Economics has historically been referred to as “The Dismal Science.” Economists may bristle at the suggestion our subject is “dismal”, but people outside of economics often seem to regard the discipline as dry, abstract, and not entirely useful.
“Interesting” Economics
In recent years, though, an effort has been made by economists to change our collective reputation. Freakonomics – the New York Times best-selling book by Steven Levitt and Stephen Dubner – was a book that applied economics to the study of sumo wrestling, abortion, children’s names, and a host of other “interesting” topics.
Freakonomics was followed by a collection of books that sought to offer more “interesting” economics. This list of books would include (among others)
The Undercover Economist by Tim Harford
The Wages of Wins by David Berri, Martin Schmidt, and Stacey Brook
Knowledge and the Wealth of Nations by David Warsh
Discover Your Inner Economist by Tyler Cowen
The Baseball Economist by JC Bradbury
One will note a few things about this list.
1. There are other books I could have listed, but these are all books I have read (and enjoyed).
2. This list includes The Wages of Wins, so clearly I am not above shameless self-promotion (not surprising if you read the Wages of Wins Journal).
3. Two of these titles are on sports economics, which is obviously the quintessential “interesting” subject in economics.
4. These books were either written by economists trying to be writers, or writers trying to explain economics.
It’s this last point I wish to expand upon. But before I get to that, let me discuss the latest book to be added to our list of “interesting” tomes on economics.
The Logic of Life in One Sentence
One of the neat perks about writing a book – and having a blog – is that publishers send you books to be reviewed. And they do this for free.
A few weeks ago I received in the mail an advanced copy of Tim Harford’s “The Logic of Life.” Harford has certainly studied economics, but he earns his income as a writer. In addition to writing the aforementioned “Undercover Economist” , Harford writes for Slate.com and the Financial Times. In essence, he’s a writer trying to explain economics.
His latest book does just that. “The Logic of Life” can be described as a book that takes the standard assumption of rationality in economics for a ride. In essence, Harford examines a whole collection of diverse stories – most of these outside the standard topics covered in economics – by assuming first that people are making choices rationally.
Defining Rationality
To understand this book, it might be a good idea to understand how “rational” is defined by economists. Perhaps much to the surprise of non-economists – and frankly, many economists – there is more than one definition. Before I get to Harford’s definition, I think it’s a good idea to consider an alternative specification.
To see the alternative, we need to go back in time to the 19th century. In 1898, Thorstein Veblen offered a critique of economics in the Quarterly Journal of Economics (“Why is Economics not an Evolutionary Science?” originally printed in Quarterly Journal of Economics (1898), pp. 373-397.)
In this article is the following observation:
In all the received formulations of economic theory, whether at the hands of English economists or those of the Continent, the human material with which the inquiry is concerned is conceived in hedonistic terms; that is to say, in terms of a passive and substantially inert and immutably given human nature. The psychological and anthropological preconceptions of the economists have been those which were accepted by the psychological and social sciences some generations ago. The hedonistic conception of man is that of a lightning calculator of pleasures and pains who oscillates like a homogeneous globule of desire of happiness under the impulse of stimuli that shift him about the area, but leave him intact. He has neither antecedent nor consequent. He is an isolated definitive human datum, in stable equilibrium except for the buffets of the impinging forces that displace him in one direction or another. Self-imposed in elemental space, he spins symmetrically about his own spiritual axis until the parallelogram of forces bears down upon him, whereupon he follows the line of the resultant. When the force of the impact is spent, he comes to rest, a self-contained globule of desire as before.
This is one of my favorite paragraphs from 19th century economics. And although one might suspect that no one today would think human beings are “lightning calculators of pleasures and pains”, such a suspicion would be incorrect. As Martin Schmidt and I walked around New Orleans a few days ago – at the recent American Economic Association meetings – we saw many economists who were trying their best to be “lightning calculators.” At least it looked like a few people were trying to explicitly utilize their own utility functions for each decision made (should I cross the street here?; should I sit here?; should I say hello to this person?). Yes, some economists treat rationality and utility maximization as not just a model, but a lifestyle.
