Books on Popular Economics
The first thing that comes to many minds hearing the word Economics are complicated policy decisions made by nations affecting the lives of millions of their denizens. While it is true that economics drives many of such decisions, basic economics also plays an important role in our daily lives. Using Lionel Robbins definition from An Essay on the Nature and Significance of Economic Science this field of inquiry is “the science which studies human behavior as a relationship between ends and scarce means which have alternative uses“. This broad definition firmly puts in perspective that whether we like it or not many of our key decisions are in the end economic decisions. However, unlike popular science, books on popular economics (not just popular books on economics) were never the norm of the day. Though one might argue that books like Tipping Point and Wisdom of the Crowds are in fact works on economics, they often masqueraded as some management hocus-pocus or general reading.
Steven Levitt and Stephen Dubner’s Freakonomics however changed that. It was unabashedly a book on economics and deals in a rational manner with issues that normally have no connection with the field: cheating school teachers and sumo wrestlers, the discrimination against certain sections in game shows and against black-sounding names in job interviews, the links between abortion and crime rates and whether crime pays or not. Most of these issues are often drowned in rhetoric on social norms and morality but Levitt and Dubner prefer to make their arguments based on logic and rationality going as far as to define practical ways to measure the effect of what they preach. Their approach is refreshingly different because they neither put these studies on a pedestal, accessible only to a select few, nor did they water down the analysis to an extent that any serious thought into the matter would have found their logic to be tenuous. Rather Levitt’s intellect and Dubner’s skill in prose produced a book with which an interested reader could constructively engage.
The second interesting work in this field is by Tim Harford. While in Freakonomics, it was Levitt who did the economics and Dubner who did the writing, Tim is both rolled into one. However, he unlike Levitt is not an economist but rather a student of economics. His books The Undercover Economist and The Logic of Life are peppered with references to works of economists both past and present. Also Tim shows an willingness to grapple with much greater canvasses though his work then does not remain as impeccable. Harford’s books deal with issues ranging from the differential pricing of coffee and difference between a Walmart and a upmarket retail joint to world trade and development of third world countries. Tim’s books cover much wider ground but its solutions lack the immediacy that Levitt provides.
While the above are great introductions to the field of Economics for a layman, reference must be made to a couple of more books. The Worldly Philosophers: The Lives, Times and Ideas of the Great Economic Thinkers by Robert Heilbroner and New Ideas from Dead Economists by Todd Buchholz are great reads to get a grasp how the current thinking has evolved over the years. Another book similar in its subject matter to Freakonomics or Undercover Economics but a trifle more rigorous in its treatment of subject matter is Micromotives and Macrobehavior by Nobel Laureate Thomas Schelling. This book is an excellent read for it shows how small deviations from the norm by individuals often results in situations that can best described as utterly deviant in the macro level. People who liked reading Tipping Point will find much to appreciate in this.
Economics and rationality has become very often either the stick to beat down arguments branding them as “economically unfeasible” or has become the whipping slave for all with the argument of “there is no rational man”. Between each of these extremes however, there is much that we as imperfectly rational beings and societies, glean from two and half centuries of studies in this field and these books are great attempts at that.
