The Logic of Life: The Rational Economics of an Irrational World | Tim Harford

The Logic of Life: The Rational Economics of an Irrational World | Tim Harford | Thought provoking

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The Logic of Life:...

	The Logic of Life: The Rational Economics of an Irrational World Tim Harford Random House, 2008 - 272 pages average customer review:based on 34 reviews view larger image
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highly recommended

Life sometimes seems illogical. Individuals do strange things: take drugs, have unprotected sex, mug each other. Love seems irrational, and so does divorce. On a larger scale, life seems no fairer or easier to fathom: Why do some neighborhoods thrive and others become ghettos? Why is racism so persistent? Why is your idiot boss paid a fortune for sitting behind a mahogany altar? Thorny questions?and you might be surprised to hear the answers coming from an economist.

But Tim Harford, award-winning journalist and author of the bestseller The Undercover Economist, likes to spring surprises. In this deftly reasoned book, Harford argues that life is logical after all. Under the surface of everyday insanity, hidden incentives are at work, and Harford shows these incentives emerging in the most unlikely places.

Using tools ranging from animal experiments to supercomputer simulations, an ambitious new breed of economist is trying to unlock the secrets of society. The Logic of Life is the first book to map out the astonishing insights and frustrating blind spots of this new economics in a way that anyone can enjoy.

The Logic of Life presents an X-ray image of human life, stripping away the surface to show us a picture that is revealing, enthralling, and sometimes disturbing. The stories that emerge are not about data or equations but about people: the athlete who survived a shocking murder attempt, the computer geek who beat the hard-bitten poker pros, the economist who defied Henry Kissinger and faked an invasion of Berlin, the king who tried to buy off a revolution.
Once you?ve read this quotable and addictive book, life will never look the same again.

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Human are both logic and irational creature

The principle of the book is not very alien that human have logical and irrational qualities but the to use economics principle to explain many social phenomena is indeed intriguing

Thought provoking

Offers a slightly different perspective for understanding human behavior. I vastly prefer Harford's writing style to others in the genre. I don't care so much if we are labeled as rational or irrational, it seems to be a less relevant point to me. In fact, I would argue that the rational results he claims are inductive, not deductive, so they do not correspond with the logical thinking process that tends to accompany deductive reasoning. He doesn't claim that they do, it's just that there seems to be a silly argument out there about whether we are rational or not. I don't think it matters, as the means by which we come to a decision are varied.

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Well written, but contentious

I enjoyed 'Freakanomics' & Harford's earlier book, 'The Undercover Economist'.

This was an enjoyable read with topics including poker tournaments, divorce, workplace politics, neighbourhood effects, racism, geographic agglomeration, voting and long-term economic growth.

I have some queries about the racism section though, and Harford's query "Why bother to get a degree or work experience if you are young, gifted, and black?". Bryan Caplan has looked at this and wrote:

"I tested these claims using one of the world's best labor data sets, the NLSY. The results directly contradict Tim's self-fulfilling prophesy story. Blacks actually get a substantially larger return to education than non-blacks! The same goes for experience, though the result is not statistically significant. The real lesson of the data is that if you are young, gifted, and black, you should get a ton of education, because it has an exceptionally large pay-off."

Also, I wonder if Harford considered Dr Satoshi Kanazawa's paper "The Myth of Racial Discrimination in Pay in the United States" (2005, Managerial and Decision Economics. 26: 285-294).

Overall, an interesting addition to the growing number of 'pop economics' books on the market, but not quite up to the predecessors.

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Logic and Rationality is Not Really What This book is About

The book is interesting and worthwhile to read, because it reveals studies and statistics (mostly by others) that illuminate why individuals and why society behave like they do. For example, it was surprising to learn how conclusive are the data supporting the idea that criminals actually are deterred by the severity of punishments specified by law. So we learn that criminals are more rational than many expert criminologists who argue for shorter jail sentences and condemn the irrationality of the death penalty.

The book does not prove that people are mostly rational or that people are not mostly rational, but simply that if one is clever or lucky about finding data, one can pinpoint a reason behind any observed behavior. For example, the evidence is convincing that black people in the USA have a disadvantage getting jobs measured against whites of similar qualifications. The author concludes it is rational for blacks to give up on education or, at least, devalue it and to adopt the social norm that getting an education is "acting white".

I disagree with how the author's uses the words, rational and logic. Just because there is a reason for a behavior does not mean the behavior is rational or logical. To take another example, short men and ugly men statistically have a great disadvantage gaining financial success. Men who are short or ugly men thus have a reason to abandon their personal efforts to compete with other mean, but it would not be rational or logical to do so.

That people have reasons for what they do is no great insight, so the author overreached when he selected the title of the book. But it was still interesting to read of some totally unexpected reasons the world is like it is.

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reviews: page 1, 2, 3, 4, 5, 6, 7

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