The Logic of Life: The Rational Economics of an Irrational World [Hardcover]

Tim Harford (Author)

Book Description

Release date: January 15, 2008

Life sometimes seems illogical. Individuals do strange things: take drugs, have unprotected sex, mug each other. Love seems irrational, and so does divorce. On a larger scale, life seems no fairer or easier to fathom: Why do some neighborhoods thrive and others become ghettos? Why is racism so persistent? Why is your idiot boss paid a fortune for sitting behind a mahogany altar? Thorny questions–and you might be surprised to hear the answers coming from an economist.

But Tim Harford, award-winning journalist and author of the bestseller The Undercover Economist, likes to spring surprises. In this deftly reasoned book, Harford argues that life is logical after all. Under the surface of everyday insanity, hidden incentives are at work, and Harford shows these incentives emerging in the most unlikely places.

Using tools ranging from animal experiments to supercomputer simulations, an ambitious new breed of economist is trying to unlock the secrets of society. The Logic of Life is the first book to map out the astonishing insights and frustrating blind spots of this new economics in a way that anyone can enjoy.

The Logic of Life presents an X-ray image of human life, stripping away the surface to show us a picture that is revealing, enthralling, and sometimes disturbing. The stories that emerge are not about data or equations but about people: the athlete who survived a shocking murder attempt, the computer geek who beat the hard-bitten poker pros, the economist who defied Henry Kissinger and faked an invasion of Berlin, the king who tried to buy off a revolution.
Once you’ve read this quotable and addictive book, life will never look the same again.

Editorial Reviews

Amazon.com Review

A Message to Amazon Readers from Author Tim Harford

Give yourself a pat on the back. You're not as stupid as everyone says you are, and now there's a book that proves it.

When I first conceived of The Logic of Life, my aim was to show that a world full of smart people--people like you, that is--doesn’t necessarily look logical on the surface. We eat too much and worry about being fat; drink too much and cringe when we remember; spend too much at Christmas and worry about the bills in New Year. And that’s just the small stuff: what about crime, racial segregation, divorce, big-money politics?

And yet underneath it all there is a hidden logic. It isn’t always pretty, but it’s there if you know how to see it. That is what The Logic of Life is all about.

But when I'd finished the first draft, my editor told me that he didn't think that people were as logical as I'd said. He wanted me to prove my point.

At first, I thought it was my editor thinks people are illogical because he works in the publishing business. Of course life looks illogical if you do that. (In fact, life looks crazy in most offices: see "Why Your Boss is Overpaid," chapter four.) But then I realised he was right. I'd left the most important step out.

So I went back and made sure that I laid out all the amazing evidence. I looked at single women hitting the dating scene in American cities; I looked at juvenile delinquents across the US; I looked at Mexican prostitutes; I looked at traders at a convention in Disney World; I looked at professional poker players in Las Vegas and professional soccer players in Europe. I looked at violent spouses, alcoholics, and school bullies.

In every case I discovered a story of hidden incentives and unexpected logic. And through the process of writing--and living--the book, I discovered that this crazy world of ours makes more sense than you might think.

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From Publishers Weekly

Financial Times and Slate.com columnist Harford (The Undercover Economist) provides an entertaining and provocative look at the logic behind the seemingly irrational. Arguing that rational behavior is more widespread than most people expect, Harford uses economic principles to draw forth the rational elements of gambling, the teenage oral sex craze, crime and other supposedly illogical behaviors to illustrate his larger point. Utilizing John von Neumann and Thomas Schelling's conceptions of game theory, Harford applies their approach to a multitude of arenas, including marriage, the workplace and racism. Contrarily, he also shows that individual rational behavior doesn't always lead to socially desired outcomes. Harford concludes with how to apply this thinking on an even bigger scale, showing how rational behavior shapes cities, politics and the entire history of human civilization. Well-written with highly engaging stories and examples, this book will be of great interest to Freakonomics and Blink fans as well as anyone interested in the psychology of human behavior. (Feb.)
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Product Details

• Hardcover: 272 pages
• Publisher: Random House; 1 edition (January 15, 2008)
• Language: English
• ISBN-10: 1400066425
• ISBN-13: 978-1400066421
• Product Dimensions: 1.1 x 6.4 x 9.1 inches
• Shipping Weight: 1.1 pounds
• Average Customer Review: 3.8 out of 5 stars  See all reviews (56 customer reviews)
• Amazon Best Sellers Rank: #560,722 in Books (See Top 100 in Books)

More About the Author

Tim Harford is the author of the bestseller The Undercover Economist and The Logic of Life and a member of the editorial board of the Financial Times, where he also writes the "Dear Economist" column. He is a regular contributor to Slate, Forbes, and NPR's Marketplace. He was the host of the BBC TV series Trust Me, I'm an Economist and now presents the BBC series More or Less. Harford has been an economist at the World Bank and an economics tutor at Oxford University. He lives in London with his wife and two daughters.

