Skip to main content

Economyths – David Orrell *****

When I saw this book I was rather excited, because I loved Freakonomics and I rather hoped this was going to be more of the same. It wasn’t. It was so much more. This is without doubt the best book I’ve read this year, and probably one of the most important books I’ve ever read.
In Economyths, David Orrell dramatically demonstrates that neo-classical economics, the basic economics still taught in our universities is absolute rubbish. It has always worried me that winners of the Nobel Prizeish Economics prize (not quite a real Nobel Prize) seemed to contradict each other from year to year. That shouldn’t happen in a science. Yes there will be shifts of direction, but not this random pulling too and fro. Orrell exposes the rotten heart of economics. What we have here is an ideology that pretends to be a science.
What Orrell shows with some humour and powerful analytical precision is how the founders of economics suffered from physics envy. They wanted to be a real science too. So they took the tools of science and applied them – without ever learning the scientific method. One of the fundamentals of the scientific method is that a theory is only good as long as it fits observation. When the data goes adrift of the theory, the theory gets thrown out. Economic theory consistently fails to effectively model the economy, yet the theory isn’t thrown away. Instead the data is cherry-picked, ignoring the bubbles and spikes that are inherently part of the economy, but that the theory can’t cope with.
Orrell shows dramatically how economic theory’s basis on the idea of the market being largely stable, rational and efficient is absolute baloney. Yet this is what every economics undergraduate is taught, and how the pathetically poor models and structures employed by banks and other financial institutions to manage risk work. And guess what? After messing things up, those same models and controls are back in place again.
It’s made clear that not all economists are tied to the neo-classical model. There are some specialists who do know more about dynamic systems and networks and other more appropriate ideas to match what’s really happening, but they seem to be in the minority, and certainly not in control of the economics academic hierarchy.
The book isn’t perfect. It’s rather repetitious on the key points, and I found the chapter on feminist economics less convincing than the rest. But this doesn’t undermine the fact that it’s very readable, takes a truly scientific view of economics and is absolutely essential reading. Forget the subtitle ‘ten ways that economics gets it wrong’ – that’s much too weak.
There are other books taking on economics, but I’ve not come across another that explains it so well for the layperson, takes in the credit crunch, totally destroys the validity of economics as we know it and should be required reading for every politician and banker. No, make that every voter in the land. This ought to be a real game changer of a book. Read it.

Paperback 

Kindle 
Review by Brian Clegg

Comments

Popular posts from this blog

Beyond Weird - Philip Ball *****

It would be easy to think 'Surely we don't need another book on quantum physics.' There are loads of them. Anyone should be happy with The Quantum Age on applications and the basics, Cracking Quantum Physics for an illustrated introduction or In Search of Schrödinger's Cat for classic history of science coverage. Don't be fooled, though - because in Beyond Weird, Philip Ball has done something rare in my experience until Quantum Sense and Nonsense came along. It makes an attempt not to describe quantum physics, but to explain why it is the way it is.

Historically this has rarely happened. It's true that physicists have come up with various interpretations of quantum physics, but these are designed as technical mechanisms to bridge the gap between theory and the world as we see it, rather than explanations that would make sense to the ordinary reader.

Ball does not ignore the interpretations, though he clearly isn't happy with any of them. He seems to come clo…

Jim Baggott - Four Way Interview

Jim Baggott is a freelance science writer. He trained as a scientist, completing a doctorate in physical chemistry at Oxford in the early 80s, before embarking on post-doctoral research studies at Oxford and at Stanford University in California. He gave up a tenured lectureship at the University of Reading after five years in order to gain experience in the commercial world. He worked for Shell International Petroleum for 11 years before leaving to establish his own business consultancy and training practice. He writes about science, science history and philosophy in what spare time he can find. His books include Atomic: The First War of Physics and the Secret History of the Atom Bomb (2009), Higgs: The Invention and Discovery of the ‘God Particle’ (2012), Mass: The Quest to Understand Matter from Greek Atoms to Quantum Fields (2017), and, most recently, Quantum Space: Loop Quantum Gravity and the Search for the Structure of Space, Time, and the Universe (2018). For more info see: www…

Quantum Space: Jim Baggott *****

There's no doubt that Jim Baggott is one of the best popular science writers currently active. He specialises in taking really difficult topics and giving a more in-depth look at them than most of his peers. The majority of the time he achieves with a fluid writing style that remains easily readable, though inevitably there are some aspects that are difficult for the readers to get their heads around - and this is certainly true of his latest title Quantum Space, which takes on loop quantum gravity.

As Baggott points out, you could easily think that string theory was the only game in town when it comes to the ultimate challenge in physics, finding a way to unify the currently incompatible general theory of relativity and quantum theory. Between them, these two behemoths of twentieth century physics underlie the vast bulk of physics very well - but they simply can't be put together. String theory (and its big brother M-theory, which as Baggott points out, is not actually a the…