Tim Harford The Undercover Economist

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Curious books

I’ve written recently about how much I’ve been enjoying Soonish (UK) (US) by Kelly and Zach Weinersmith, a highly amusing exploration of the latest technologies from satellite launch vehicles to 3D printed houses to gene therapy to self-organising robot swarms.

But what else is out there to celebrate the curious?

I recommend Steven Johnson’s Wonderland: How Play Made The Modern World (UK) (US) – a history of technology and economics with a difference. Johnson covers music, fashion, sports and much else with a lovely light touch.

Caspar Henderson’s new book is A New Map Of Wonders (UK) (US– it’s an exploration of art, science, and the way we perceive the world around us. The book itself is a kind of cabinet of wonders, packed with surprises and delightful digressions.

Puzzle fans will have their minds blown – if you’ve not already encountered it – by Raymond Smullyan’s What Is The Name of This Book? (UK) (USBegins with some silly puzzles, moves to variants of the one-always-tells-the-truth, one-always-lies puzzle, and before you know it you’re in the middle of Godel’s incompleteness theorem.

Richard Feynman was often billed as a “curious character”, although I prefer his lectures to his autobiographical work. Try the astonishing QED (UK) (US). I remember trying to explain this one in the pub to my friends, aged 18.

Claude Shannon’s endless desire to play with things and ideas is explored in a solid new biography, A Mind At Play (UK) (USby Soni and Goodman.

Next on my list: Philip Ball’s Curiosity (UK) (USand Walter Isaacson’s Da Vinci (UK) (US), which has been getting good write-ups.

My UK publishers have a competition going on Twitter to win all seven of my books. Or you can purchase any of them here.

 

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4th of December, 2017MarginaliaComments off
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Fun escapist stuff that for some reason I am reading

Possibly the perfect Christmas present for the fun-loving person in your life…

Top of the list is the magnificent Soonish (UK) (US) by Kelly and Zach Weinersmith, a book I was happy to endorse. This is properly funny – as one might expect from the creator of Saturday Morning Breakfast Cereal – but it’s also bang up to date in its exploration of the latest technologies from satellite launch vehicles to 3D printed houses to gene therapy to self-organising robot swarms. I learned so much I didn’t know and had a lot of fun learning it. Read this book.

For people looking for something Sudoku-ish with a bit more bite, try Alex Bellos’s Puzzle Ninja (UK) (US) the very latest puzzle ideas from Japan with Bellos in typically charming form as he meets the puzzle-masters and discusses their new creations.

Helen Arney and Steve Mould, two thirds of the Festival of the Spoken Nerd, offer The Element in The Room (UK) (US) – fun sciencey-stuff for all ages.

And short-and-sweet (and for gaming nerds only) I enjoyed Sly Flourish’s brief but effective The Lazy Dungeon Master (UK) (US). Good stuff on how to prepare less but have better games.

And I might modestly mention my own new book is Fifty Inventions That Shaped The Modern Economy. Grab yourself a copy in the US or in the UK (slightly different title) or through your local bookshop.

PS My UK publishers, Little Brown, are hosting a competition on Twitter to win copies. Details here.

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22nd of November, 2017MarginaliaComments off
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Some podcasts you should hear

Forgive me not linking, because different people will access their podcasts in different ways, but here are a few feeds I suggest you check out:

Radio 4’s Seriously feed contains two documentaries a week, with a marvellous range of techniques. The US storytelling style is wonderful, but there’s more variety in the Seriously stable, and while it sometimes misfires or is ponderous, when it works it’s glorious. Three recent episodes worth checking out: The Edge of Life (about suicide and suicide prevention), Who’s Looking At You (quite brilliant about the effects of universal surveillance) and The Trainspotter’s Guide To Dracula, featuring Miles Jupp.

99% Invisible needs no plug from me but they’re awesome. An ear-catching recent episode discussed the universal basic income not as a piece of economic policy but as a design decision – and 99PI has got me exploring all kind of interesting topics, from barbed wire to Frank Lloyd Wright’s affordable homes.

Jon Ronson’s The Butterfly Effect is clever, curious and surprisingly moving. Series One is about the porn industry, but Ronson talks to all kinds of people and takes the story in a variety of unexpected directions. Bravo.

Just catching on is the After On podcast; free-flowing extended chats with fascinating people such as Ev Williams of Twitter, Blogger and Medium, or Chris Anderson of TED. Well worth a listen.