Most Helpful Customer Reviews

26 of 28 people found the following review helpful

5.0 out of 5 stars A valuable reminder that economics is a means not an end January 17, 2008

By Andy Carlisle

Format:Hardcover

A lively and thought-provoking follow-up to Harford's debut book The Undercover Economist, which used textbook economics to throw new light on everyday life. In this second book Harford moves well beyond the textbook to take us on a tour of some cutting edge research and thinking that's emerging from what he calls a "new breed of economists". Among them is Steve Levitt, whose Freakonomics popularized the notion that economists can have interesting things to say about areas you wouldn't normally expect them to be poking their noses into - but Levitt is only one of many academic researchers who are cheerfully roaming over other people's turf from their economics labs, so Harford's book serves as a timely overview of a newly sexy subject.

The result is a startlingly diverse collection of insights and anecdotes which are all held together by one central premise - that you can explain a lot about life by starting from the simple assumption that people are fundamentally rational. This is not an uncontroversial assertion - among the "new breed of economists" are those melding economics with psychology into a fledgeling discipline of behavioral economics, which focuses on our irrational quirks. Harford's view is not to dismiss these human foibles, but to argue persuasively that they shouldn't be overstated, and that in most important situations we behave rationally - that is, subconsciously evaluating costs and benefits and responding to incentives - to a remarkable extent.

Harford's writing is a joy to read, especially when he's impishly puncturing pomposity - my favorite is the "why your boss is overpaid" chapter, which discusses several theories that could rationally explain the obscenely high wages commanded by modern CEOs (hint: none of them are "because they're worth it"). One great lesson made clear by this book is that individually rational decisions can lead to socially horrible outcomes, a conclusion never clearer than in the discomfiting chapter on "rational racism". It's a valuable reminder that economics is a means not an end - rational choice theory doesn't dictate what society should be like, rather it teaches how we can harness rationality by changing incentives to shape the society we want.

39 of 47 people found the following review helpful

5.0 out of 5 stars Learn to go past knee-jerk explanations to a deeper understanding of our world February 14, 2008

By M. Strong

Format:Hardcover|Amazon Verified Purchase

Increasingly, economics is being used to explain the actions people take outside of their financial lives and then turned into books that are readable and, dare I say, interesting for lay people. Harford's latest work is the best of this crop that I've read so far.

What Harford does so well is pick interesting everyday topics, some big and some small, explain the rationale typically used to explain why things are the way they are, and then paint a new picture of what is driving peoples' actions. Harford explains why people will pay more to live in cities and why new tele-commuting technology will make cities more attractive, not less. He digs into the sadly explainable roots of racial discrimination in hiring and why some students are making the rational choice when they conciously decide not to study. The reasons may surprise you, but you will enjoy his explanations and frequently end up nodding in agreement or shaking your head in frustration with the inescapable but lousy conclusions.

The greatest thing about Harford's book is how clearly it demonstrates the value that economics can deliver. Done right, economics is a powerful tool for identifying the root causes of both good and bad trends. If a trend is good (Harford explains historic growth in wealth) you can learn how to promote it further. If a trend is bad (the decline of a city like New Orleans or Detroit) you can figure out how best to deal with it. Economics gives its users a tool for objective, clear thinking that is tough to come by.

Highly recommended for anyone who wants to develop their thought process. You'll come away a smarter voter, wiser consumer of news and thinking more clearly all-around.

32 of 38 people found the following review helpful

5.0 out of 5 stars How small, rational decisions can produce big problems January 25, 2008

By Watt

Format:Hardcover

This book works because it takes a simple concept,that rational choice underlies much of human behavior, and that many of our seemingly intractable problems have been produced by fairly mild and even rational individual decisions. I urge you to begin the book by reading the section on "rational racism," which I found in many ways the most compelling (and disturbing) part of the book. Harford actually begins the book with a discussion of apparently worrying teenage sexuality that turns out to be more encouraging than you might think possible. In doing so he reminds us that many of the things about which we worry,and about which commentators with big audiences shout shrilly, can be explained in a much clearer way by looking carefully at the rational decisions that produce them.

A great book and a fun read.