Chock-full of numbers and money talk, but oddly entertaining—of a piece with Dan Ariely’s superior Predictably Irrational...
Or, the things people will do for money—and for good reason.
Contrary to pop economists who have examined the stranger moments of human behavior vis-à-vis the benjamins (Freakonomics, etc.), Financial Times and Slate columnist Harford (The Undercover Economist: Exposing Why the Rich Are Rich, Why the Poor Are Poor—And Why You Can Never Buy a Decent Used Car!, 2005) centers on the predictability of much of it. Criminals, for instance, “can be brutal and remorseless, but many of them are far from indifferent to the ‘pains of imprisonment,’ ” because they know that in the calculus of life crime literally doesn’t pay. That calculus comes into play when Mexican prostitutes (Harford picks many examples from the demimonde) determine whether or not the john must use a condom, charging more if not; and when soldiers decide whether to risk their lives by re-enlisting in exchange for the healthcare and other benefits offered by the military. “Even a coward like me will risk his life for money,” writes the author, and risk is omnipresent, in various degrees, whenever money enters the discussion. Harford occasionally gets caught up in the inevitable abstractions of economics, but for the most part his narrative is refreshingly down-to-earth and even useful. The reader learns here, for instance, why he or she should damn the torpedoes and bet with a handful of bad cards: “Your opponent will have to call you a little more often. Because he knows that your bets are sometimes very weak, he can’t afford to fold too easily.” Would that the rest of life operated so predictably. But then, at least in a way, it does, so that, as Harford explains, it becomes apparent why Detroit is a third-rate city and New York a first-rate one, why New Orleans should not be rebuilt and why agribusiness contributes to political campaigns while real-estate agents do not.
Chock-full of numbers and money talk, but oddly entertaining—of a piece with Dan Ariely’s superior Predictably Irrational (2007) and other recent popularizing works in behavioral economics.Pub Date: Feb. 1, 2008
ISBN: 978-1-4000-6642-1
Page Count: 304
Publisher: Random House
Review Posted Online: May 19, 2010
Kirkus Reviews Issue: Dec. 15, 2007
BOOK REVIEW
BOOK REVIEW
BOOK REVIEW
Occasionally wonky but overall a good case for how the dismal science can make the world less—well, dismal.
“Quality of life means more than just consumption”: Two MIT economists urge that a smarter, more politically aware economics be brought to bear on social issues.
It’s no secret, write Banerjee and Duflo (co-authors: Poor Economics: A Radical Rethinking of the Way To Fight Global Poverty, 2011), that “we seem to have fallen on hard times.” Immigration, trade, inequality, and taxation problems present themselves daily, and they seem to be intractable. Economics can be put to use in figuring out these big-issue questions. Data can be adduced, for example, to answer the question of whether immigration tends to suppress wages. The answer: “There is no evidence low-skilled migration to rich countries drives wage and employment down for the natives.” In fact, it opens up opportunities for those natives by freeing them to look for better work. The problem becomes thornier when it comes to the matter of free trade; as the authors observe, “left-behind people live in left-behind places,” which explains why regional poverty descended on Appalachia when so many manufacturing jobs left for China in the age of globalism, leaving behind not just left-behind people but also people ripe for exploitation by nationalist politicians. The authors add, interestingly, that the same thing occurred in parts of Germany, Spain, and Norway that fell victim to the “China shock.” In what they call a “slightly technical aside,” they build a case for addressing trade issues not with trade wars but with consumption taxes: “It makes no sense to ask agricultural workers to lose their jobs just so steelworkers can keep theirs, which is what tariffs accomplish.” Policymakers might want to consider such counsel, especially when it is coupled with the observation that free trade benefits workers in poor countries but punishes workers in rich ones.
Occasionally wonky but overall a good case for how the dismal science can make the world less—well, dismal.Pub Date: Nov. 12, 2019
ISBN: 978-1-61039-950-0
Page Count: 432
Publisher: PublicAffairs
Review Posted Online: Aug. 28, 2019
Kirkus Reviews Issue: Sept. 15, 2019
SEEN & HEARD
A readable, persuasive argument that our ways of doing business will have to change if we are to prosper—or even survive.
A well-constructed critique of an economic system that, by the author’s account, is a driver of the world’s destruction.
Harvard Business School professor Henderson vigorously questions the bromide that “management’s only duty is to maximize shareholder value,” a notion advanced by Milton Friedman and accepted uncritically in business schools ever since. By that logic, writes the author, there is no reason why corporations should not fish out the oceans, raise drug prices, militate against public education (since it costs tax money), and otherwise behave ruinously and anti-socially. Many do, even though an alternative theory of business organization argues that corporations and society should enjoy a symbiotic relationship of mutual benefit, which includes corporate investment in what economists call public goods. Given that the history of humankind is “the story of our increasing ability to cooperate at larger and larger scales,” one would hope that in the face of environmental degradation and other threats, we might adopt the symbiotic model rather than the winner-take-all one. Problems abound, of course, including that of the “free rider,” the corporation that takes the benefits from collaborative agreements but does none of the work. Henderson examines case studies such as a large food company that emphasized environmentally responsible production and in turn built “purpose-led, sustainable living brands” and otherwise led the way in increasing shareholder value by reducing risk while building demand. The author argues that the “short-termism” that dominates corporate thinking needs to be adjusted to a longer view even though the larger problem might be better characterized as “failure of information.” Henderson closes with a set of prescriptions for bringing a more equitable economics to the personal level, one that, among other things, asks us to step outside routine—eat less meat, drive less—and become active in forcing corporations (and politicians) to be better citizens.
A readable, persuasive argument that our ways of doing business will have to change if we are to prosper—or even survive.Pub Date: May 1, 2020
ISBN: 978-1-5417-3015-1
Page Count: 336
Publisher: PublicAffairs
Review Posted Online: Feb. 16, 2020
Kirkus Reviews Issue: March 15, 2020
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