Most popular posts of 2017

The insight from this year’s ‘most popular’ reckoning is …. that people love lists. The first four places in fact go to lists. Here’s the full top ten:

  1. The year ahead in economics books – or at least my gleanings from the spring catalogues
  2. The Enlightened Economist Prize longlist
  3. The Enlightened Economist Prize winner
  4. A look ahead from the autumn publishers’ catalogues
  5. My review of Jean Tirole’s Economics for the Common Good
  6. An appreciation of Will Baumol
  7. My review of a new biography of Edith Penrose
  8. My review of Dani Rodrik’s Straight Talk on Trade
  9. A trailer for Dani Rodrik’s Straight Talk on Trade
  10. A review of Howard Wainer’s Truth and Truthiness

If it was only about traffic, I’d stick to lists, Jean Tirole and Dani Rodrik in 2018.

Price: £16.96
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No escape from the target setting arms race?

Among my holiday reads has been Jerry Muller’s The Tyranny of Metrics, published in the UK in a couple of weeks (can be pre-ordered now). The broad thesis of the book, which is a lively read, will be familiar to readers of the literature on the gaming of public service targets. This short book is stuffed with examples of the counter-productive results of insistence on numerical targets.

There is an interesting chapter on the origins of metric-fixation (at least in capitalist economies – the Soviet Union was always rather keen on it), which starts: “The demand for measured accountability and transparency waxes as trust wanes.” Social change following the explosion of protest against authority in the 1960s and the erosion of the post-war class certainties contributed to this process. So did the evident failures in public services and nationalised industries by the 1970s. But as the book goes on to note – and has been explored in the academic literature – public services are not like businesses, having a larger, complex set of aims and depending fundamentally on intrinsic motivation. A thriving public sector is important to the health of the wider economy: “A capitalist society depends for its flourishing on a variety of institutions that provide a counterweight to the market with its focus on monetary gain.”

The book goes on to give a range of examples of targets turned counter-productive in arenas from higher education to medicine and policing to business. Yes, business too. For here targets are linked to remuneration. Yet, as the book notes, economic theory (Holmstrom and Milgrom, as I describe here) and evidence point firmly away from rewarding the attainment of targets whenever individual effort is un-monitorable. Not that this has prevented to spread of performance pay or bonuses, Muller observes: “Although there is a large body of scholarship in the fields of psychology and economics that call into question the premises and effectiveness of pay for measured performance, that literature seems to have done little to halt the spread of metric fixation.” The book ends with a section describing how to use targets intelligently – think about what you’re trying to measure, why and for what purpose. Above all, think. The frustration is that it offers no thoughts about how to roll back the vast swathes of counter-prouctive targetry already afflicting us. Just imagine the outcry if any politician promises a ‘bonfire of the targets’ or less transparency. On the contrary, the arms race seems as intense as ever – when the pitfalls of one type of target are recognized, the solution is more complicated metrics. But dearmament is what we need.

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Rhetoric and reality in economics

There are plenty of ill-informed criticisms of economics, alongside the very valid criticisms of the subject. It’s frustrating if one wants to see the discipline move in desirable directions – a higher proportion of women and people who aren’t white & middle class, less ‘boys’ toys’ abstraction, more open (again) to history, sociology and other related subjects, etc – because responding to ill-founded critiques is such a waste of time. Yet the false myths need busting if real reform is to take place.

A recent article by Larry Elliott in the Guardian was outstandingly ill-informed. So much so that it prompted some of the UK’s most esteemed economists to write an excellent reply in Prospect. Their most important single point is, perhaps, that the econ-bashers are feeding the dangerous current in politics of disparaging expertise. We economists need to be duly modest about what we know, but we certainly know more than, say, some current members of the Cabinet.

I tweeted the link to the Prospect article, which led someone to come back on Twitter with this.

