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The Logic of Life

by Admin

A little over a year ago, I recommended Tim Harford’s The Undercover Economist. Now, I can also recommend his latest book, The Logic of Life, to anyone who wants to understand how economic “rational” thinking affects all of us every day.



In The Logic of Life, Tim explains how all of us act rationally (that is, with reasoned self-interest) every day, even in some situations where we think we are acting purely emotionally or altruistically. He demonstrates that some actions which appear to be irrational (like government subsidies that benefit only a few special-interest groups but increase tax for many other voters – surely the government would try to please the most voters?) are actually rational. He doesn’t argue that every decision we make is completely rational, just very many of those that we don’t even spend time thinking about.

My favourite part is where he gives several reasons why your boss is overpaid – something we’ve all wondered in the past, and it’s both reassuring and disconcerting to learn that there might be a legitimate reason for it. More disconcerting is the chapter explaining that racism can be rational – and demonstrating that while rationality may be more prevalent than we expect, it is not always to be applauded.

If you’d like to get some insight into a few of life’s little mysteries, click on the link to the right to buy the book. You’ll be helping to support this website and you might just learn something!

Tags: books, boss, economics, government, Income Tax, racism, rational, subsidies

Superfreakonomics

by Admin

I’ve previously mentioned the book Freakonomics as an interesting read which explains how economic thought can be applied to many different (and unusual) areas of the world around us. Well, the same authors (Steven D. Levitt and Stephen J. Dubner) have recently released a follow-up book, Superfreakonomics.

This book covers in quite some depth topics such as finding solutions to global warming, using statistical analysis to find terrorists (particularly relevant at the moment) and why the solutions to big problems are often simple. I personally found that a few of these chapters strayed further from the economics-based descriptions that defined the first book – concentrating more on the details of possible solutions to global warming than the economic forces working on those solutions, for example.

Having said that, the chapter about the economics of prostitution is very much like the previous book’s chapter on drug dealing – because the relevant studies the authors were reporting on were done by the same researcher. It offers some of the detailed analysis that I felt made the first book accessible – explaining why the data gathered (and the methods used to gather the data) can tell you things you wouldn’t otherwise find out.

A very entertaining read which unfortunately is over too quickly – but the epilogue is my favourite part of the whole book, where they explain briefly the impact of explaining to monkeys the concept of money!

Click on the link to the right to buy the book from Amazon, and you’ll be doing your bit to support this site!

Tags: books, economics, Economy, united states

Freakonomics

by Admin

I mentioned in an earlier post that The Undercover Economist was a good book for anyone trying to get an understanding of how economics shapes our world. As a reader pointed out at the time, another good book is Freakonomics, by Steven D. Levitt and Stephen J. Dubner.

Freakonomics: A Rogue Economist Explores the Hidden Side of Everything, to give it its full title, explores not just how the financial side of everyday life is determined, but also how economics applies to other parts of life. There are details of interesting studies into how the name of a child affects his or her employability later in life, how statistical analysis can spot cheating sumo wrestlers, and why most drug dealers still live with their mother.

Where The Undercover Economist explains how economic theory and practice affect us on a day-to-day level, Freakonomics goes into the detail of how a wider application of economics can tell us more about the world, and even explains some of the methodology used to spot trends and draw conclusions. The analysis work is covered in some detail but never gets boring – the writing style is clear and entertaining, leaving you to think about the implications of the studies covered.

Click on the link to the right to buy the book from Amazon, and you’ll be doing your bit to support this site!

Tags: books, economics, Economy

The Undercover Economist

by Admin

If you are looking for a book which does a good job of explaining economics, look no further than The Undercover Economist, by Tim Harford.

Starting with an excellent explanation of the cost of a cup of coffee and how it relates to farming in the 19th Century, Harford goes on to explain how supermarkets get more affluent customers to pay more, and why poor countries stay poor. It’s all written in very clear language, easy to understand but not shying away from the more interesting details of the topic.

If you’d like to learn more about how economics affects not only the finances of the world, but also the cost of your next latte then click on the link to the right to buy this book from Amazon. You’ll be helping to support this website and your eyes will be opened to a whole new world.

You may even learn how to save a few pounds on your weekly shop!

Tags: books, coffee, economics