That is the new book by Andrei Shleifer, and it collects his major and very important writings on regulation and law and economics, many with notable co-authors. Some of these papers have been discussed previously on MarginalRevolution. If you wish to own those papers, this is your book.
The skills necessary to ride a bike are multifaceted, complex and not at all obvious or even easily explicable to the conscious mind. Once you learn, however, you never forget–that is the power of habit. Without the power of habit, we would be lost. Once a routine is programmed into system one (to use Kahneman’s terminology) we can accomplish great skills with astonishing ease. Our conscious mind, our system two, is not nearly fast enough or accurate enough to handle even what seems like a relatively simple task such as hitting a golf ball–which is why sports stars must learn to turn off system two, to practice “the art of not thinking,” in order to succeed.
Habits, however, can easily lead one into error. In the picture at right, which yellow line is longer? System one tells us that the l
ine at the top is longer even though we all know that the lines are the same size. Measure once, measure twice, measure again and again and still the one at top looks longer at first glance. Now consider that this task is simple and system two knows with great certainty and conviction that the lines are the same and yet even so, it takes effort to overcome system one. Is it any wonder that we have much greater difficulty overcoming system one when the task is more complicated and system two less certain?
You never forget how to ride a bike. You also never forget how to eat, drink, or gamble–that is, you never forget the cues and rewards that boot up your behavioral routine, the habit loop. The habit loop is great when we need to reverse out of the driveway in the morning; cue the routine and let the zombie-within take over–we don’t even have to think about it–and we are out of the driveway in a flash. It’s not so 
great when we don’t want to eat the cookie on the counter–the cookie is seen, the routine is cued and the zombie-within gobbles it up–we don’t even have to think about it–oh sure, sometimes system two protests but heh what’s one cookie? And who is to say, maybe the line at the top is longer, it sure looks that way. Yum.
System two is at a distinct disadvantage and never more so when system one is backed by billions of dollars in advertising and research designed to encourage system one and armor it against the competition, skeptical system two. Yes, a company can make money selling rope to system two, but system one is the big spender.
Habits can never truly be broken but if one can recognize the cues and substitute different rewards to produce new routines, bad habits can be replaced with other, hopefully better habits. It’s habits all the way down but we have some choice about which habits bear the ego.
Charles Duhigg’s The Power of Habit, about which I am riffing off here, is all about habits and how they play out in the lives of people, organizations and cultures. I most enjoyed the opening and closing sections on the psychology of habits which can be read as a kind of user’s manual for managing your system one. The Power of Habit, following the Gladwellian style, also includes sections on the habits of corporations and groups (hello lucrative speaking gigs) some of these lost the main theme for me but the stories about Alcoa, Starbucks and the Civil Rights movement were still very good.
Duhigg is an excellent writer (he is the co-author of the recent investigative article on Apple, manufacturing and China that received so much attention) It will also not have escaped the reader’s attention that if a book about habits isn’t a great read then the author doesn’t know his material. Duhigg knows his material. The Power of Habit was hard to put down.
I usually find “derelict fiction” unappealing (I don’t for instance enjoy Trainspotting, although I admit its aesthetic merits, nor did I like Drugstore Cowboy; someone should write an essay on the merits and demerits of drug-based fiction), but these books are for me compulsively readable and the prose is more vital than almost anything else being written. They are by Edward St. Aubyn and you can buy the first four of them here, the final one here. By no means should you let these novels be defined by their excerpts, but here are a few:
How could he ever hope to give up drugs? They filled him with such intense emotion. The sense of power they gave him was, admittedly, rather subjective (ruling the world from under the bedcovers, until the milkman arrived and you thought he was a platoon of stormtroopers come to steal your drugs and splatter your brains across the wall), but then again life was so subjective.
And:
If he got her he would give up drugs forever, or at least have someone really attractive to take them with. He giggled wildly, wrapping a towel around himself and striking back into his bedroom with renewed vigour.
And:
Fergus took me to the coast and forced me to go snorkeling. All I can say is that the Great Barrier Reef is the most vulgar thing I’ve ever seen. It’s one’s worst nightmare, full of frightful loud colours, peacock blues, and impossible oranges all higgledy-piggledy while one’s mask floods.
