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Licence to be Bad: How Economics Corrupted Us
'It is going to change the way in which we understand many modern debates about economics, politics, and society' Ha Joon Chang, author of
23 Things They Don't Tell You About Capitalism
Over the past fifty years, the way we value what is 'good' and 'right' has changed dramatically. Behaviour that to our grandparents' generation might have seemed stupid, harmful or simply wicked now seems rational, natural, woven into the very logic of things. And, asserts Jonathan Aldred in this revelatory new book, it's economics that's to blame.
Licence to be Bad tells the story of how a group of economics theorists changed our world, and how a handful of key ideas, from free-riding to Nudge, seeped into our decision-making and, indeed, almost all aspects of our lives. Aldred reveals the extraordinary hold of economics on our morals and values. Economics has corrupted us. But if this hidden transformation is so recent, it can be reversed. Licence to be Bad shows us where to begin.
Over the past fifty years, the way we value what is 'good' and 'right' has changed dramatically. Behaviour that to our grandparents' generation might have seemed stupid, harmful or simply wicked now seems rational, natural, woven into the very logic of things. And, asserts Jonathan Aldred in this revelatory new book, it's economics that's to blame.
Licence to be Bad tells the story of how a group of economics theorists changed our world, and how a handful of key ideas, from free-riding to Nudge, seeped into our decision-making and, indeed, almost all aspects of our lives. Aldred reveals the extraordinary hold of economics on our morals and values. Economics has corrupted us. But if this hidden transformation is so recent, it can be reversed. Licence to be Bad shows us where to begin.
320 pages, Paperback
Published May 7, 2020
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Displaying 1 - 30 of 47 reviews
June 20, 2019
Big time academic economics is a strange area at times and is certainly an acquired taste. Theory has been highly abstract and mathematical for quite a while and the empirical tribulations of trying to show evidence in the world for some theoretical claim are daunting. Readers of popular books and policy summaries may easily fail to notice that this is also an elaborate occupation here, with its own detailed rules and status orderings. Academic jobs that pay well are highly competitive and much of the work and pay may come from consulting, litigation support, or other advisory activities. ...and then there are the journal articles - dense, abstract, with lots of numbers and symbols - not very accessible to most readers. It sometimes seems as if one has stumbled on an alternate culture.
Jonathan Aldred’s new book provides an intelligent and probing look at some of the backstories and inside baseball of contemporary economics. The focal theme is that to build their area, economists have developed a detailed logic of “rational man” - homo economicus - and provided a simplified story of individual greed and autonomy as the basic story for how people do and should act in the brave new world of game theory, public choice economics, behavioral economics, strategic contracting, and the world of perfect competition, the cost disease, and the minimal state. This is a generally well done tour of some key topic areas and is well written and highly informative.
It is easy enough to dismiss some of the artificiality of these theories and models as the requirements of finding solutions to models or addressing statistical problems. The key to the book, however, is how these ideas, have come to be treated as mainstream and even commonplace in current politics, regulation, and corporate management. People in power have come to accept this stuff and economists have come to believe their own theoretical simplifications as being true. The trouble, of course, is that real people do not seem to behave this way (or did not, at least) and Alfred suggests that by embedding economic excesses in rules and regulations, they may come to be adopted by the people involved who will then start behaving according to the dictates of “rational man”.
The tone of the book is highly critical and in my opinion, Professor Aldred is both withering and effective in his critiques. Perhaps the brush is a bit too broad. In all fairness, however, I know many who understand the game and do not believe their own witticisms about selfish behavior. There are many critics both in and outside the field who have made similar criticisms as well.
Having said that, I thoroughly enjoyed the book and it struck numerous chords with me. It works as a distinct criticism. If it prompts people to read further, that is even better.
Jonathan Aldred’s new book provides an intelligent and probing look at some of the backstories and inside baseball of contemporary economics. The focal theme is that to build their area, economists have developed a detailed logic of “rational man” - homo economicus - and provided a simplified story of individual greed and autonomy as the basic story for how people do and should act in the brave new world of game theory, public choice economics, behavioral economics, strategic contracting, and the world of perfect competition, the cost disease, and the minimal state. This is a generally well done tour of some key topic areas and is well written and highly informative.
It is easy enough to dismiss some of the artificiality of these theories and models as the requirements of finding solutions to models or addressing statistical problems. The key to the book, however, is how these ideas, have come to be treated as mainstream and even commonplace in current politics, regulation, and corporate management. People in power have come to accept this stuff and economists have come to believe their own theoretical simplifications as being true. The trouble, of course, is that real people do not seem to behave this way (or did not, at least) and Alfred suggests that by embedding economic excesses in rules and regulations, they may come to be adopted by the people involved who will then start behaving according to the dictates of “rational man”.
The tone of the book is highly critical and in my opinion, Professor Aldred is both withering and effective in his critiques. Perhaps the brush is a bit too broad. In all fairness, however, I know many who understand the game and do not believe their own witticisms about selfish behavior. There are many critics both in and outside the field who have made similar criticisms as well.
Having said that, I thoroughly enjoyed the book and it struck numerous chords with me. It works as a distinct criticism. If it prompts people to read further, that is even better.
January 7, 2021
Published in 2019 and written by a professor of economics and land economy at Cambridge. Licence to be Bad is Aldred's second book, the first one being published in 2009 (nearly a decade ago). Although the title is quite negative or pessimistic and the cover a bit dull, I found the book educative.
This book is a collection of discussions on contemporary economic challenges. I found it to be an interesting take on economics overall, but rather challenging to read. I don't recommend this book for novices, but it's a useful read for budding economists.
Among a variety of things it discusses game theory, unemployment reduction, bribery, the Coase theorem, democracy, crime and so on, while trying to constantly center or redirect the reader towards the real world as a comparison instead of solely focusing on textbook theories. He explains why economic probabilities and predictions are tough to make because the things that make economics as a whole especially at large scale tick is difficult to predict basing it off individuals or group of individuals which constitute the society.
I found it particularly interesting when he discussed ethics when it comes to economic incentives and the high tolerance to inequality that economy still allows.
If you can get over the technical lingo and the somewhat boring tone, you can learn a few things about economy at present. I wasn't ecstatic about reading this book, but I feel I understand US and global economy a little bit better now.
This book is a collection of discussions on contemporary economic challenges. I found it to be an interesting take on economics overall, but rather challenging to read. I don't recommend this book for novices, but it's a useful read for budding economists.
Among a variety of things it discusses game theory, unemployment reduction, bribery, the Coase theorem, democracy, crime and so on, while trying to constantly center or redirect the reader towards the real world as a comparison instead of solely focusing on textbook theories. He explains why economic probabilities and predictions are tough to make because the things that make economics as a whole especially at large scale tick is difficult to predict basing it off individuals or group of individuals which constitute the society.
I found it particularly interesting when he discussed ethics when it comes to economic incentives and the high tolerance to inequality that economy still allows.
If you can get over the technical lingo and the somewhat boring tone, you can learn a few things about economy at present. I wasn't ecstatic about reading this book, but I feel I understand US and global economy a little bit better now.
Read
March 3, 2025There are the economists who want to run the world like a computer, and there are the self-styled moral scientists. Aldred is very much in the second category. And what he seems to be trying to get it is a perceived moral rot in the world at large (as indicated in the title), and he traces the history of this idea in the economics profession, dating back to the first meetings of the Mont Pelerin Society after the Second World War, which is according to him is a rot that extends to everything from the exorbitant annual bonuses of CEOs to that TV show you torrented.
This strikes me as suspect, and I suspect that it’s suspect to you too.
Because while Aldred’s heart is clearly in the right place, he’s too eager to draw connections and create lump categories that shouldn’t necessarily exist. Let’s take two of the economists he calls out – Gary Becker and James M. Buchanan. The first was an icy, robotic right-wing creep who flaunts his smug indifference to human values in the wake of decision-making, while the second was a moralistic right-wing creep who inveighed like a Baptist preacher against bureaucratic mandarins. The creep factor is the commonality, not the “license to be bad.”
And while I sympathize with Aldred’s position that the ubiquitous desire to put one over on the system is sad, I think the root cause is probably the increase in economic precarity in most of the developed economies, which while it can indeed be traced to neoliberalism (a word Aldred assiduously avoids, presumably so as to not seem "partisan"), is nonetheless to be expected, in the same way that endemic corruption is to be expected in the parts of the Global South in which the state is at its core a purely extractive enterprise. So in the same way I wouldn’t blame the guy in Thailand who bribes a cop to get out of a ticket, I wouldn’t blame the guy in the US who fudges his taxes (will remain mum on whether I may have been both of them). And neither of them did so because of the mainstreaming of game theory.
This strikes me as suspect, and I suspect that it’s suspect to you too.
Because while Aldred’s heart is clearly in the right place, he’s too eager to draw connections and create lump categories that shouldn’t necessarily exist. Let’s take two of the economists he calls out – Gary Becker and James M. Buchanan. The first was an icy, robotic right-wing creep who flaunts his smug indifference to human values in the wake of decision-making, while the second was a moralistic right-wing creep who inveighed like a Baptist preacher against bureaucratic mandarins. The creep factor is the commonality, not the “license to be bad.”
