The Soulful Science: What Economists Really Do and Why It Matters [Paperback]

Diane Coyle (Author)

Book Description

Publication Date: January 3, 2008

To many, Thomas Carlyle's put-down of economics as "the dismal science" is as fitting now as it was 150 years ago. But Diane Coyle argues that economics today is more soulful than dismal, a more practical and human science than ever before. Building on the popularity of books such as Freakonomics that have applied economic thinking to the paradoxes of everyday life, The Soulful Science describes the remarkable creative renaissance in how economics is addressing the most fundamental questions--and how it is starting to help solve problems such as poverty and global warming. A lively and entertaining tour of the most exciting new economic thinking about big-picture problems, The Soulful Science uncovers the hidden humanization of economics over the past two decades.

Coyle shows how better data, increased computing power, and techniques such as game theory have transformed economic theory and practice in recent years, enabling economists to make huge strides in understanding real human behavior. Using insights from psychology, evolution, and complexity, economists are revolutionizing efforts to solve the world's most serious problems by giving policymakers a new and vastly more accurate picture of human society than ever before. They are also building our capacity to understand how what we do today shapes what the world will look like tomorrow. And the consequences of these developments for human life, for governments, and for businesses are only now starting to be realized--in areas such as resource auctions, pollution-credit trading, and monetary policy.

The Soulful Science tells us how economics got its soul back--and how it just might help save the planet's.

Editorial Reviews

Review

The book is well written, copiously referenced and generous in its acknowledgement of the relationships between economics and other social sciences. . . . [T]he general reader . . . will find much to think about.
(David Throsby Times Literary Supplement )

Coyle's style is very accessible, and this book is an excellent survey of the frontiers of economics for the general reader. Students of economics at all levels will benefit, as the work's academic credentials are strong, with more than 300 references to leading books and articles. Overall, The Soulful Science can be recommended highly.
(Paul Ormerod Times Higher Education Supplement )

The best thing about [this book] is a deft mapping of the developments in economic thought. Coyle describes brilliantly the intellectual geography of her subject.
(Frances Cairncross Nature )

Most of The Soulful Science is devoted to a grand whirlwind tour of modern economics, with fascinating vignettes of individual economists. It's a trip worth taking, because what economists do has changed considerably in the past two decades, and the textbooks haven't kept up. Coyle, who is both a journalist and a Harvard-trained economist, is ideally suited to the role of tour guide: She understands economists as only a fellow economist can, and she can write, as most economists cannot.
(David Colander American Scientist )

This is an astonishing book: beautifully written. . . . [I]t is also beautifully edited; it is the first book I have read in a long time that is equally at home on either side of the Atlantic--which is not an easy trick to pull off.
(Andrew Hilton Financial World )

Fluently written with the balance of a good novel, the result is a tour de force.
(Donald Anderson Business Economist )

Coyle shows how contemporary economists are bringing theory out of the classroom as they adopt a more pragmatic, humanistic approach to such problems as poverty and pollution.
(Edward Nawotka Bloomberg News )

The simple aim of The Soulful Science is to describe what economists do, how the field has changed in the past 10 years or so, and why you should care. It succeeds admirably.
(Financial Times )

Coyle cares about these issues not only as an economist (once the economics editor at this newspaper), nor because she sits on the Competition Commission, applying theory to curb monopolistic tendencies, but also because she feels economists, and their work, are often misunderstood.
(Salil Tripathi The Independent )

Author of Sex, Drugs, and Economics and other popular volumes, economist Coyle offers compelling arguments for why economics--and economists--matter. She skillfully and objectively treats the theories, current controversies, and frontiers of the discipline...For thoughtful, insightful, interesting narrative, Coyle is hard to top.
(A.R. Sanderson Choice )

Policy-oriented economic developers and researchers have much to gain from Coyle's summaries of a wide variety of contemporary economic research, which she presents with exceptional grace and more humor than is usually expected from a practitioner of the 'dismal science.'
(James Held Applied Research in Economic Development )

Regardless of how one views current developments in the mainstream, this is a most worthwhile read. Diane Coyle makes her case in a clear, accessible fashion, and lays out the particulars in a well-organized format. Readers, both supportive and critical of these developments, will find themselves better armed to make their respective case.
(John F. Henry Journal of Economic Issues )

