As someone who majored in economics, I have to carry around joke fodder to make light of my often maligned major. Two economist shot at a doe in the woods; one missed 15 feet to the right; the other to the left; they both shouted "We got him!" Economists successfully predicted 7 out of the last 2 recessions. It's jokes like these that keep people from initially thinking A)I am a stock market whiz (where people get this notion from economics I have no idea) or B)I will support everything that comes out of economics and from economists. Both of those things are untrue. I encounter downcast faces every time zealous opponents of economics find me only willing to defend about 2% of the field. Economics is the study of how rational (but not always) individuals make decisions regarding scarce resources. It deals primarily with incentives, which are incredibly strong. Freakonomics showed us many examples of how incentives shaped decisions and policies shaped outcomes, often in unexpected and unintended ways. SuperFreakonomics gives more of these examples. A small sampling: Drunk walking is more dangerous for the drunk than drunk driving (this WAS on a per-mile basis, which is obviously flawed). Also, the benefits of prostitution outweigh the negatives by such a wide margin that causes people to voluntarily enter the profession. The wage gender gap can be mostly explained by profession choices, as well as the fact that males work more than females and take fewer career breaks. Altruism rarely exists except in the impure altruism and warm-glow altruim forms. And much more. The value of Superfreakonomics is in a way a microcosm of how I think economics should be viewed by the general public. Take any situation or outcome and go back, back, back looking for conditions and incentives that contributed to the outcome. Kids in India born in May 2010 with birth defects aren't unlucky; they're a result of Ramadan fasting. A disproportionate number of hockey players are born in the end of year, not due to some random chance but rather to year/grade cutoffs. The list goes on and on. In our current world. Employers are not dropping healthcare coverage because they're heartless; they simply can't afford it because of the recent legislation meant to INCREASE health coverage. Government workers aren't lazy or apathetic by nature; the job simply affords them the ability to be apathetic and still stay employed. People still think that minimum wage laws increase the wages of the lower-classes. To me, there seems to be an inverse relationship between the complexity of economics and its usefulness. This review has ceased to be a review and has become my own personal treatise on economics. Still, read Freakonomics and Superfreakonomics. It won't take you very long and you'll be exposed to way of thinking likely foreign but potentially beneficial to you in the future.
Friday, August 26, 2011
Book Review: Superfreakonomics
As someone who majored in economics, I have to carry around joke fodder to make light of my often maligned major. Two economist shot at a doe in the woods; one missed 15 feet to the right; the other to the left; they both shouted "We got him!" Economists successfully predicted 7 out of the last 2 recessions. It's jokes like these that keep people from initially thinking A)I am a stock market whiz (where people get this notion from economics I have no idea) or B)I will support everything that comes out of economics and from economists. Both of those things are untrue. I encounter downcast faces every time zealous opponents of economics find me only willing to defend about 2% of the field. Economics is the study of how rational (but not always) individuals make decisions regarding scarce resources. It deals primarily with incentives, which are incredibly strong. Freakonomics showed us many examples of how incentives shaped decisions and policies shaped outcomes, often in unexpected and unintended ways. SuperFreakonomics gives more of these examples. A small sampling: Drunk walking is more dangerous for the drunk than drunk driving (this WAS on a per-mile basis, which is obviously flawed). Also, the benefits of prostitution outweigh the negatives by such a wide margin that causes people to voluntarily enter the profession. The wage gender gap can be mostly explained by profession choices, as well as the fact that males work more than females and take fewer career breaks. Altruism rarely exists except in the impure altruism and warm-glow altruim forms. And much more. The value of Superfreakonomics is in a way a microcosm of how I think economics should be viewed by the general public. Take any situation or outcome and go back, back, back looking for conditions and incentives that contributed to the outcome. Kids in India born in May 2010 with birth defects aren't unlucky; they're a result of Ramadan fasting. A disproportionate number of hockey players are born in the end of year, not due to some random chance but rather to year/grade cutoffs. The list goes on and on. In our current world. Employers are not dropping healthcare coverage because they're heartless; they simply can't afford it because of the recent legislation meant to INCREASE health coverage. Government workers aren't lazy or apathetic by nature; the job simply affords them the ability to be apathetic and still stay employed. People still think that minimum wage laws increase the wages of the lower-classes. To me, there seems to be an inverse relationship between the complexity of economics and its usefulness. This review has ceased to be a review and has become my own personal treatise on economics. Still, read Freakonomics and Superfreakonomics. It won't take you very long and you'll be exposed to way of thinking likely foreign but potentially beneficial to you in the future.
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