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Solving the Mystery of Why We Pay What We Do

by Eduardo Porter

Pub Date: Jan. 4th, 2011
ISBN: 978-1-59184-362-7
Publisher: Portfolio

A sweeping examination of the relationships between humans and money.

New York Times editorial board member Porter is fascinated by what individuals pay for tangible commodities. After a chapter devoted to consumer goods, the author covers a wide range of topics, examining what people in the United States and other societies believe a human life is worth, how to value happiness, whether a free lunch really exists and how to rethink capitalist economies when predictable market behaviors become out of kilter. The author finds that husbands pay for brides in some cultures to maximize reproductive success. In other cultures, parents abort female fetuses to avoid the costs of marrying off their daughters. Porter also asks why it has evolved that employers pay workers rather than enslave them, and why many wealthy individuals believe their most valuable commodity is scarce free time. Given the power of pricing to change behaviors, the author is surprised that governments generally avoid price manipulations to control the behaviors of the governed. He marvels at the differences between the U.S. government and various European governments regarding the price of gasoline for motorized vehicles. In the United States, relatively cheap gas prices lead to urban sprawl and dangerous air-pollution levels, while in Europe, higher taxation on consumer purchases of gas has helped control sprawl and pollution. Porter writes that global warming is partly a failure of polluting nations' economies to place a proper price on the endowments of nature. Failing to determine socially conscious prices demonstrates a lack of will, not a lack of science.

A sometimes abstract, sometimes philosophical and sometimes anecdotal mélange of chapters not always easy to follow, but almost always interesting.