Wonky but of immense value to economists and policymakers working on the behavioral side of the field.

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NARRATIVE ECONOMICS

HOW STORIES GO VIRAL AND DRIVE MAJOR ECONOMIC EVENTS

An engaging scholarly study of the stories we tell about economic events—stories that go viral, for better or worse.

Bitcoin is the wave of the future, an anarchist challenge to national currencies meant to disguise the identity of those who hold stores of the “cryptocurrency.” It’s been valued at something around $300 billion. However, writes Nobel Prize–winning Yale economist Shiller (Finance and the Good Society, 2015, etc.), “Bitcoin has no value unless people think it has value, as its proponents readily admit.” It attains value because it’s surrounded by economic narratives, some erratic, some untrustworthy—of the sort that fuel classic bubbles: the mania of speculation that surrounded the South Sea Company, the mania for tulips, the fear-of-missing-out mania for being part of the future rather than the past. By the author’s account, narratives are too often overlooked, so that “we need to incorporate the contagion of narratives into economic theory,” recognizing them to be a driver of economic change, for good or ill. “Contagion” is a word used advisedly, for Shiller draws some of his models from epidemiology; his work also combines with the growing acknowledgment that people are often not the rational actors of classic economic theory. Accounting for narrative epidemics does not necessarily mean trying to counter them, though economic forecasts—the currently building sentiment that a major recession is about to hit, for example—are best used not to frighten but to warn, so that self-fulfilling-prophecy disasters do not in fact happen. Shiller locates one pioneering forecaster in the economist John Maynard Keynes, who warned—unsuccessfully—that placing heavy penalties on a defeated Germany after World War I would yield an even bloodier disaster powered by the thirst for vengeance. That narrative proved correct even if Ronald Reagan’s anecdotal embrace of supply-side economics proved a sham even as his stories “touched off an intense public mandate for tax cutting."

Wonky but of immense value to economists and policymakers working on the behavioral side of the field.

Pub Date: Oct. 1, 2019

ISBN: 978-0-691-18229-2

Page Count: 384

Publisher: Princeton Univ.

Review Posted Online: Aug. 4, 2019

Kirkus Reviews Issue: Sept. 1, 2019

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If the authors are serious, this is a silly, distasteful book. If they are not, it’s a brilliant satire.

THE 48 LAWS OF POWER

The authors have created a sort of anti-Book of Virtues in this encyclopedic compendium of the ways and means of power.

Everyone wants power and everyone is in a constant duplicitous game to gain more power at the expense of others, according to Greene, a screenwriter and former editor at Esquire (Elffers, a book packager, designed the volume, with its attractive marginalia). We live today as courtiers once did in royal courts: we must appear civil while attempting to crush all those around us. This power game can be played well or poorly, and in these 48 laws culled from the history and wisdom of the world’s greatest power players are the rules that must be followed to win. These laws boil down to being as ruthless, selfish, manipulative, and deceitful as possible. Each law, however, gets its own chapter: “Conceal Your Intentions,” “Always Say Less Than Necessary,” “Pose as a Friend, Work as a Spy,” and so on. Each chapter is conveniently broken down into sections on what happened to those who transgressed or observed the particular law, the key elements in this law, and ways to defensively reverse this law when it’s used against you. Quotations in the margins amplify the lesson being taught. While compelling in the way an auto accident might be, the book is simply nonsense. Rules often contradict each other. We are told, for instance, to “be conspicuous at all cost,” then told to “behave like others.” More seriously, Greene never really defines “power,” and he merely asserts, rather than offers evidence for, the Hobbesian world of all against all in which he insists we live. The world may be like this at times, but often it isn’t. To ask why this is so would be a far more useful project.

If the authors are serious, this is a silly, distasteful book. If they are not, it’s a brilliant satire.

Pub Date: Sept. 1, 1998

ISBN: 0-670-88146-5

Page Count: 430

Publisher: Viking

Review Posted Online: May 20, 2010

Kirkus Reviews Issue: July 15, 1998

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Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our...

THINKING, FAST AND SLOW

A psychologist and Nobel Prize winner summarizes and synthesizes the recent decades of research on intuition and systematic thinking.

The author of several scholarly texts, Kahneman (Emeritus Psychology and Public Affairs/Princeton Univ.) now offers general readers not just the findings of psychological research but also a better understanding of how research questions arise and how scholars systematically frame and answer them. He begins with the distinction between System 1 and System 2 mental operations, the former referring to quick, automatic thought, the latter to more effortful, overt thinking. We rely heavily, writes, on System 1, resorting to the higher-energy System 2 only when we need or want to. Kahneman continually refers to System 2 as “lazy”: We don’t want to think rigorously about something. The author then explores the nuances of our two-system minds, showing how they perform in various situations. Psychological experiments have repeatedly revealed that our intuitions are generally wrong, that our assessments are based on biases and that our System 1 hates doubt and despises ambiguity. Kahneman largely avoids jargon; when he does use some (“heuristics,” for example), he argues that such terms really ought to join our everyday vocabulary. He reviews many fundamental concepts in psychology and statistics (regression to the mean, the narrative fallacy, the optimistic bias), showing how they relate to his overall concerns about how we think and why we make the decisions that we do. Some of the later chapters (dealing with risk-taking and statistics and probabilities) are denser than others (some readers may resent such demands on System 2!), but the passages that deal with the economic and political implications of the research are gripping.

Striking research showing the immense complexity of ordinary thought and revealing the identities of the gatekeepers in our minds.

Pub Date: Nov. 1, 2011

ISBN: 978-0-374-27563-1

Page Count: 512

Publisher: Farrar, Straus and Giroux

Review Posted Online: Sept. 4, 2011

Kirkus Reviews Issue: Sept. 15, 2011

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