And finally, Radio 4’s Analysis is back and I particularly enjoyed the episode on the way the Houses of Parliament are falling apart. No, it’s not a metaphor. Except it is obviously partly a metaphor…

And finally finally, Jessica Abel’s book Out On The Wire (UK) (US) spills the beans about how great radio and podcasts are made.

Oh, and finally finally finally, you should of course listen to every episode ever made of Fifty Things That Made The Modern Economyall 52 of them. Details about the book here.

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9th of November, 2017MarginaliaComments off
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The best books about failure

I wrote Adapt: Why Success Always Starts With Failure (UK) (US) several years ago, but I’ve not stopped thinking and talking about the idea. So often we’re told to “learn from our mistakes” or “fail forward”, but the truth is that this advice isn’t easy to take: failure is painful and denial is common.
Here are a few of my favourite books on the topic:

I encountered Little Bets (UK) (US) by Peter Sims just as Adapt was coming out, and loved it. Peter had come to similar conclusions but had a totally different range of examples (from Chris Rock to Frank Gehry, if I recall correctly) and a winning, informal style.

Kathryn Schulz’s Being Wrong (UK) (US) is beautifully written (Schulz later won a Pulitzer prize) and a fascinating discussion of the history and psychology of wrongness.

To go deeper into the psychology of wrongness, try Mistakes Were Made (But Not By Me) (UK) (US) by two academics, Carol Tavris and Eliot Aronson. (Aronson was a research assistant on one of the most famous studies of wrongness, Festinger’s When Prophecy Fails.) The book is highly accessible and full of interesting testaments to the power of denial.

And for a more recent synthesis, try Matthew Syed’s Black Box Thinking (UK) (US), which focuses in particular on the importance of examining and learning from our errors (as with an aeroplane black box).

Happy failing!

My new book is “Fifty Inventions That Shaped The Modern Economy”. Grab yourself a copy in the US or in the UK (slightly different title) or through your local bookshop.

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31st of October, 2017MarginaliaResourcesComments off
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Was Luca Pacioli overrated?

One of my favourite chapters in Fifty Things That Made The Modern Economy (UK) (US) is on double-entry bookkeeping. You can read a briefer adaptation of the chapter on the BBC website. Luca Pacioli, Renaissance mathematician admired by the likes of Leonardo da Vinci, is one of the stars of my story. I have read in various places that Pacioli invented double-entry bookkeeping (I won’t embarrass the authors by naming names) but this isn’t true, as I write:

Pacioli is often called the father of double-entry bookkeeping, but he didn’t invent it.

Why, then, give Pacioli a starring role? Because of his grand treatise:

Summa de Arithmetica, Geometria, Proportioni et Proportionalita was an enormous survey of everything that was known about mathematics – 615 large and densely typeset pages. Amidst this colossal textbook, Pacioli included 27 pages that are regarded by many as the most influential work in the history of capitalism. It was the first description of double-entry bookkeeping to be set out clearly, in detail and with plenty of examples…. His book enjoyed a long print run of 2,000 copies, and was widely translated, copied, and plagiarised across Europe.

Pacioli, then, did not invent double-entry bookkeeping but we can trace its influence to his work. Or can we?

Professor Jacob Soll, author of The Reckoning (UK) (US) writes to suggest that I dig deeper. For one thing, was a 2000-copy print run really so impressive? Accounting caught on in England and Holland, but was Pacioli the source? Prof. Soll writes in an email:

The accounting section was extracted and transcribed, but often changed and not attributed to him.  It is more likely than Jan Ympyn’s book was the actual version that fell into the hands of Englishmen and Germans who went to Holland to literally learn complex capitalism. When industrial capitalism rears its head in Britain around 1706, the British manuals are the ones that are the basis of the revolution.  Did they come from Pacioli?  Possibly, a little?  By that time there were so many Dutch manuals and the great accounting teachers were Dutch and then low Churchmen…  It was only later, as historians tried to date these things, that Pacioli is named the father of the tradition.

