Skip to main content

Economyths – David Orrell *****

When I saw this book I was rather excited, because it was before I realised the flaws in 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 
Using these links earns us commission at no cost to you
Review by Brian Clegg

Comments

Popular posts from this blog

Philip Ball - How Life Works Interview

Philip Ball is one of the most versatile science writers operating today, covering topics from colour and music to modern myths and the new biology. He is also a broadcaster, and was an editor at Nature for more than twenty years. He writes regularly in the scientific and popular media and has written many books on the interactions of the sciences, the arts, and wider culture, including Bright Earth: The Invention of Colour, The Music Instinct, and Curiosity: How Science Became Interested in Everything. His book Critical Mass won the 2005 Aventis Prize for Science Books. Ball is also a presenter of Science Stories, the BBC Radio 4 series on the history of science. He trained as a chemist at the University of Oxford and as a physicist at the University of Bristol. He is also the author of The Modern Myths. He lives in London. His latest title is How Life Works . Your book is about the ’new biology’ - how new is ’new’? Great question – because there might be some dispute about that! Many

Stephen Hawking: Genius at Work - Roger Highfield ****

It is easy to suspect that a biographical book from highly-illustrated publisher Dorling Kindersley would be mostly high level fluff, so I was pleasantly surprised at the depth Roger Highfield has worked into this large-format title. Yes, we get some of the ephemera so beloved of such books, such as a whole page dedicated to Hawking's coxing blazer - but there is plenty on Hawking's scientific life and particularly on his many scientific ideas. I've read a couple of biographies of Hawking, but I still came across aspects of his lesser fields here that I didn't remember, as well as the inevitable topics, ranging from Hawking radiation to his attempts to quell the out-of-control nature of the possible string theory universes. We also get plenty of coverage of what could be classified as Hawking the celebrity, whether it be a photograph with the Obamas in the White House, his appearances on Star Trek TNG and The Big Bang Theory or representations of him in the Simpsons. Ha

The Blind Spot - Adam Frank, Marcelo Gleiser and Evan Thompson ****

This is a curate's egg - sections are gripping, others rather dull. Overall the writing could be better... but the central message is fascinating and the book gets four stars despite everything because of this. That central message is that, as the subtitle says, science can't ignore human experience. This is not a cry for 'my truth'. The concept comes from scientists and philosophers of science. Instead it refers to the way that it is very easy to make a handful of mistakes about what we are doing with science, as a result of which most people (including many scientists) totally misunderstand the process and the implications. At the heart of this is confusing mathematical models with reality. It's all too easy when a mathematical model matches observation well to think of that model and its related concepts as factual. What the authors describe as 'the blind spot' is a combination of a number of such errors. These include what the authors call 'the bifur