The audience for this book includes anyone . . . who is interested in the implications of economics on policy making. The book is useful as an update to what is happening in modern economics. Teachers in the field can borrow ideas to tune their courses to the state-of-the-art research conducted in the discipline. Researchers in humanities and social sciences would find the book intriguing as more and more overlap between economics and sociology, psychology, and anthropology is witnessed. People with general interest in economics will find The Soulful Science a pleasant read as well.
(George M. Zinkhan and Plamen P. Peev PsycCRITIQUES )

Review

At long last, economists have received credit where credit is due. Diane Coyle's authoritative, punchy, lucid, and provocative case for the vitality of today's economics and economists is like a breath of fresh air. This science is a long way from dismal and has been broadening its scope and deepening its insights for a long time. Too few people outside the discipline have noticed what has been going on. A great read, Diane Coyle's The Soulful Science will remedy that shortcoming.
(Peter L. Bernstein, author of "Against the Gods: The Remarkable Story of Risk" )

See all Editorial Reviews

Product Details

• Paperback: 279 pages
• Publisher: Princeton University Press (January 3, 2008)
• Language: English
• ISBN-10: 0691136238
• ISBN-13: 978-0691136233
• Product Dimensions: 8.9 x 5.8 x 0.9 inches
• Shipping Weight: 12 ounces (View shipping rates and policies)
• Average Customer Review: 3.8 out of 5 stars  See all reviews (11 customer reviews)
• Amazon Best Sellers Rank: #1,733,199 in Books (See Top 100 in Books)

Customer Reviews

Most Helpful Customer Reviews

23 of 24 people found the following review helpful:

4.0 out of 5 stars An enthusiastic overview of economics' sexiest fields, May 20, 2007

By 

JJ vd Weele "veenspuuter" (Firenze, Italy) - See all my reviews
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This review is from: The Soulful Science: What Economists Really Do and Why It Matters (Hardcover)

It is always pleasant when somebody says nice things about your profession. Especially when you are, like me, a graduate student of economics, and you are used to criticism and misunderstanding from non-economists.
In fact the book explicitly aims to counter the standard criticisms of modern economics (autistic, removed from the real world, obsessed with macho mathematics, centered around irrealistic concepts as rationality and equilibrium etc.) by showing, as the subtitle announces, "what economists really do and why it matters".
Although admitting and defending the fact that rational economic man still forms the core and benchmark of economic analysis, this means that Coyle spends a lot of time on relatively new and sexy subjects in economics. Behavioral economics, evolutionary economics, happiness economics, economics of social capital and social norms, and the economics of asymmetric information all have their own chapters. If you like the questions of social science, it all makes fascinating reading. Coyle has clearly read herself to the frontier of many research fields and does a very good job at making them come alive. Even while being an economists myself, I found plenty of new insights. Although she does not write quite as well as for example her natural science counterpart Bill Bryson, she is clearly passionate about the subject and manages to convey this very well.
In the end, the subtitle a bit misleading, since the reader will not find chapters on things that economists clearly also "really do" such as industrial organization, macroeconomics, finance, international economics or monetary economics. The only older and more established field that is extensively covered is growth theory cum development economics, with the aim of tackling big questions about poverty and global income inequalities.
But given the aim of the book we can forgive her for that, as we can forgive her for the sometimes over-ubiquitous-ness of superlatives such as "incredibly insightful" and "extremely fascinating" with which insights are presented. However, it is also this enthusiasm plus the displayed knowledge of discipline that make this an interesting and entertaining book for both economists and non-economists, and a must read for everyone who criticizes economics without knowing what's been going on in the last 20 years.

32 of 37 people found the following review helpful:

4.0 out of 5 stars We need more solid books like this, August 1, 2007

By 

Herbert Gintis (Northampton, MA USA) - See all my reviews

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This review is from: The Soulful Science: What Economists Really Do and Why It Matters (Hardcover)

Want to find out about quantum mechanics without sweating out all the partial differential equations? There are a dozen excellent books. Want to find out about what's happening in economics without slaving over arcane journal articles? You are out of luck. Once in a while an interesting economics book will come along, but invariably by someone proselytizing for his own particular take on the policy issues of the day, or eager to teach you the bizarre behavior of the neoclassical rational actor. I have longed for a solid description of what's been happening in the field recently by a competent economist without a policy bone to pick. At last I would have something to offer my friends and family so they could actually answer the oft-repeated question "What do economists actually have to say about the issues of the day when they're not simply expressing their personal political views, or those of their employers?" Coyle's book the rare example of such a book.