For such people, the assumption of rationality would be stated as follows: “people choose efficiently the means that advance their goals.” Such a definition – as noted in The Wages of Wins – is specifically called “instrumental rationality.” Instrumental rationality indicates that people not only consider costs and benefits in making decisions, but they evaluate the relevant costs and benefits “correctly.” In sum, people are lightning calculators.
There are plenty of examples in sports – and outside of sports – where people fall short of the “lightning calculator” ideal. It’s important to note, though, that the instrumental rationality definition is not the only way one can state the rationality assumption.
This past quarter at Cal-State Bakersfield I taught the Economics of Religion. This field applies the rational choice framework to the study of religion. In this class we read Acts of Faith, a book by Rodney Stark and Roger Finke. Stark and Finke argue that religious people are rational – where rationality is defined as follows:Within the limits of their information and understanding, restricted by available options, guided by their preferences and tastes, humans attempt to make rational choices.
This definition argues that people have limitations when it comes to processing information. Nevertheless, within these limitations, people consider costs and benefits in making choices.
It’s this conception of rationality that Harford employs in The Logic of Life. Specifically, Harford argues
Rational people respond to incentives: When it becomes more costly to do something, they will tend to do it less; when it becomes easier, cheaper, or more beneficial, they tend to do it more. In weighing up their choices, they will bear in mind the overall constraints upon them: not just the costs and benefits of a specific choice, but their total budget. And they will also consider the future consequences of present choices. As far as my definition goes, that’s pretty much it.
Evaluating the Logic of Life
With this definition in hand, Harford proceeds to tackle a host of issues and questions. The list includes
– the market for marriage
– addiction to drugs and gambling
– why your boss should be overpaid?
– segregation of neighborhoods
– the economics of crime
– one million years of economic development and eventual growth
In sum, this is a wide-ranging book that demonstrates how immensely versatile economics can be.
Of course other books have attempted to do the same. How does The Logic of Life compare to the books I noted at the onset of this discussion?
As I noted, some recent books are like The Wages of Wins. This was a book by economists trying to offer interesting writing. And then there are books like Freakonomics, Knowledge and the Wealth of Nations, and The Undercover Economist. Although Levitt is listed as the lead author on Freakonomics, one suspects that much of the writing was offered – or at least assisted by – Stephen Dubner. What do Dubner, Warsh, and Harford have in common? All three are professional writers.
At this point I am going to say something that might get me in trouble. I have personally read The Wages of Wins about 10 times (in the course of editing the hardcover and paperback). I have also read The Baseball Economist and Discover Your Inner Economist. All of these are excellent books written by economists. As books go, I would definitely consider each a “Kobe Bryant.”
As I have noted in this forum in the past, Kobe is a great player. But he is does not compare to the most productive players in the game. The most productive players – like Michael Jordan, Kevin Garnett, Dwight Howard, Jason Kidd, and LeBron James – offer much more than Kobe.
And just like Kobe is no Jordan (or Garnett or LeBron or Kidd), the books written by economists don’t read quite as well as the books written by the professional writers. The Logic of Life is simply a page turner. I am not a particularly fast reader and I was still finished with this book in a couple of days. This book managed to keep my interest and attention. And when it was over, I was already looking forward to Harford’s next book.
A Question
Although The Logic of Life kept my interest, I was left somewhat befuddled when I was finished.
What exactly made Harford’s writing so effective? Or to put it another way, what does Harford do in his writing that I am not able to do in mine? The professional writers who explain economics seem to do better job than the professional economists.
But I really don’t know why this is the case. We are all telling “interesting” stories. I even think the stories on sports are more “interesting” than Harford’s stories on the economics of crime. But when I read Harford I am more entertained.
Hopefully a reader of this review can shed some light on my question. My hope in writing our next book is that we can imitate Harford, Dubner, and Warsh. But for us to do this, we need to know what they are doing that’s so effective. And although I have read all their writing, I still don’t know why they are so good. Or, to put it another way, why my writing seems to comes up a bit short?
