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It's pretty tragic how little most people understand about basic economics. Not just with respect to how societies function, but basic concepts like incentives

by axiom 19y ago

It's pretty tragic how little most people understand about basic economics. Not just with respect to how societies function, but basic concepts like incentives and the law of supply and demand. Oh, and of course No Free Lunch. So in that spirit, here are a couple of economics books that I quite seriously believe everyone should be forced to read. Economics in One Lesson, by Hazlitt Free to Choose: A Personal Statement, by Milton and Rose Friedman Freakonomics, by Levitt and Dubner (this book is just so damn fun to read) and for the hackers: The God of the Machine, by Paterson (Think engineering principles as applied to economics, history and politics. Probably one of the most interesting books I've read in my entire life, even if I don't entirely agree with the thesis.)

yters 19y ago
Is freakonomics pretty credible? It seemed intriguing, but also smelt a bit of marketing obvious ideas when I flipped through it in the store.
- Tichy 19y ago
  I think several of the stories in it have been debunked. I remember at least reading that the story about the drug dealer turned out to be a hoax - unknown to the authors of the book, but I was disappointed to not at least find a statement regarding the issue on their homepage.
  - axiom 19y ago
    Freakonomics is a great book because it introduces fundamental principles of economics on intuitive grounds. So you're not talking about incentives with respect to society or some other abstract entity, but with respect to specific cases. Plus, as I mentioned above, it's an extremely fun read. Very well written and the ideas presented are definitely compelling. I'd recommend to go as far as to read the original research papers that the book is based on. Especially the abortion-crime one.
    - Tichy 19y ago
      Yes, I also enjoyed reading it. I think their blog is also good.
- axiom 19y ago
  There is definitely some of that. After all the book is targeted towards a popular audience. But that being said there are a couple of remarkably original ideas. For example, going from least to most intersting: 1. Statistically speaking a child is much more likely to drown in a swimming pool than be killed by a gun (of course, corrected for socioeconomic status and all the standard stuff.) Yet we see countless campaigns against gun violence with the argument that x number of kids get killed due to guns, and none for "swimming pool safety" or a host of other things that are far more likely to kill you. 2. There is a study of a daycare center where a problem they were dealing with was parents picking up kids late. So the daycare instituted fines. The result was more parents picking up their kids late. Why? because after conducting interviews they found that the guilt associated with being late was more of a motivator than the small fine. Having paid the fine, the parents no longer felt as bad about being late. That's a very conterintuitive result if you ask me. 3. The famous abortion-crime link. The idea being that the legalization of abortion in the 70s is what caused the massive decrease in violent crime in the 90s. Very convincingly argued. And certainly presents a better theory than The Tipping Point. Anyway. There's more where that came from.
  - jimbokun 19y ago
    "Having paid the fine, the parents no longer felt as bad about being late." It became paid babysitting.
davidmathers 19y ago
[Right Wing] Economics in One Lesson by Henry Hazlitt is primarily a 1940's take on the 1840's essay What is Seen and What is Not Seen by Frederic Bastiat. You can read the original here: http://www.econlib.org/library/Bastiat/basEss1.html http://www.econlib.org/library/Bastiat/basEss1.html
- axiom 19y ago
  Economics in One Lesson is not right wing, it's libertarian. Today, right wing means big government and religion.

by axiom 19y ago

yters 19y ago

Is freakonomics pretty credible? It seemed intriguing, but also smelt a bit of marketing obvious ideas when I flipped through it in the store.

Tichy 19y ago
I think several of the stories in it have been debunked. I remember at least reading that the story about the drug dealer turned out to be a hoax - unknown to the authors of the book, but I was disappointed to not at least find a statement regarding the issue on their homepage.
- axiom 19y ago
  Freakonomics is a great book because it introduces fundamental principles of economics on intuitive grounds. So you're not talking about incentives with respect to society or some other abstract entity, but with respect to specific cases. Plus, as I mentioned above, it's an extremely fun read. Very well written and the ideas presented are definitely compelling. I'd recommend to go as far as to read the original research papers that the book is based on. Especially the abortion-crime one.
  - Tichy 19y ago
    Yes, I also enjoyed reading it. I think their blog is also good.
axiom 19y ago
There is definitely some of that. After all the book is targeted towards a popular audience. But that being said there are a couple of remarkably original ideas. For example, going from least to most intersting: 1. Statistically speaking a child is much more likely to drown in a swimming pool than be killed by a gun (of course, corrected for socioeconomic status and all the standard stuff.) Yet we see countless campaigns against gun violence with the argument that x number of kids get killed due to guns, and none for "swimming pool safety" or a host of other things that are far more likely to kill you. 2. There is a study of a daycare center where a problem they were dealing with was parents picking up kids late. So the daycare instituted fines. The result was more parents picking up their kids late. Why? because after conducting interviews they found that the guilt associated with being late was more of a motivator than the small fine. Having paid the fine, the parents no longer felt as bad about being late. That's a very conterintuitive result if you ask me. 3. The famous abortion-crime link. The idea being that the legalization of abortion in the 70s is what caused the massive decrease in violent crime in the 90s. Very convincingly argued. And certainly presents a better theory than The Tipping Point. Anyway. There's more where that came from.
- jimbokun 19y ago
  "Having paid the fine, the parents no longer felt as bad about being late." It became paid babysitting.

davidmathers 19y ago

[Right Wing] Economics in One Lesson by Henry Hazlitt is primarily a 1940's take on the 1840's essay What is Seen and What is Not Seen by Frederic Bastiat. You can read the original here: http://www.econlib.org/library/Bastiat/basEss1.html http://www.econlib.org/library/Bastiat/basEss1.html

axiom 19y ago
Economics in One Lesson is not right wing, it's libertarian. Today, right wing means big government and religion.