@DianeCoyle1859 @prospect_uk Gonna throw a bit of Deidre McCloskey’s ‘Rhetoric of Economics’ in here:
21/12/2017 08:42

Here is the McCloskey quotation:

rhetSo I turned to my copy of McCloskey’s 1985 Rhetoric of Economics and particularly the postscript to the 1998 edition. There she is at some pains to correct readers of the 1st edition who’d concluded she is ‘against’ mathematics in economics, saying: “A lot of good work gets done in economics, new facts and new ideas. Economists are not stupid or lazy, not at all. I love the field. I belong to the mainstream.” Her target is what she describes as the ‘sandbox for boys’ games’ – ultra-mathematical and abstract – far from a wholesale criticism of maths in econ. Famously, she also condemns the unthinking worship of statistical significance – and indeed any economist worth their salt will also be absorbing the recent papers by Alwyn Young and by Ioannides et al in the Economic Journal.

Still, one can’t plonk The Rhetoric of Economics (remember, pub. 1985) down as a killer retort to the economists’ demolition of the latest dangerously misleading attack. As the Prospect economists note:

The way economics is done has been transformed in the past 30 years with an empirical revolution, meaning we now use fine-grained data on individuals, households and firms. In a recent survey of published work in top journals, over three quarters of papers analysed data collected either by the researchers themselves or from secondary sources. Economists provide evidence, increasingly using randomised control trials, or big data. Often this leads to theories being supported or knocked down: this is the bread and butter of modern economics.

My 2007 book The Soulful Science described a lot of the change since the 1980s this refers to. Perhaps it’s too much to hope for, but I do wish people who condemn economics would actually pay more attention to #whateconomistsreallydo


Winner of the 2017 Enlightened Economist Prize

As ever, it has been much harder to select one book from my longlist than it was to narrow it down to those ten. After mulling it over for a few days, I can announce today that the winner is Jean Tirole’s Economics for the Common Good. My review of it is here. It has been widely reviewed elsewhere – here is The Economist and the FT and Breaking Views.

Price: £16.96
Was: £24.95

The reason – apart from it being a great read about the economics profession and about the kinds of policy problem on which economics can shed real light – is that in these times of disparaging ‘experts’ and ignoring evidence, it is great to have such a distinguished economist explaining for a wide audience the importance of evidence and expertise.

Festival of Economics 2017, Bristol Festival of Ideas, Bristol

Festival of Economics 2017, Bristol Festival of Ideas, Bristol

Photo courtesy of Bhagesh Sachania Photography


Rational, level-headed, compelling, cheerful – our ‘Perspectives’ series

Seeing the materials for the latest in our Perspectives series – Driverless Cars: On A Road to Nowhere by Christian Wolmar – has prompted me to boast a little. This is the 14th title in the series, which started out as an experiment to see if there was any appetite for short, focused books about economics and related subjects. In my heart of hearts, I wasn’t at all sure we’d succeed, so my expectations have been greatly exceeded!

Christian’s book is a wonderful, and passionate, tirade against driverless car hype, but the book is also very persuasively argued. My scepticism about this particular technology is now pretty solid. As this bit of Giles Chapman’s blurb puts it, “This is just what the robot evangelists don’t want you to read: a rational, levelheaded, compelling yet cheerful analysis of why the driverless car‘s route to success is so uncertain.”

It’s difficult to single out individual titles. But to mention a few, both Dave Birch’s books have been best sellers for us – Before Babylon, Beyond Bitcoin and his earlier Identity is the New Money. The recent book by Rebecca and Jack Harding, The Weaponization of Trade is a really thought-provoking analysis of the links between rhetoric and reality, and between trade and international security relations. I have a personal soft spot for Mike Emmerich’s Britain’s Cities, Britain’s Future and Kate Barker’s Housing: Where’s the Plan? because of my own interests. But then when I start looking at the list, I also have to praise – well, all of them. Like David Metz’s Travel Fast or Smart? Julia Unwin’s Why Fight Poverty? …..



There’s an offer for people who want to pre-order Driverless Cars: On A Road to Nowhere and other special offers available – and still time to order as perfect stocking fillers!