Quite a few friends and even my Microeconomics professor recommended that I read this book. It turned out to be an easy and fairly quick read considering how long I take on some other books. The main thing that I really gained was a better understanding of what economics is all about and how it can be observed and even used in daily life:
Economics is, at root, the study of incentives…. An incentive is a bullet, a lever, a key: an often tiny object with astonishing power to change a situation…. There are three basic flavors of incentive: economic, social, and moral.
The majority of the book is observations that the author uses to bring out the reality of economics in our daily lives. Through this, he identifies certain key points in which economics can actually help us to understand the world around us.
One point that he brought out and is particularly relevant to the Information Age we live in today:
Information is a beacon, a cudgel, an olive branch, a deterrent, depending on who wields it and how. Information is so powerful that the assumption of information, even if the information does not actually exist, can have a sobering effect.
And the effect of the Internet:
The Internet has accomplished what no consumer advocate could: it has vastly shrunk the gap between the experts and the public.
Of course, the one illustration that the book is most famous for is the one about the decrease in crime being correlated to the legalization of abortion. The author does qualify his observation with a nod towards one of my favorite authors:
To discover that abortion was one of the greatest crime-lowering factors in American history is, needless to say, jarring. It feels less Darwinian than Swiftian; it calls to mind a long ago dart attributed to G.K. Chesterton: when there aren’t enough hats to go around, the problem isn’t solved by lopping off some heads…. But one need not oppose abortion on moral or religious grounds to feel shaken by the notion of a private sadness being converted into a public good.
The author ends the book with an epilogue in which he repeats his assertion that economics is the observation of the real world, whereas morality is a representation of the ideal. As a personal reflection then, in learning to observe the real world, I am learning to reconcile those morals that I hold to be true with the actuality of how I act in, within and upon the real world.
I found a couple of online resources in order to follow along in the authors’ continuing development of his ideas: