages of a book of popular economics - and lost.)
"The Logic of Life" uses the tools (and research) available to the professional economist to make clear a number of seemingly-intractable puzzles: why in a seemingly democratic political system governments consistently favour small interest groups with huge subsidies (it's not worth the trouble for the voters to co-ordinate themselves to save a couple of cents each in taxes, but it's well worth the trouble of agribusiness to coordinate itself to demand millions of dollars in subsidies); whether colonial rule benefited the colonised territories (yes, when it left them with the institutions that are necessary to create wealth already in place); and whether it's a good idea for people who dine regularly together to take it in turns to pick up the bill (contrary to Tim's previous advice in his "Dear Economist" column for the FT, almost certainly - no one diner cares enough about a bill split ten ways to watch out for the restaurant ripping the party off, but if you take it in turns to pick up the tab the guy whose turn it is to pay will put a quick stop to unordered bottles of wine arriving at the table).
Probably my favourite part of the book, however, is the summary of William Nordhaus's work on measuring how improvements in technology from one period to another translate into economic gains. Nordhaus considered, and attempted to measure, the labour required to light a room of a house, using for the purpose first a pile of wood he had chopped, carried and ignited himself; then a Roman oil lamp; and finally a modern lightbulb. He concluded, perhaps not surprisingly, that the Roman oil lamp was not only easier and cheaper to light but produced a sensationally better quality of light, and that of course the modern lightbulb offered the same benefits over the Roman oil lamp again. Over to Tim:
"Nordhaus's experiments suggested that as far as light was concerned, economic growth has been underestimated not by a factor of two or three but ten thousand times over. A modern lightbulb, illuminating a room from 6pm until midnight every night for a year, produces the same amount of light as thirty-four thousand candles from the early nineteenth century. In the early nineteenth century, earning the money to buy thirty-four thousand candles would have taken an average worker all year. When I remind myself to turn off unnecessary lights, I am saving light that would have taken my grandfather's grandfather all his working hours to provide. For me, the saving is too small to notice."
Confirmation, if any more were remotely needed, that this is the best time in the history of the world to be alive. To - quite deliberately - mangle the words of that fool Cecil Rhodes, always remember that you are living in the C21st and have therefore come first in the lottery of life.
"The Logic of Life" is not only an excellent summary of the current state of the art in behavioural economic research and a treasure-trove of fascinating factoids, but a warm and engaging book, a rational man's attempt to share with the reader his obvious love of the world and its rational foundations. Perhaps the truth won't make you free, but understanding how the world works through the lens of "The Logic of Life" will make you appreciate it a whole lot more.
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Showing 1-3 of 3 posts in this discussion
Initial post: 25 Feb 2008 11:29:09 GMT
Last edited by the author on 25 Feb 2008 11:33:17 GMT
Mr. L. A. Merdler says:
I think one should always be wary of books that attempt to explain the world through the lens of economics. Judging from this review it seems this book is incredibly skewed toward the notion that economic growth and progress are inherently a 'good thing' and centres squarely on the lives of well off western (or American) people. I may have 'come first in the lottery of life' drinking my coffee and sitting here typing on my PC, but what about the child labouers who made the cheap T-Shirt I am wearing, or the Chinese villagers who will pick apart the computer monitor I'm looking at that will be thrown away in 2 years, sifting through toxic materials to find something of value? I would say they have bought a losing ticket.
Yes, us lucky 5% of people on the planet who have time to read popular economics titles in our local Starbucks sipping at chai-lattes have done very well with the logics of economics, but for a few of us to win, most of us have to lose. So, while I don't criticise the premise of the book at all, in fact, I agree with it, its the positive slant that this reviewer gives to the outcomes of the 'logic of life' that grates slightly. Economics, and logic, are without compassion, a shortage of which is unfortunately in our nature. We may be logical, but this is in no way a good thing.
In reply to an earlier post on 21 May 2008 15:44:33 BDT
A. I. Mackenzie says:
Tim never argues that markets deliver fairness - they deliver efficiency which can at times be horribly unfair and he says so in both his books (the chapter on rational racism is a case in point in this book) I don't really think he falls into the trap of saying that human motivation can't be complex, or that compassion doesn't exist. He merely points out that on the aggregate (and individually) we respond rationally to incentives.
As top the point about exploiting third world labour, presumably they too are making rational choices - farm labouring is back breaking and poorly paid in these countries, factory work is a step up as grim as that seems. I'm not sure that the Chinese will be poor for more than one generation at this rate.
Posted on 12 Apr 2010 13:09:27 BDT
[Deleted by the author on 12 Apr 2010 13:12:07 BDT]
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