David Orrell

It was probably a mistake to start this book just after finishing Richard Thaler’s Misbehaving as it covers many of the same studies (albeit in abridged forms). It also just wasn’t as enjoyable as Thaler’s book, who is quite funny and (obviously) passionate about his subject.

The Hot Science series by Icon Books covers new/developing/popular areas of science and is a good way to get your head around different areas of science in a compact format, particularly if you’re not familiar with the subject. I’m probably not the target audience of this book because I know a bit about economics and some of its branches in detail having studied it but hey…I like to read more about topics I’m familiar with. If you’re new to the field of behavioural economics, this book would be a good summary. However, it would be worth knowing something about how economics works before you read this.

The book starts strongly by looking at Brexit and other examples of how behavioural economics can and has been used. It goes through some of the major studies and looks at how behavioural economics suggests that rational, economic thinking isn’t really how things work. People can be irrational, selfish and take shortcuts to make decisions because sometimes, it’s all too hard to make one. Examples are given on prospect theory and how behavioural economics has been applied (or not) in recent times in government. The last chapter is a critical look at whether behavioural economics is the breakthrough it seems and whether it makes that much difference. It also introduces briefly quantum economics which uses ideas from quantum physics and mathematics. (The author also has written books on this subject). I enjoyed this chapter the most, despite being a supporter of behavioural economics (I think it can have sound applications in health). It was engaging and had a good pace to it. I found that some of the middle chapters were slow and quite dreary to read. There was no ‘sparkle’ or application of the subject to real life instances – which can be done in non fiction.

I would recommend Misbehaving over this if you are looking to get an understanding of behavioural economics – it’s better paced, interesting and contains a lot of real life examples.

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Economyths is written in equal parts flourish and frustration as the author frequently points out the ignorance of the main heroes of (what he calls) neoclassical economics theory while in turns celebrating their lofty aims, which he understands as ultimately wanting help relieve the world of inequity.

While he disparages orthodox economics as "ideology", the author's understanding of ideology seems weak and often merely rhetorical. In the end, he characterises economists as schizophrenics who, regarding themselves as detached from both the object of their study and even their own selves, have constructed grotesquely out-of-touch self-fulfilling models that only serve the interests of the few beneficiaries of financial markets.

Except for the strangely out-of-place tangent on Georg Cantor's proof of the uncountability of irrational numbers, the two chapters (5 & 6) "The Emotional Economy" and "The Gendered Economy" could stand as worth-while reads on their own. The book should be read for the author's creative insights in just these two parts, I think.

For me, the book felt educational (I am a humble engineer and philosophy student, after all — no applied mathematician), and it was definitely entertaining and engaging. I imagine any reader would be left with the impression that the author was exasperated with mainstream economics, but by the end, it becomes clear that this exasperation arises only because the author wants economics to move away from its misguided roots in deterministic, mechanistic social engineering and instead do a better job of modeling the messy network of human activities that comprise the global markets.… (más)