– DJ
Wages of Wins Journal 
givensna
January 13, 2008
First, Kobe is the best player in the game. Whatever your stats say mean nothing, and any short fall in your statistics can easily be made up for with the intangibles Kobe brings to the table. Perhaps whatever you think your writing lacks compared to the professionals can also be made up with intangibles.
/Sarcasm
Polar Bear
January 13, 2008
Your posts have really good ideas but sometimes they are communicated as ham ‘n egg stories (i.e. long winded tellings that seem to start out telling what you had for breakfast before getting to the point).
One time you had a very interesting analysis of a Sports Illustrated article but before you got into the analysis you wrote where you were when you learned of the article, what you were wearing when you read the article, and what you were eating when you did the analysis.
Eliot
January 13, 2008
I’m guessing Kobe’s intangibles include being a total jerk and somehow getting praised non-stop for his defense.
Harold Almonte
January 13, 2008
I think proffesional writters start from the general to explain the particular, and not the opposite.
Pleasure and pain is the mechanism the Nature has to guarantee the life. higher organisms’s grade of fears, and decission making are based on that, but excess of pleasure is as bad for Nature as excess of pain (tropisms, vices and sins born from that), religions try to remember us probably not knowing the why (or probably they knows it), while Laws (supossedly) just try to avoid the monopoly of pleasure, or that nobody gain a lot of pleasure at the expense of others’s pain.
Harold Almonte
January 13, 2008
Then what is the break even between pleasure and pain that guarantee individual and social evolution, materially and spiritually without generating chaos?
Animal
January 13, 2008
“Then what is the break even between pleasure and pain that guarantee individual and social evolution, materially and spiritually without generating chaos?”
Enough with the thinly veiled contentions that rebounds are overweighted in WP!
Pacifist Viking
January 13, 2008
You might be interested in reading Dostoevsky’s “Notes from the Underground.” In it, the man from the underground takes on the idea that people will behave according to their “own best interests.” I think Dostoevsky is specifically arguing against a statement like “rational people respond to incentives.”
A few good lines:
“reason is only reason and satisfies only man’s intellectual faculties, while volition is a manifestation of the whole of life, I mean of the whole of human life including both reason and speculation.”
“In short, anything can be said of world history, anything conceivable even by the most disordered imagination. There is only one thing that you can’t say–that it had anything to do with reason.”
He argues that a person “can consciously and purposely desire for himself what is positively harmful and even stupid,” in order to assert his/her free will.
You’ll probably disagree with the ideas in the book, but I recommend it nonetheless.
MC5
January 13, 2008
The heart has it’s reasons which reason knows nothing of.
– Pascal
Pete23
January 13, 2008
A life of pure reason devoid of emotion is one only an automaton could live.
–Descarte
bjk
January 14, 2008
I don’t have an answer to that, but why not just hire a professional writer? Isn’t that what Levitt did? Benefit from comparative advantage.
Dean Oliver
January 14, 2008
I’m not sure the other books are better written because I have read just Freakonomics (which was very good) and Levitt gets credit. My experience is also mixed. There are a lot of professional writers who just aren’t that interesting.
I can see the potential, however, for their work to be more quickly digestible. Their writing comes from a perspective where they are learning. The writers of economics who aren’t economists are learning as they write. Their process of uncovering the richness of a subject is fresh. In contrast, a professor or expert in a topic can either preach (which ain’t very entertaining) or so quickly see the core of a subject that the satisfying process of unpeeling isn’t done.
It reminds me of a joke about an engineer and a mathematician. The two are stranded on an island with an orange tree. On a low branch is one orange and the engineer quickly climbs it and gets the orange, sharing it with the mathematician. They are still hungry afterwards and the mathematician offers to climb the tree to get the next orange, which is on a higher branch. He climbs up, gets the orange, then puts in on the original lower branch, then climbs down. The engineer looks at him puzzled and asks, “Why did you do that?”
“I reduced the problem to one already solved.”