If you are wondering, drug addiction is a central theme in only some of these books, no more than half actually. There are also scenes of child abuse, family, and Australia.
“Whitney Houston: 15 ebooks on singer published since her death”
For one thing, this may blunt the “affiliation demand” to buy CDs or music downloads to honor her life.
Hat tip goes to Bookslut.
Part In Defense of Food: An Eater’s Manifesto and part Roadfood, this is a culinary coming-out party for Cowen (economics, George Mason Univ.), who up to now has been known for more standard economic works like The Great Stagnation. This latest book combines economic and environmental messages, all written in a highly entertaining and informative style—often with a counterintuitive twist. The real story, though, is the author and his techniques for finding and eating delicious, inexpensive food from all over the world. Thus, we get tips on how to obtain good Chinese food from local, not-so-authentic places; which strip malls are likely to have the best restaurants (who knew they were in strip malls to begin with?); using Google to turn up unexpected restaurant gems; and why places filled with fun, laughing, drinking people often don’t have good food. An entire chapter is devoted to barbecue, and another provides specific suggestions for eating well in numerous countries.
VERDICT A fun and informative book that environmentalists, economists, and (most of all) foodies will enjoy. Recommended for all. [See Prepub Alert, 10/7/11.]—Susan Hurst, Miami Univ. Libs., Oxford, OH
By Carl T. Bogus. It is an excellent and admirable book, highly readable, and also a good example of how liberals should write about conservatives.
You can order it here. My previous coverage of Carl T. Bogus is here.
The Hill: Six House Democrats, led by Rep. Dennis Kucinich (D-Ohio), want to set up a “Reasonable Profits Board” to control gas profits.
The Democrats, worried about higher gas prices, want to set up a board that would apply a “windfall profit tax” as high as 100 percent on the sale of oil and gas, according to their legislation.
…The Gas Price Spike Act, H.R. 3784, would apply a windfall tax on the sale of oil and gas that ranges from 50 percent to 100 percent on all surplus earnings exceeding “a reasonable profit.” It would set up a Reasonable Profits Board made up of three presidential nominees that will serve three-year terms.
And here directly from the proposed bill:
(4) REASONABLE PROFIT.—The term ‘reasonable profit’ means the amount determined by the Reasonable Profits Board to be a reasonable profit on the sale.
Addendum: Here is Bryan Caplan’s classic, Atlas Shrugged and Public Choice: The Obvious Parallels and here is the award-winning Atlas Shrugged app.
“XXXX is becoming more and more convinced that Tyler Cowen and Alex Tabarrok‘s textbook is the big news in the field of economics education. Hope to use it for my class soon, wish I had it when I was a student.”
The second editions are now out, Micro, Macro, and a consolidated book, more information here.
That is the new book by Ben Casnocha and Reid Hoffman and the subtitle is Adapt to the Future, Invest in Yourself, and Transform Your Career. if you are starting a career, it is an excellent book for thinking through the practical issues you will face in branding yourself in what is becoming a more volatile and very different labor market. The book’s home page is here.
Ken writes:
I was scouring your blog for Fyodor Dostoevsky and was surprised to see no mentions. I was just wondering your thoughts on him. Currently reading the Brothers Karamazov and it’s fantastic.
Brothers Karamazov spent seven or so years as my favorite book, starting in high school. I’m not suggesting it is juvenile, only that I find it hard to go back and enjoy things at lower levels than I did before (I also don’t like to eat in still-good but declining restaurants). I no longer find Notes from Underground interesting, as I regard its questions as a dead end. I’d sooner reread Pascal. I never got through The Idiot or Demons in the first place. About two years ago I read House of the Dead and liked it, though it felt like a respite from the more typical conception of Dostoyevsky.
How much can you like Dostoyevsky anyway? My sense is that he is probably underrated as a pure writer (much of it comes across as garbage in English translation, but perhaps is quite biting or comic or interestingly manic), and overrated as a source of the “novel of ideas.”
