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Discover Your Inner Economist: Use Incentives to Fall in Love, Survive Your Next Meeting, and Motivate Your Den tist Paperback – May 27, 2008
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From The Washington Post
"We are all Keynesians now," President Nixon is said to have declared in 1971.
His words affirmed the influence of John Maynard Keynes, the famed British economist who decades earlier had argued that smart governments could fine-tune a nation's economy and avert major slumps by manipulating taxes and spending.
These days, though, big-think economic theories feel a little passé. Why worry about inflation or unemployment or budget deficits when you can use economics to figure out why hotel mini-bars are so expensive? Or why people pay for gym memberships they rarely use? Or which first name will maximize your newborn's lifetime earnings?
We may have been Keynesians once, but times change. We are all Freakonomists now.
Steven D. Levitt and Stephen J. Dubner's 2005 bestseller, Freakonomics, captivated readers by using economics to demystify the little conundrums of daily life. I'd never wondered what schoolteachers and sumo wrestlers have in common, or why drug dealers live with their moms, but somehow Levitt and Dubner made me care.
It hardly took an economist -- freakish or otherwise -- to recognize a new market. A glut of similar books soon emerged, such as Tim Harford's The Undercover Economist, Robert H. Frank's The Economic Naturalist and, now, Tyler Cowen's Discover Your Inner Economist.
The books have much in common, including food imagery on their covers. Freakonomics shows an apple cut open to reveal an orange inside. (Message? Expect the unexpected!) Discover Your Inner Economist dangles a carrot. (Incentives are everything!) And The Economic Naturalist puts a pie chart next to an actual slice of pie. (Theory becomes practice!)
But open the covers, and the differences are notable. Inner Economist may not be the best organized or most gracefully written, but it could prove the most useful of the lot, especially if you share the author's interests. An economics professor at George Mason University, Cowen has written extensively on art and ethnic dining, and his chapters exploring those topics are particularly engaging.
The key to tapping your Inner Economist, Cowen explains, is the ability to identify people's true incentives, which are usually more than money. Suppose you want your daughter to help out around the house by washing dishes. Should you pay her?
Bad idea, Cowen warns. If you explain that washing dishes is her family responsibility, she may not always obey, but at least she'll feel some obligation. Bring payment into the picture, and her motivation changes. It becomes a market transaction, writes Cowen, and "the parent becomes a boss rather than an object of deserved loyalty." Your daughter will be less likely to reach for the Palmolive and more inclined to find part-time work that earns respect from her friends. "Expect dirtier dishes," Cowen concludes.
If you're visiting an art museum, your Inner Economist has tips to improve your experience. In each room, decide which painting you'd steal. "This forces us to keep thinking critically about the displays," Cowen writes. "If the alarm system was shut down and the guards went away, should I carry home the Cezanne, the Manet, or the Renoir?" If imaginary theft gives you qualms, pretend you're shopping. "We are probably better trained at shopping than looking at pictures," Cowen explains. How would you spend $500,000 at the Met? The smaller your imaginary budget, the better chance you'll avoid famous paintings and find interesting, lesser-known works.
Cowen also offers techniques for fine dining. At upscale restaurants, many people mistakenly order items they could easily cook at home. Instead, Cowen suggests, "order the item you are least likely to think you want." Chances are, you'll be happily surprised.
And if you're seeking great food overseas, Cowen offers ruthless economic logic: "It sounds heartless, but look for a big gap between the rich and the poor." Wealthy people are a strong market for tasty food, Cowen argues, and poor people will cook for low wages. "My meals in Mexico, India, and Brazil are typically delicious and cheap," he says.
Cowen encourages readers to disregard so-called sunk costs -- the money or time we've already spent on something -- and to make decisions based on future prospects. If a waiter doesn't know what entrée to recommend, walk out of the restaurant. If a movie is boring, leave halfway. If the book you're reading isn't "the best possible book I can be reading right now," find another.
That's all very well, I suppose. But what if finding parking near another restaurant could consume half your evening? What if you're at that movie with a date? And what if that book you're reading is, say, Discover Your Inner Economist?
Perhaps the ultimate affirmation of the Freakonomics phenomenon -- beyond the spate of copycat books -- is the backlash it has sparked. In April, the New Republic published an essay decrying the rise of "cute-o-nomics," lamenting that "clever" topics are crowding out important economic research.
If anything, I'd imagine Freakonomics helps the economics profession, attracting new students and making the dismal science a smidgen less dismal. When's the last time you saw someone thumbing through Keynes's General Theory at the beach?