Far less satisfying for any hungry person, but the same thing to a mathematician who knows it all. Give us the fruit.
Tim
January 14, 2008
I recommend The Elements of Style.
Off hand, I also recommend minimizing passive voice. As a lawyer writing briefs, I find it the single most important rule of style. I also find it surprisingly difficult to follow.
For example, who invented the phrase “The Dismal Science”? Who popularized it? By using passive voice to open your entry, you avoided answering those questions. But you could have said: “Over 150 years ago the Victorian historian Thomas Carlyle called economics ‘the dismal science,’ and although most people have no idea where that term originated, many still consider economics dismal.”
If you don’t want to give up your day job to study writing full time, you might also consider collaborating with a professional writer. Great writing requires years of discipline and practice.
TG Randini
January 14, 2008
On writing (style and content):
Perhaps it’s the whole art vs. science conundrum. We are taught in grammar school all the rules of grammar… where to put the adjectives and adverbs… and all this is supposedly (‘scientific’) ‘fact’. And we lose something in the process of trying to fit our thoughts into all these little boxes… all these little ‘rules’. dberri, you always express yourself clearly and without misunderstanding. But in fitting your thoughts into these syntax ‘rules’… your writing is somewhat lacking in passion.
It’s difficult for this reason: very few people are equally left-and-right brained. You are presenting analytical facts and want to do it with more poetry. That’s not easy. Forget the teachers and all their stupid little rules. Your writing and arguments (and science) are clear, but passion and art can be messy.
Okay… a pointer or two, from someone who has taught writing at the university level:
Show some personality and take a stand by using more descriptive adjectives and adverbs. Use ‘run-on’ sentences like Hemingway (for example). You have a tendency to break each thought into a sentence. Instead, combine two sentences and put ‘and’ in between them.
Our consciousnesses are streaming and continuous… just like the game of basketball. Write like the game of basketball… not like the game of baseball, which is a sport composed of discrete activities and chopped up sentences.
What would I do? Hit ‘em with the facts, and then wax poetic afterwards… knowing that a good equation, however, can BE poetry.
Einstein makes as much music as T.S. Eliot and James Joyce.
TG Randini
January 14, 2008
Dberri… as an example, you wrote above… “I am not a particularly fast reader and I was still finished with this book in a couple of days. This book managed to keep my interest and attention. And when it was over, I was already looking forward to Harford’s next book.”
You could have said it this way:
“I finished his book in a couple days even though I’m not a quick reader, Harford’s work was captivating… “
Or even:
“Harford’s book was a quick read and it rocked!”
TG Randini
January 14, 2008
Last thought:
Be a ‘control freak’ with the stats and formulas… and a ‘rebel’ with the analysis.
Revolutions are fought with passion, not reason.
TG Randini
January 14, 2008
Reason is the sword.
Passion is the arm waving it.
Troy
January 14, 2008
Dave, becoming a good writer takes as much determined, focused effort as becoming a good economist. I am a rank amateur at both. I read a few good suggestions in the comments above, but nothing but continual study and practice will make a difference.
If this is really something you’re interested in, I recommend having one of the writing professors on campus review your work on a consistent (bi-weekly?) basis and offer pointers.
Here’s a more fun, if ultimately less useful, idea. Bill Simmons is, without question, a capable and engaging writer. Occasionally, he challenges “stats geeks” like you to answer basketball questions using your methods. Maybe you could do the same: challenge Simmons to create prescriptive guidelines for creating engaging writing, especially when writing for a blog.
Troy
January 14, 2008
P.S. I am catching up on your columns right now. I wrote the above comment, then moved on to today’s column. And your third paragraph is probably a good case study:
“The inability to have any playoff success has led some to question whether T-Mac really is an NBA star. Sure he score. Sure he gets paid. But if you don’t win, how can you be considered one of the game’s best?”
What’s Good:
1) Two punchy sentences sandwiched between two longer sentences establishes a nice rhythm.