If you enter “Dostoyevsky” into the search function of Twitter, you don’t come up with much interesting these days.
All of a sudden it is pulled out of the closest as a weapon against Charles Murray, such as by Paul Krugman (and here and here), Rortybomb, David Frum, and others. Bryan Caplan brings some sanity to the debate:
I’m baffled by people who blame declining marriage rates on poverty. Why? Because being single is more expensive than being married. Picture two singles living separately. If they marry, they sharply cut their total housing costs. They cut the total cost of furniture, appliances, fuel, and health insurance. Even groceries get cheaper: think CostCo.
These savings are especially blatant when your income is low. Even the official poverty line acknowledges them. The Poverty Threshold for a household with one adult is $11,139; the Poverty Threshold for a household with two adults is $14,218. When two individuals at the poverty line maintain separate households, they’re effectively spending 2*$11,139-$14,218=$8,060 a year to stay single.
But wait, there’s more. Marriage doesn’t just cut expenses. It raises couples’ income. In the NLSY, married men earn about 40% more than comparable single men; married women earn about 10% less than comparable single women. From a couples’ point of view, that’s a big net bonus. And much of this bonus seems to be causal.
More plausibly it is the rise in female income (among other factors, including the rise of birth control, read more here) which is behind the decline in marriage, but that doesn’t fit with traditional mood affiliation, which finds the rise in female income to be good (which it is), and the decline in marriage to be — neither good nor bad per se but not exactly worth celebrating. If you can blame capitalism and wage stagnation for the decline of the family among lower earners, so much the better for ideology but as a sociological proposition that is a very weak hypothesis (do you see convincing links to real sociological evidence, showing this to be the dominant factor? No) and as Caplan shows it doesn’t fit with the economics either.
Remind me again, how is wage stagnation supposed to explain the pronounced decline in religiosity, among lower earners, as shown by Murray? It’s well-known that a secular outlook is a normal good, and that on average poorer countries are more religious than wealthier countries.
I’m struck by how many people are offering negative comment on the new Murray book who have not read it, or who do not appear to have read it. I found it to be a much less controversial book than the commentary makes it seem, and actually I had stopped thinking about it, except for all the negative reviews I see it getting. It is unpopular because it disrupts current moral narratives about economic and social decline, as much on the right as on the left I might add, not because it is relying on dubious facts. It is simply redescribing inequality through a somewhat different lens. There’s much less at stake here than meets the eye.
Maybe I should not even be responding, but then again I am a determinist and does not Karl Smith have a good forecasting record to date?
I am pleased that Publisher’s Weekly has offered a starred review to my forthcoming book:
Enlightened consumerism, not ideology, is the surest path to tasty and responsible dining, argues this yummy gastronomic treatise. Economist and restaurant critic Cowen (The Great Stagnation) takes readers along as he eats, shops, and cooks in a diversity of spicy settings, including a Nicaraguan tamale stand, the greens aisle at the Great Wall supermarket chain, backwoods barbeque pits, and his own kitchen, where he wrestles with Mexican cuisine. He focuses on how the interplay between creative suppliers and demanding customers produces good, cheap food, an approach that yields offbeat insights into, for example, why the menu item that sounds the least appetizing usually tastes great and why you should never eat in a place filled with beautiful people having a great time (that restaurant’s specialty, he reasons, is the scene, not the food). Cowen also offers a telling contrarian critique of high-minded food orthodoxies that extols agribusiness, debunks the environmental benefits of locavorism, and toasts genetically modified organisms. Cowen writes like your favorite wised-up food maven, folding encyclopedic knowledge and piquant food porn—“the pork was a little chewy but flavorful, and the achiote sauce gave it a tanginess”—into a breezy, conversational style; the result is mouth-watering food for thought.
You can pre-order the book on Amazon here. For Barnes & Noble here. For Indiebound.org here.
Timothy Taylor, The Instant Economist: Everything You Need to Know About How the Economy Works is too elementary for most MR readers but it is well executed and would make a good gift for anyone needing an introduction to economic reasoning.
Larry Kotlikoff and Scott Burns have their new The Clash of Generations: Saving Ourselves, Our Kids, and Our Economy, due out in March. I believe they are still fiscal pessimists.
