Everyday Economics

Really?  Do we need yet another popular (best selling) book written by a true-believer economics professor helping us all understand the world we live in?  Yes, of course, that’s what economics, like every other academic discipline, is intended to do: to help us understand, and consequently control, our world, including ourselves.  But I just don’t get why there are so many books written by economists deconstructing everyday issues and events using economics so we can all realize we are either irrational, or worse, just plain stupid.

For me it started with the Armchair Economist: Economics and Everyday Life, by Steven Landsburg published in 1995.  Then came Freakonomics: A Rogue Economist Explores the Hidden Side of Everything, by Steven Levitt and Stephen Dubner, published in 2009, which became such an instant hit that I had to read it just to answer questions from people who were reading it and wanted to check in with me, an ECONOMIST, either to confirm their understanding, or test mine.  Now it’s Tyler Cowen’s new book An Economist Gets Lunch: New Rules for Everyday Foodies.  There’s an interview with the author on NPR’s Morning Edition.

Don’t get me wrong, I think financial literacy is woefully lacking in the US, and we should be doing much more to improve it (despite what Suzie Orman is doing,) and I personally spent just short of 20 years appearing occasionally on the local rock station (94Rock) with DJ TJ Trout trying to help a few listeners better understand the economics of what current news story was upsetting TJ that week.  I was officially called the 94 Rock Economist, so I did achieve celebrity status, but I am much poorer than Landsburg or Levitt or Cowen…  Economists can, and should, devote a significant fraction of their time educating others, and researching a better understanding of the complex financial and economic world in which we live.

But a lot of what these popular economics books deal with is at least trivial, and often pointless.  Cowen advises staying clear of restaurants with lots of beautiful women, because patrons are there to pick up women, not eat, and the owner knows this, so isn’t investing much in the cuisine.  You can expect a pretty ordinary culinary experience for which you’ll pay a stiff beautiful-woman premium!  First, did we really need to be told that?  And is Cowen really smart to have told us what we probably figured out ourselves?  My guess is there’s a whole lot more going on at these bar/restaurants, and with their patrons, than Cowen’s simplistic analysis suggests or explains.

I went to graduate school with a guy who wanted to explain human sexual mating behavior using economic principles.  It wasn’t a new idea then, and it certainly isn’t a good idea, other than to realize economic theory has modeled some pretty fundamental behavioral responses to incentives that are widely applicable, and have helped researchers in many disciplines better understand and explain the behavior they have studied for a very long time.  But this doesn’t mean economists have all the answers.  I hope not, anyway.