2) Parallel construction on the two short sentences — the repetition of the word “Sure…” to begin each sentence — simultaneously ties the ideas in those sentences together and heightens the contrast between those ideas (T-Mac scores and makes a lot of money) and the idea in the last sentence (without playoff wins, can you be one of the best?).
Needs Work:
The beginning of the first sentence is a mouthful: “The inability to have any playoff success has led some to question…”
1) The word “The” to begin the sentence has no clear antecedent — why not “T-Mac’s” or simply “His” instead?
2) “…inability to have any…” is awkward and more than you need, when you could just say “lack of”.
3) I think writing teachers sometimes overdo it when eliminating the passive voice, but here the phrase “has led some to…” would be strengthened by simply saying “leads some to…”.
4) Finally, who are “some”? “Sports pundits”, “sports analysts”, “chumps like Stephen A. Smith” all are more specific and provide more energy than “some”
So, rewritten it would be, “His lack of playoff success leads chumps like Stephen A. Smith to question whether T-Mac really is an NBA star.”
Last two points. First, you can see why I recommended working with a writing professor. This kind of close rewriting with a capable editor will help a lot, but it takes real time and effort from both of you. Second, given the time constraints you mentioned in an earlier blog, I’d personally rather see you devote whatever time you have to more sports analysis than to working on your writing.
SWaN
January 14, 2008
I believe academics are taught to hit the notes of clarity and reason. However a good writer understands the importance of drama and emotion in story telling.
As others note, plain language helps.
But I read and enjoy this blog for the ideas and analysis more than the prose. Play to your strengths.
Nik
January 14, 2008
I think the differrence lies in the hook, your articles sometimes read like a professor trying to make a lecture interesting. Books like Freakanomics read more like a story from that really interesting guy at the party.
The difference is that early hook, Freakanomics sucks you right in early, and doesn’t get into the real economics until, like someone reading a murder mystery, you’re just about ready to flip to the back to break the suspense.
Jason
January 14, 2008
Clarity and reason do not preclude drama or emotion.
Know your voice. Trust your editors.
TG Randini
January 14, 2008
First time Jason and I agreed on anything!
TG Randini
January 14, 2008
dberri,
On your other writing in this post, you bring up an interesting issue with ‘lightning calculators’. Many writers, and even economists, often confuse ‘short-term’ with ‘long-term’ effects. In business, there are fixed costs and variable costs… but in the long run, all costs are variable. Personally, I don’t believe we are lightning calculators, nor that we always act rationally in the very, very ‘short term’… meaning, “present”. Markets overreact to the upside and downside… husbands say things they don’t mean to their wives (and vice versa)…But, at what point, I mean at what ‘exact’ point, does the short-term become the ‘long-term’? Civilizations live, companies live… but we, as individuals, die.
Isn’t religion based on the premise that long-term effects supercede short-term effects, that an individual’s entire life is a short-term effect?
Are some Dionysisans merely reformed Apollonians? Shouldn’t Sartre have been more fun… after he had ‘discovered’… nothing?
Short-term effects… Adam Smith. Long-term effects… Karl Marx? The jury’s still out on the long-term, isn’t it? For my money… I’d take Groucho over either of them.
I once argued in grad school long ago with an econ professor about an exam answer that he had marked ‘wrong’. He defended his short-term effect. I argued that my long-term effect was correct.
I got an ‘A’. But he got a Nobel.
Brian
January 15, 2008
I was a creative writing major at Wisconsin, so maybe I can come from a little different perspective. One reason people becomew riters, and stay writers professionally, is that they are good at it. They put pen to paper one day and found they have a gift for language. Here is a good thought experiment: Think of a great book, for instance, The Great Gatsby. Now, what if Hemingway wrote that story? What if Stephen King wrote that story? The best one can do is to communicate information in their own style and hope that it is appealing. Surely, one can improve their writing technique. But ultimately, after a base level of technical skill, it is a matter of style…That said, your blog is successful. Your book is successful. Your style, Dave, works. Why change it?
Logic
January 16, 2008
Develop your own style. Write. You are already doing these things with your blog, so you’re already on your way.