Richard Dafforne’s English-language guide to accounting, from 1636, credits the Dutch as his influence.
Moving on from Pacioli to the foundation of management accounting techniques, another loyal reader, Greg Finch, writes:

I hadn’t previously been aware that Josiah Wedgwood used his accounts as a basis for improving his business. However, now I become one of those correspondents who -perhaps irritatingly- disputes one of your points. Doubtless many did follow what they saw Wedgwood doing but I don’t believe management accounting started with him. In Northumberland merchants turned lead miners/processors were using unit cost analysis drawn from their accounts to decide on where to locate smelting mills and to seek cheap sources of ore at least as early as 1680, and had already put in place quantitative ‘KPIs’ they expected managers to report on regularly. I don’t claim this was where it started either -though I am finding Newcastle and the north-east was an interesting hotbed of developing business practice at the time…

My sources included Jane Gleeson-White’s Double Entry (UK) (US), the BBC’s ten-part Brief History of Double-Entry Bookkeeping (which alas is not currently available), and William Goetzmann’s Money Changes Everything (UK) (US). Professor Soll points me towards an authoritative source that I had missed, B. S. Yamey’s Scientific Bookkeeping and the rise of Capitalism.  One of the joys of this project is that I keep on learning.

24th of October, 2017MarginaliaComments off
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Why Thaler’s Nobel is a well-deserved nudge for behavioural economics

Richard Thaler has won the Nobel memorial prize in economics, an award that had been anticipated for some time. Mr Thaler is a behavioural economist, one of the group of economists who applies insights from psychology, or perhaps plain common sense, into the idealised world of economic modelling.

One trivial behavioural insight that Mr Thaler is fond of mentioning concerns a large bowl of cashew nuts he once served to dinner guests over drinks. Observing his guests hoovering up the contents of the bowl, he removed it to the kitchen so as not to spoil everyone’s appetite. The guests could in principle have stopped of their own accord; nevertheless they were pleased to see temptation removed.

Early in his career, he started making a list of “Dumb Stuff People Do” on the blackboard in his office. The cashew nut example was on the list, and it is a classic piece of Thaler thinking: obvious, trivial, fun and yet completely beyond the scope of traditional economics to model. Mr Thaler’s insight is that such trivia might lead to important analytical and policy insights.

Thomas Schelling, Nobel laureate in 2005, was also a master of these deceptively simple observations of human nature. And Daniel Kahneman — a psychologist, mentor for Mr Thaler, and winner of the prize in 2002 — had with Amos Tversky laid the foundations for behavioural economics.

Mr Thaler advanced the field in two important ways. He campaigned for behavioural economics to be taken seriously within the economics profession. He also brought it into the policy environment with his book Nudge (co-authored with Cass Sunstein) and his support for behavioural policy units in the White House and 10 Downing Street.

Within the profession, Mr Thaler found a pulpit in the Journal of Economic Perspectives, an academic journal supplied to all members of the American Economic Association. His Anomalies column was witty and sharply reasoned, highlighting strange features of the economic and financial world that standard economic theory could not explain, and rigorously debunking unconvincing attempts at rationalisation.

His evangelism for behavioural economics has been successful, at least in microeconomics: it is commonplace to see economic models incorporate psychological realism, and Mr Thaler himself was president of the American Economic Association in 2015.

In the policy world, Mr Thaler’s most famous idea was to use behavioural insights in pensions policy — for example, by enrolling people in a pension scheme by default, while giving them the choice to opt out. The stakes here are much higher than with cashew nuts: default enrolment has, according to the UK pensions regulator, increased participation in private-sector pension schemes from 42 per cent to 73 per cent between 2012 and 2016.

Rational economic man does not care — or even notice — whether a pension is opt-in or opt-out. He simply calculates (instantly) whether it pays to participate and chooses accordingly. Mr Thaler’s insight is not only that people are not perfectly rational (that much is obvious, even to the most traditional of economists) but that apparently small departures from rationality can have outsized impacts.

Mr Thaler’s catch-all advice: whether you’re a business or a government, if you want people to do something, make it easy. This year’s choice of Nobel Prize winner is an easy one to like.

Written for and first published in the Financial Times on 9 October 2017.

My new book is “Fifty Inventions That Shaped The Modern Economy”. Grab yourself a copy in the US or in the UK (slightly different title) or through your local bookshop.

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Behavioural economics books to enjoy

Congratulations to Richard Thaler, who has been awarded the Nobel memorial prize in economics “for his contributions to behavioural economics”. Thaler is a worthy winner. In addition to his academic contributions, alongside the likes of Daniel Kahneman and Robert Shiller, he has been the leading evangelist in the profession for behavioural realism in economics.

Thaler’s influence on policymakers has been unparalleled, in part thanks to his book Nudge (UK) (US) with Cass Sunstein. I wrote a quick appreciation of Thaler for the FT (subscription req.) and this much longer piece a couple of years ago asking what lay in store for behavioural economics.

Here are a few of my favourite behavioural economics books:

Daniel Kahneman Thinking Fast and Slow (UK) (US) – now the bible of behavioural economics, full of fascinating experiments and examples.

