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The Soulful Science: What Economists Really Do and Why It Matters Hardcover – 11 Feb 2007
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One of Choice's Outstanding Academic Titles for 2007
"The book is well written, copiously referenced and generous in its acknowledgement of the relationships between economics and other social sciences. . . . [T]he general reader . . . will find much to think about."--David Throsby, Times Literary Supplement
"Coyle's style is very accessible, and this book is an excellent survey of the frontiers of economics for the general reader. Students of economics at all levels will benefit, as the work's academic credentials are strong, with more than 300 references to leading books and articles. Overall, The Soulful Science can be recommended highly."--Paul Ormerod, Times Higher Education Supplement
"The best thing about [this book] is a deft mapping of the developments in economic thought. Coyle describes brilliantly the intellectual geography of her subject."--Frances Cairncross, Nature
"Most of The Soulful Science is devoted to a grand whirlwind tour of modern economics, with fascinating vignettes of individual economists. It's a trip worth taking, because what economists do has changed considerably in the past two decades, and the textbooks haven't kept up. Coyle, who is both a journalist and a Harvard-trained economist, is ideally suited to the role of tour guide: She understands economists as only a fellow economist can, and she can write, as most economists cannot."--David Colander, American Scientist
"This is an astonishing book: beautifully written. . . . [I]t is also beautifully edited; it is the first book I have read in a long time that is equally at home on either side of the Atlantic--which is not an easy trick to pull off."--Andrew Hilton, Financial World
"Fluently written with the balance of a good novel, the result is a tour de force."--Donald Anderson, Business Economist
"Coyle shows how contemporary economists are bringing theory out of the classroom as they adopt a more pragmatic, humanistic approach to such problems as poverty and pollution."--Edward Nawotka, Bloomberg News
"The simple aim of The Soulful Science is to describe what economists do, how the field has changed in the past 10 years or so, and why you should care. It succeeds admirably."--Financial Times
"Coyle cares about these issues not only as an economist (once the economics editor at this newspaper), nor because she sits on the Competition Commission, applying theory to curb monopolistic tendencies, but also because she feels economists, and their work, are often misunderstood."--Salil Tripathi, The Independent
"Author of Sex, Drugs, and Economics and other popular volumes, economist Coyle offers compelling arguments for why economics--and economists--matter. She skillfully and objectively treats the theories, current controversies, and frontiers of the discipline...For thoughtful, insightful, interesting narrative, Coyle is hard to top."-- A.R. Sanderson, Choice
"Policy-oriented economic developers and researchers have much to gain from Coyle's summaries of a wide variety of contemporary economic research, which she presents with exceptional grace and more humor than is usually expected from a practitioner of the 'dismal science.'"--James Held, Applied Research in Economic Development
"Regardless of how one views current developments in the mainstream, this is a most worthwhile read. Diane Coyle makes her case in a clear, accessible fashion, and lays out the particulars in a well-organized format. Readers, both supportive and critical of these developments, will find themselves better armed to make their respective case."--John F. Henry, Journal of Economic Issues
"The audience for this book includes anyone . . . who is interested in the implications of economics on policy making. The book is useful as an update to what is happening in modern economics. Teachers in the field can borrow ideas to tune their courses to the state-of-the-art research conducted in the discipline. Researchers in humanities and social sciences would find the book intriguing as more and more overlap between economics and sociology, psychology, and anthropology is witnessed. People with general interest in economics will find The Soulful Science a pleasant read as well."--George M. Zinkhan and Plamen P. Peev, PsycCRITIQUES
From the Back Cover
"At long last, economists have received credit where credit is due. Diane Coyle's authoritative, punchy, lucid, and provocative case for the vitality of today's economics and economists is like a breath of fresh air. This science is a long way from dismal and has been broadening its scope and deepening its insights for a long time. Too few people outside the discipline have noticed what has been going on. A great read, Diane Coyle's The Soulful Science will remedy that shortcoming."--Peter L. Bernstein, author of Against the Gods: The Remarkable Story of Risk
"This book will show everybody what modern economics has to offer, and might even make economists rethink the relationship between their research and the big questions in economics. The Soulful Science is very well written, impressive in its grasp of a wide range of topics, and engaging in its enthusiasm."--Paul Seabright, author of The Company of Strangers: A Natural History of Economic Life