There is Ruchir Sharma, Breakout Nations: In Pursuit of the Next Economic Miracles, due out in April.
I reviewed Ruth Grant’s new Strings Attached: When do Incentives Corrupt? here, for Science, university readers can get through the gate.
Alessandra Casella, Storable Votes: Protecting the Minority Voice, calls for a system where you can abstain from voting on one measure and receive an extra vote on something else.
Christopher Balding, Sovereign Wealth Funds: The New Intersection of Wealth and Politics is a useful overview.
Jo Guldi, Roads to Power: Britain Invents the Infrastructure State is a good and also conceptual history of 19th century road building.
I loved Arthur Schnitzler’s Casanova’s Homecoming, free on Kindle, which I never had read before. Alice James: A Biography, by Jean Strouse, is a very good look at her life (she is the sister) and the life of the James family.
There is The Southern Tiger: Chile’s Fight for a Democratic and Prosperous Future, by Ricardo Lagos, Elizabeth Dickinson, and Blake Hounshell, next up on my Kindle.
I recommend Michael Grabell, Money Well-Spent?: The Truth Behind the Trillion-Dollar Stimulus, The Biggest Economic Recovery Plan in History. It is a very good journalistic account of how the money was spent, and less scandal-mongering than the title might indicate. I found it to be quite an objective account. There should be more books like this, looking at the nuts and bolts of economic legislation.
It is a wide-ranging dialogue with Timothy Snyder, you can buy it here. I will gladly recommend this book, but I have mixed feelings about it. It is Judt’s “deathbed conversations” with Snyder, when he was paralyzed.
Is it fascinating? Yes. Did I read it straight through without pausing? Yes. Did I learn a lot? Yes.
Yet it doesn’t show Judt in such an overwhelmingly favorable light. He is cranky, unfair to his intellectual opponents, and he repeatedly misrepresents thinkers such as Hayek on some fairly simple points. He conducts unsubstantiated attacks on various New York Times columnists, as if they had once beaten him in a debate and this was his revenge. It shows his lifelong and mostly unhealthy obsession with what Daniel Klein has called “The People’s Romance.” Unlike in some of his previous writings, his proposals for a one-state solution to the Israel-Palestine problem come off as an irresponsible and somewhat flip symbolic gesture, easy enough to make because he doesn’t have to live with the outcome. As a reader and reviewer it is hard to not wonder whether/how Judt was medicated during these conversations, and how well he had thought through his lack of editing options before publication. Or is this the real Judt? Are we all really like this? Pondering that question is as interesting as the dialogue itself.
The Austrians will be happy when Judt writes: “The three quarters of century that followed Austria’s collapse in the 1930s can be seen as a duel between Keynes and Hayek.” Yet he has the odd view that free market ideas were “imported to the U.S. in the suitcases of a handful of disabused Viennese intellectuals.” Others may underrate the importance of central/eastern Europe but in these dialogues he overrates it.
One does not have to agree with Hayek’s Road to Serfdom to find this an unfair characterization:
Hayek is quite explicit on this count: if you begin with welfare policies of any sort — directing individuals, taxing for social ends, engineering the outcomes of market relationships — you will end up with Hitler.
My favorite part of the book comes at Kindle location 1294, here is part of that discussion:
But even when Blunt was outed as a Soviet spy, in 1979, his standing in high society, and in the distinctive codes of that society in England, still protected him…Thus Blunt — a spy, a communist, a dissembler, a liar and a man who may have actively contributed to the exposure and death of British agents — was nonetheless deemed by some of the his colleagues to be guilty of no crime serious enough to justify depriving him of the fellowship of the British Academy.
If you are seeking to “normalize” this review, I consider Judt’s Past Imperfect to be one of the best books of the last few decades, his Postwar to be one of my favorite books ever, and his late essays to be some of the best writing, in any genre, in a long time. (Though I didn’t like Ill Fares the Land.) I can recommend this too, as something worth consuming and pondering and spending money on, but I still have a slightly queasy feeling in my stomach.