Michael Lewis The Undoing Project (UK) (US) – a touching biography of Kahneman and Tversky. Skip the first chapter, but the rest is beautiful storytelling and insightful.

Cass Sunstein and Reid Hastie Wiser (UK) (US) – the best book I know about group decision-making and how to overcoming polarisation and groupthink.

For inside stories of behavioural economics try Thaler’s Misbehaving (UK) (US) and David Halpern’s Inside the Nudge Unit (UK) (US).

And for behavioural science to brighten your day, there’s Think Small (UK) (US) by Halpern’s colleagues Owain Service and Rory Gallagher, or How To Have A Good Day (UK) (US) by Caroline Webb.

Enjoy! And if you’d like a reminder that the old rational choice school of thought has some intriguing insights to contribute, may I (ahem) recommend my second book The Logic of Life (UK) (US).

 
My new book is “Fifty Inventions That Shaped The Modern Economy”. Grab yourself a copy in the US or in the UK (slightly different title) or through your local bookshop.

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9th of October, 2017MarginaliaResourcesComments off
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Messy – paperback publication day US

messy-us-cover

The paperback of Messy is out in the US! You can order from Amazon here or find out more about the book and other places to buy here – or if you have a good local bookshop then please support it by picking up the book there.

I had a lot of fun – and no small amount of heartache – writing the book. Tyler Cowen says it is my “best and deepest”; Brian Eno comments, “It’s a very very good book, full of wise counterintuitions and clever insights”; while The Economist comments that it “masterfully weaves together anecdote and academic work.”

To get a flavour of what the book is all about, there’s my TED talk here – or you can check out my Messy inspired reading list, too.

4th of October, 2017MarginaliaComments off
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Books about how to see into the future

Walter Friedman has a fascinating history of economic forecasting in the early 20th century: Fortune Tellers (UK) (US). Well researched, full of interesting detail, and some of these guys (Irving Fisher, Roger Babson) were remarkable characters. For an insight into Fisher’s rival as an economist and investor, John Wasik’s Keynes’s Way To Wealth (UK) (US) is a fun light read.

Paul Goodwin’s Forewarned (UK) (US) is a broad survey of different forecasting approaches. I learned a few interesting things – but also felt Goodwin never quite reached a conclusion.

Philip Tetlock, with Dan Gardner wrote Superforecasting (UK) (US). Tetlock is one of the most interesting social scientists alive, and this research project into who does and does not make good forecasts is fascinating. (You might also look up Tetlock’s brilliant earlier, nerdier Expert Political Judgement and Gardner’s earlier polemic Future Babble, books which led to this collaboration.)

People who are interested in an alternative approach, scenario planning, might check out this offering from two of my former colleagues in Shell’s scenario planning team, Rafael Ramirez and Angela Wilkinson: Strategic Reframing (UK) (US). I haven’t yet read the book but I have no doubt about the qualifications of its authors, and the scenario method is a clever approach to an almost impossible future-gazing task.

Finally, this BBC Radio program about economic forecasting is good fun.

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28th of September, 2017MarginaliaResourcesComments off
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Hunting for the 51st thing – suggestions for further reading or listening

Loyal listeners and readers will know that Fifty Things That Made the Modern Economy  is turning into Fifty-One Things, at least in radio form. We have a short-list of six candidates to be made into a special final episode. Please vote here before noon GMT on Friday 6 October 2017.

But the loyal-of-loyal listeners might want some suggestions for further reading and/or listening.

If you’d like to know more about an early episode in the history of credit cards, try 99% Invisible’s episode The Fresno Drop.

Steven Johnson’s excellent technological history How We Got To Now (US) (UK) focuses on just six key inventions rather than fifty – and glass is one of them.

GPS, meanwhile, gets a book all of its own: Greg Milner’s PinPoint (US) (UK).

To understand the role of irrigation in China, try Philip Ball’s The Water Kingdom (US) (UK) – or if you want a quick hit on irrigation in Bali, there’s this.

For the pencil, there’s only one place to go: Leonard Read’s classic, I, Pencil.

And spreadsheet enthusiasts can enjoy Planet Money’s special episode, imaginatively titled Spreadsheets! 

And if you’d like to pick up a copy of  my own book, it has received some lovely reviews. It’s out now in the UK and in the US (with the title Fifty Inventions That Shaped the Modern Economy).  Do feel free to order copies for all your friends…

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25th of September, 2017MarginaliaComments off
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