"Easy and pleasant reading, this informed and informative book shows convincingly that economics is not the dismal science it is reputed to be. It should be required reading for all who have no training in the field but are nevertheless convinced that they are qualified to speak out on important economic issues. Students who are puzzled by their economics courses will also find the book invaluable."--William J. Baumol, author of The Free-Market Innovation Machine
"Economics has indeed been changing in exciting ways and Diane Coyle's new book will be essential reading for anyone who wants to know what has been going on and what has been achieved so far."--Paul Ormerod, author of The Death of Economics and Why Most Things Fail
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Top customer reviews
Such minor points aside, this book generally doesn't pull any punches when it comes to pointing out the limitations of mainstream economics, and it would be just as useful to a critic wanting to add some economic maturity to their arguments as it is to the student of economics looking towards the future of his or her discipline. For the policy maker without the time to go over original sources themselves, this book gives access to the theoretical and philosophical basis of the new pragmatic 'what-works' 'evidenced-based' policy agenda that has emerged since the financial crisis of 2008 and as such is a good guide to some of the most profound epistemological debates which continue to shape and define the world around us.
Some major themes come back repeatedly, like the neoclassical theories of economics, which many economists seek to complement or to overturn, and the influences of psychology and biology on economics. But they are never given independent, coherent introductions. Instead, these themes are sprinkled over many chapters. The book also presents a fair number of interesting applications of modern economic theory, but none of these examples enjoys a detailed enough treatment. Therefore, I still do not know what economists really do, and I am still not convinced that it is interesting. (That it matters is hardly in doubt.)
The book might be a good introduction to the recent literature on the subject, although I know too little to judge. But I would not recommend it to those who, like me, have no professional interest in economics.
Most helpful customer reviews on Amazon.com
People are generally ignorant of modern science and they know it. They are even more ignorant of the basic principles of economics, but they think they know more than they do. Therefore, they despise and fear economists, who are easily pilloried as other-worldly academics who throw around big equations but couldn't meet a payroll or punch a time clock if their professional future depended on it. Conservatives and liberals alike cherish basic principles of economics that are as stupid and inane as intelligent design and flat-earth-ism. We need a dozen more books like this excellent contribution by Diane Coyle.
Coyle covers the history and theory of economic growth, the sources and potential cures for world poverty, the nature and source of happiness and its relationship with income and wealth, the economics of adverse selection and moral hazard, rent-seeking and the politics of state intervention, evolutionary economics, behavioral economics, and the new, analytical institutional economics. Since she has a Ph.D. in economics from Harvard, Coyle for the most part acts as a participant in dealing with the issues, not simply a journalist reporting the news. Generally, her take on the various issues is insightful, balanced, and engaging. However, I would be remiss if I failed to find something in the book to grumble about, so I will discuss her treatment of behavioral economics, which I consider more of a journalistic than a professional account.
The common take on behavioral economics is that traditional economics assumes people are rational optimizers whereas the experimental evidence is that they are boundedly rational, or even irrational, non-maximizers. This is incorrect and indeed dangerous. I say this is incorrect because the evidence shows that people are not purely self-interested and they are prone to committing decision-making errors based on both weaknesses of human nature and on having incorrect theories of stochastic events. But there is no evidence that people are not fully rational. This is very important, because the economist's "rational actor model" is probably the most important tool in their tool box, and one which other social science disciplines (e.g., sociology and social psychology) ignore and thereby render systematic social theorizing impossible. It is even incorrect to say that people are boundedly rational, because basic information theory tells us that bounds on information processing are ensured by the laws of physics and not due to human frailty. Moreover, confusing incomplete or asymmetric information for bounded rationality is a highly serious error that leads us to study human psychology as opposed to the social conditions that determine the distribution of information among agents.
