Sunday, February 25, 2007

"The Soulful Science"

Diane Coyle is a writer and Harvard economics Ph.D. whose books include Sex, Drugs and Economics: An Unconventional Introduction to Economics and The Weightless World: Strategies for Managing the Digital Economy.

Her new book is The Soulful Science: What Economists Really Do and Why It Matters.

Diane applied the "page 69 test" to The Soulful Science and reported the following:
Page 69 of The Soulful Science isn’t the one I’d choose to draw in the new reader. It starts with the thought-provoking fact that as a third of Brazilians are richer than the poorest French citizens, there’s a one in ten chance that official government aid from France to Brazil will make global income distribution more, not less, unequal. The rest of the page, though, is all about statistics, specifically how to measure and compare living standards in different countries. Moderately dull stuff, on the face of it. But it does illustrate one of the important reasons why economics has changed so much, and changed for the better, during the past generation: the availability of masses of data and the capability to assess the data thanks to computers, have dramatically changed what economists can and do know.

The point I make in the book is that advances in theory and evidence, more or less unknown outside the profession, have returned economics to its Enlightenment roots as the scientific study of human society. Economics has become imperialist: it offers a way of thinking about virtually any aspect of social behaviour. Its distinctiveness is its way of thinking, not its subject matter. The Soulful Science offers examples of economists’ work in subjects ranging from growth and economic development to the new economics of happiness, or‘behavioral’ economics which draws on psychological experiments to make markets work better or understand financial markets. My hope is that it will introduce readers to the power of the subject, and its capacity to improve public policy, and overturn the outdated stereotype that we economists reduce all of society to the profit motive.

Perhaps I can be allowed to quote from page 65, a little earlier in a chapter on tackling world poverty?

…There is plainly much controversy about the diagnosis of what’s wrong with the economies of poor countries. The issue of globalization has become a litmus test of ideological attitudes for many people, with a return among some on the left-of-center of straightforward anticapitalist, antimarket views, and a belief that the world economy is essentially colonial, involving the exploitation of the poor by the rich. At the other extreme is the belief that a return to imperialism would be a good thing for countries which have fared so badly under self-rule.... Among people of more moderate opinions there is still a division of perception between those who believe global capitalism has been essentially beneficial but needs it problems ironing out, and those who believe is has brought some selective benefits but has essentially operated against the interests of the poorest countries.

When the evidence available can be used in support of two opposing views of economic development, each held by well-intentioned and intelligent people, we are clearly not in the realm of hard science. This chapter … asks two related questions. What is the nature of the evidence available on the causes of poverty? And does economics today offer the basis for any professional consensus on diagnosis and policy prescriptions? To give you the headline, the answer is tentatively yes.

And I go on to explain what it is, albeit after half a dozen pages on the statistical indicators on poverty and growth. But I do promise that despite a few statistics and tables, the whole book is completely equation-free.
Read the introduction to The Soulful Science.

Visit the complete list of books in the Page 69 Series.