People are generally ignorant of modern science and they know it. They are even more ignorant of the basic principles of economics, but they think they know more than they do. Therefore, they despise and fear economists, who are easily pilloried as other-worldly academics who throw around big equations but couldn't meet a payroll or punch a time clock if their professional future depended on it. Conservatives and liberals alike cherish basic principles of economics that are as stupid and inane as intelligent design and flat-earth-ism. We need a dozen more books like this excellent contribution by Diane Coyle.

Coyle covers the history and theory of economic growth, the sources and potential cures for world poverty, the nature and source of happiness and its relationship with income and wealth, the economics of adverse selection and moral hazard, rent-seeking and the politics of state intervention, evolutionary economics, behavioral economics, and the new, analytical institutional economics. Since she has a Ph.D. in economics from Harvard, Coyle for the most part acts as a participant in dealing with the issues, not simply a journalist reporting the news. Generally, her take on the various issues is insightful, balanced, and engaging. However, I would be remiss if I failed to find something in the book to grumble about, so I will discuss her treatment of behavioral economics, which I consider more of a journalistic than a professional account.

The common take on behavioral economics is that traditional economics assumes people are rational optimizers whereas the experimental evidence is that they are boundedly rational, or even irrational, non-maximizers. This is incorrect and indeed dangerous. I say this is incorrect because the evidence shows that people are not purely self-interested and they are prone to committing decision-making errors based on both weaknesses of human nature and on having incorrect theories of stochastic events. But there is no evidence that people are not fully rational. This is very important, because the economist's "rational actor model" is probably the most important tool in their tool box, and one which other social science disciplines (e.g., sociology and social psychology) ignore and thereby render systematic social theorizing impossible. It is even incorrect to say that people are boundedly rational, because basic information theory tells us that bounds on information processing are ensured by the laws of physics and not due to human frailty. Moreover, confusing incomplete or asymmetric information for bounded rationality is a highly serious error that leads us to study human psychology as opposed to the social conditions that determine the distribution of information among agents.

Of course, behavioral psychologists love to criticize the rational actor model, but in fact, there would be no modern behavioral psychology (a la Tversky and Kahneman) if it were not for the rational actor model, which they use in each and every one of their experiments. Prospect theory, for which Kahneman was awarded the Nobel prize in economics, is totally predicated upon the rational actor model, adding to the standard choice model only the notion that choice is always with respect to a status quo position. Since I have gone into this issue in detail in a recent target article in Behavioral and Brain Sciences ("A Framework for the Integration of the Behavioral Sciences"), I will forgo the pleasure of expanding on the subject here.

19 of 21 people found the following review helpful:

3.0 out of 5 stars Good Overview of recent economic thought, July 7, 2007

By 

John Wenzler (San Francisco) - See all my reviews
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This review is from: The Soulful Science: What Economists Really Do and Why It Matters (Hardcover)

Coyle's thesis is that general equilibrium/neoclassical economics peaked in economics departments around 1985. At that point, economists realized that they had reached the end of the line with neoclassical theory and began to develop more interesting and useful approaches to their field. Thus, thinkers who criticize economic theory as unrealistic really are criticizing a "caricature" of economics that economists themselves already have abandoned.

I am not convinced by her argument, but she does provide an excellent overview of much of the recent work in economics. She talks about endogenous growth theory, game theory, "information" economics, behavioral economics, new institutional economics, and efforts to develop more realistic psychological models of economic behavior. Although she has a Ph.D. in economics, her prose is clear and accessible. She usually gets to the heart of the matter and tries to be fair to both sides of an argument.

She does convince me that economists have done some interesting things in the last twenty years. But she doesn't convince me that economists have abandoned neoclassical orthodoxy. She admits that almost all introductory classes in economics still teach neoclassical equilibrium theory and that students are not exposed to the new stuff until they get into advanced graduate studies. This suggests that the new ideas that Coyle discusses haven't given economists themselves much reason to doubt the value of neoclassical theory. They still see it as a solid foundation for learning economics and understanding economic behavior. To most economists, the new ideas that Coyle discusses seem to be additional stories to add to the existing foundation rather than a fundamental challenge to existing theories.

That is the basic question that Coyle fails to address directly. Should the various challenges to neoclassical equilibrium theory radically alter the way that economists think about the economy? I would assert that the neoclassical emphasis on rigor and mathematics lends a false sense of precision and universality to their theories. Really, the economy is a complex phenomenon and those who study it are confronted by the same ambiguities and limitations faced by other human sciences such as sociology and history.