Of course, behavioral psychologists love to criticize the rational actor model, but in fact, there would be no modern behavioral psychology (a la Tversky and Kahneman) if it were not for the rational actor model, which they use in each and every one of their experiments. Prospect theory, for which Kahneman was awarded the Nobel prize in economics, is totally predicated upon the rational actor model, adding to the standard choice model only the notion that choice is always with respect to a status quo position. Since I have gone into this issue in detail in a recent target article in Behavioral and Brain Sciences ("A Framework for the Integration of the Behavioral Sciences"), I will forgo the pleasure of expanding on the subject here.
I doubt that I will be interested in reading other similar books. Graphs and tables
are scarce in a subject area that requires them.
For a time, the disgruntled students found support among Parisian intellectuals and the French news media. This is a country, after all, where a literary critic specializing in nineteenth century poet Arthur Rimbaud can write a book about L'Horreur économique and get invitations to talk shows where she would comment on the state of the economics discipline. Form matters more than content for the French literati who have never accepted the fact that economics no longer belongs to the humanities. Essayists with a vague veneer of economic culture but a sharp pen and a wide social circle can pass as experts on a wide range of issues they comment upon in the pages of Le Monde or Le Figaro. Likewise, the post-autistic students were smart, they wrote well and, even though their grades in university exams did not improve as a result of their campaign, they tended to carry the day in the public debate on the direction economics should take. Orthodox economists were simply too busy to care. Those who did were overwhelmed by the rhetoric of the protest students, and retreated from the debating arena with bruises and frustration.
That is, until the publication of the Soulful Science by Diane Coyle. The Parisian students have found their match in this British-born, Harvard educated economist who combines academic knowledge with witty humor and a real pedagogical talent. Her goal is to introduce a wide readership to the developments in the economics discipline that occurred since people ceased to care and sound bite commentators replaced learned scholars in the media. Although her role is not to defend neo-classical economics from its critics--economics is a vibrant science and doesn't really need a defense, thank you--she argues that most of the critics attack a caricature of economics, for reason related to their ideological belief or personal agenda. For its critics, neoclassical economics is a multifaceted straw man, a shorthand for student frustration with math assignments, leftwinger anger against market reforms waged in the name of neo-liberalism, and the general public's puzzlement with a discipline that addresses seemingly "soft" issues with methods directly borrowed from the hard sciences.
Economics is sometimes referred to by its critics as an ideology, the only one remaining after communism exited from the world scene. But as communism should be judged not according to its promoters' ideals, but through the experience of countries which tried to implement "really existing socialism", likewise economics needs to be referred not to the image that its critics paint of it, but to what economists actually do when they practice their discipline. As the author writes, the "popular unpopularity of economics" rests on perceptions which are twenty or thirty years out of date and were always a bit of a caricature anyway. In fact, "actually existing economics" as it is practiced in universities and government agencies has experienced, virtually unnoticed by the wider public, a golden age of discovery. It is this tale of intellectual renaissance that Diane Coyle attempts to tell, charting the new terrains where economics is reclaiming its soul.
She begins by asking the big questions. Why do some economies grow and get rich, while other stagnate in abject poverty? Is there something we could do about it? Among the many development projects and policy interventions, what works, what doesn't, and why? As Nobel prize winner Robert Barro once remarked, when you start thinking about these issues, you can't think about anything else. But you should, Coyle may add, because progress in one corner of the discipline may affect the way economists think about the whole system, and the tools they use to answer the big questions. It is therefore important to keep an eye on the broad picture, and to monitor what other economists are up to these days, even when one specializes in one corner of the academic field. This is in a way an impossible task: it is hard enough to keep track of all the new publications in one's own subfield, let alone in the whole discipline. Any survey on the state of economics will inevitably miss some developments that may exert a huge influence on the future of the discipline, and dwell on some research topics that sound exciting on the moment but may prove to be dead ends. Coyle's random walk through economics should therefore be taken not as an extensive survey, but rather as an invitation to the voyage by a sympathetic and humorous guide.