Yet Keynes remains instructive here. Nixon's praise, ironically, came just as traditional Keynesianism began to fall from favor. High inflation and persistent unemployment during the 1970s undermined the notion that governments can ensure economic stability. Alternative economic theories soon prevailed, at least for a while.
Maybe the Freakonomics craze is peaking as well. Sure, it's fun to use economic principles to unravel everyday riddles. But cutting-edge researchers are going further, deploying the tools of psychology and neuroscience to probe economic behavior, using imaging technology to map our brains and understand how we invest, buy and save. Now that's freaky.
Copyright 2007, The Washington Post. All Rights Reserved. --This text refers to an out of print or unavailable edition of this title.
--Steven D. Levitt and Stephen J. Dubner, authors of "Freakonomics"
aFast, furious, and fun, with great examples of how to apply economic thinking to nontraditional subjects.a
aStephen J. Dubner, coauthor of "Freakonomics"
aEngaging [and] useful.a
a"The Washington Post"
aHis creativity is a gift.a
aSteven D. Levitt and Stephen J. Dubner, authors of "Freakonomics"
a[An] economist whoas a wonderfully entertaining writer but also a deeply humane thinkera]willa]show you how thinking better can actually help you live better.a
aJames Surowiecki, author of "The Wisdom of Crowds"
?Fast, furious, and fun, with great examples of how to apply economic thinking to nontraditional subjects.?
?Stephen J. Dubner, coauthor of "Freakonomics"
?Engaging [and] useful.?
?"The Washington Post"
?His creativity is a gift.?
?Steven D. Levitt and Stephen J. Dubner, authors of "Freakonomics"
?[An] economist who's a wonderfully entertaining writer but also a deeply humane thinker?will?show you how thinking better can actually help you live better.?
?James Surowiecki, author of "The Wisdom of Crowds"
Top Customer Reviews
The book is still worth reading. But go in understanding it will not change the way you think and is a compilation of observations more than anything else. Also understand it doesn't measure up to the leader in the collection-of-economic-observations genre: Freakonomics.
1)The Postcard Test - It should be possible to take a good economics argument and write it out on the back of a moderate-sized postcard.
2)The Grandma Test - Most economic arguments ought to be intelligible to your grandmother.
3)The Aha Principle - If the basic concepts are presented well, economics should make sense.
Unfortunately, Cowen violates these less than stunning principles. The book rambles, communicates little if anything about economics, has no integrating thread, and is boring. My guess is that he simply decided to get on the "Freakonomics" bandwagon. If so, it's long past time to move onto another fad.
The book needed an honest copywriter and a strong editor.
It is entertaining, but it rambles. Better, stronger structure, clearer logic and theory and tighter examples would have really helped.
It has some good points swimming in the sea of stream of consciousness writing, but darn it, I bought this book new to get more than that.
As the author advises, you need not finish every book. I'd add to that, you need not buy every book either, interlibrary loan is more than enough to pick up the good points of this book and to let you save your incentives, your dollars, to encourage another writer.
Most Recent Customer Reviews
By the first disc of the audio-book version, I could tell he was an economic rationalist.
By the second disc, I could see that he was a self-styled polymath and felt obliged... Read more
When first picking this book off the shelf and looking at the Title I thought it was going to be a interesting read. IT ISN'T. Read morePublished on September 10, 2013 by J. Carbone
This book showed up in great condition as advertised and I enjoyed reading every page of it! I would definitely recommend it!Published on March 31, 2013 by D-Rad
It is amazing how some 'books' become published.
There is no theme to this unstructured attempt either in relationship to the title, between chapters or within the... Read more
Tyler Cowen, professor of Economics at Georges Mason University, has written a simple and interesting little book that describe how the understanding of how incentives work is... Read morePublished on November 29, 2011 by Danny Cote
Relying on economic principles to determine every aspect of your life is powerful, certainly. Effective, maybe. But it's also more than a little bit psychotic.Published on January 11, 2011 by SJ
I got this book from a local library. Read and liked it very much. When I come to amazon.com to buy one to keep, I found the average review is low. Read morePublished on January 8, 2011 by Yi Dong
I've never written a review here before, but I was moved by just how bad this book was to write one now. Read morePublished on October 17, 2010 by Avid Reader
I appreciate the points Cowen tries to make, but as at least one other reviewer said, he rambles. If the book were two thirds its present length, it would be much better. Read morePublished on February 21, 2010 by l.c.r.