One of the themes throughout the book is the importance of new data sets, allied with cheap computer power and the development of econometric techniques, in the current renaissance in economics. The author draws the spotlight on unsung heroes such as Angus Maddison, who patiently gathered statistical estimates of the levels of material output and growth for the whole world from the year 1000 to the present. As she writes, it is hard to overstate the importance of the painstaking statistical detective work in assembling the figures of past growth performance of many countries. It is the equivalent of the detailed forensic search of the crime scene and the dull door-to-door and telephone enquiries made by the police--this, rather than the brilliant insights of a charismatic detective, is what solves crimes. In particular, Maddison's estimates show the West overtaking China by 1400, and not by 1800 as alleged by other historians like Paul Bairoch and Kenneth Pomeranz. This point of timing matters: those who argue that China remained the world's economic leader until around 1800 see the subsequent Western growth takeoff as the direct result of European exploitation of the resources of the rest of the world and imperialism, including the submission of China. On the other hand, those who think the West overtook China much earlier see nineteenth- and twentieth-century growth in the West as the acceleration of an internal process, driven by technology and social change.
Other, more theory-minded economists, also get their tribute. Joseph Stiglitz, the guru of the antiglobalization crowd, is credited early in his career with finding a very tractable way of introducing monopolistic competition, product differentiation, and fixed costs in models that had hitherto relied on the twin assumptions of perfect competition and constant returns to scale in production. Paul Krugman, now the famous New York Times columnist, made his name applying increasing returns to scale to models of international trade, and subsequently to questions of industrial location in general. Paul Romer pioneered the theory of endogenous growth by introducing knowledge spillovers, whereby individual decisions have an immediate effect on others. In the new growth theory, as in reality, long-run growth is driven primarily by innovation and the accumulation of knowledge. In the mid to late 1980s, economists working on endogenous growth models and those working on new models in industrial organization and trade transformed all three areas of the discipline, in a spectacularly fruitful period of mutual exchange of ideas.
If Diane Coyle extends lavish praise to the statisticians-detectives and to the theoreticians who helped solve the growth puzzle, she is less charitable to the aid community and particularly to its most vocal advocate, Columbia economist Jeffrey Sachs. Having a stake in the aid business, I may have developed what the author labels "an institutional self-interest in keeping the money flowing". But I would be more positive than she is on the aid effectiveness debate, which she nonetheless summarizes beautifully. I was less familiar with her treatment of happiness research and well-being accounting. I found her introduction to the topic much better than Stiglitz's, and much more funny too (see her prescription that, to increase national well-being, more people need to have more sex). I was on even less familiar grounds in her covering of recent research in behavioral economics, and on the field of neuroeconomics which applies insights from brain science to study the cognitive aspects of economic decisions. But this is what this book is all about: not to rehash what readers already know, but to introduce them to new and exciting areas of research.
As mentioned in the beginning, Diane Coyle is harsh on economics critics, who simply haven't done their homework and paint a distorted picture of neoclassical economics without observing what economists actually do. She also scratches in passing the political scientist Karl Polanyi, a revered figure of the thinking Left, who seemed to wish we could all go back to reciprocal barter and the gift economy. She rightly points out that the so-called Washington consensus is a fact- and research-based convergence of minds among professional economists about macroeconomic policies, not a conspiracy on the part of Wall Street financiers in cahoots with the IMF, as the critics have it. But she is also lucid about why economists are so unpopular in so many quarters. Perhaps the greatest vulnerability of economists is also their greatest strength: their inability to compromise. "We economists, she writes, are unwilling to tolerate imprecision, wishful thinking, or flattering illusion in the study of human behavior and society." If some disgruntled French students want to label as autistic this passion for rigor and unwillingness to yield ground to the fads of the day, then so be it.
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