And while I sympathize with Aldred’s position that the ubiquitous desire to put one over on the system is sad, I think the root cause is probably the increase in economic precarity in most of the developed economies, which while it can indeed be traced to neoliberalism (a word Aldred assiduously avoids, presumably so as to not seem "partisan"), is nonetheless to be expected, in the same way that endemic corruption is to be expected in the parts of the Global South in which the state is at its core a purely extractive enterprise. So in the same way I wouldn’t blame the guy in Thailand who bribes a cop to get out of a ticket, I wouldn’t blame the guy in the US who fudges his taxes (will remain mum on whether I may have been both of them). And neither of them did so because of the mainstreaming of game theory.
September 15, 2020
A more appropriate sub-heading would be "How Neoliberal Economics Corrupted Us". The choice made is understandable, given that broader titles attract more eyes, so not so much a criticism as an observation. And given that most of contemporary economics is held together by the principles of neoliberal ideas anyway, the 21st century reader won't be left wanting for much.
Aldred spends the vast majority exploring the source of such economics, by scrutinizing 20th century, Chicago School economics that gave us the likes of Hayek & Friedman, whose ideas were then adopted by Reagan & Thatcher in the US & UK, respectively. Thanks to globalization and the disproportionate influence of these two in international trading (and well, in the case of the US, it's often literal military intervention and sponsored coups), the religion of free-market and its crusade against the Keynesian welfare state model spread far beyond their shores and we're left with... what we have today. Cool.
The book is divided into 10 chapters, 8 of which are dedicated to dissecting what (would be fair to presume) Aldred considers to be the most influential theories and ideas in shaping present-day monetary relations and — here's the corruption he talks about — how people view their social relations. He provides ample evidence to suggest that economic postulates have bled into our individual conceptions of right and wrong, leading to a society which now has systems in place to sell citizenships to the highest bidder, has created a market where countries may purchase licences to pollute, and where anti-discrimination laws are constantly being chipped away under the "free market penalizes discrimination" rhetoric. You know, ideas that seem ridiculous if thought about from any angle other than the one that presents profit as the highest social good.
On the other hand, when he's not pointing out the absurdities of our economically-derived beliefs, Aldred is pointing to the pitfalls of the abstract theories within the discipline itself. Famously, economists have come up with some truly absurd ideas by using homo economicus in their models. Homo Economicus being a "rational", narrowly self-interested portrayal of an individual in society who is supposed to be a stand-in for homo sapiens who (surprise, surprise) are neither "rational" nor entirely self-interested. I feel compelled to place doubt upon the word rational as it is used here, since what is considered rational behaviour by economists is prescriptive rather than descriptive. It conjures up a figure that considers mathematical probabilities before making decisions, something that more worldly economists have proved does not match with the lived realities of homo sapiens. In fact, as Aldred readily points out, when these mathematically-minded, "rational" economists are themselves part of experiments that test their theories, they actively choose to not employ what they purport to be "rational behaviour" in their academic work. This happens even when they're granted a second chance and allowed to change their minds about their "irrational" choices — they overwhelmingly stick with their original decisions.
Speaking of mathematics, Aldred seems to suggest that apart from the ideological push from Chicago economists, the new face of economics has a lot to do with the so-called "physics envy" — economists' drive to angle their studies closer to the pure sciences rather than the social sciences. Mathematical rigour takes precedence over ethics, morality, philosophy, etc. devolving to the point of a tendency to place numbers (in monetary terms) upon matters that have no precedents in the real world. There have been serious suggestions from Noble prize winning economists for selling babies in the free market. That should say a lot.
This undermining of the social sciences also shows in the citations of research in the economic discipline, as economists are the least likely to cite research from other disciplines, and are also uniquely the only group that, when questioned alongside historians, sociologists, political scientists, psychologists, and business-school professors, disagreed that inter-disciplinary knowledge is better than knowledge from a single discipline. Much of this can be chalked up to, again, the aforementioned "physics envy", since economists conceive their observational position to be the same as that of a physicist. Some lordly scientist who observes the universe with a rational eye and draws models around it. What they're missing, is the acknowledgement that unlike the particles in physics, when you observe an economy made up of human beings, and create models that will be turned into legislation and corporate practice, your sentient subjects, aware of being observed, will change their behaviour to adapt to the new environment they've been trapped in.
Put plainly, being a social scientist comes with its caveats, and until economists accept it, and change their methods accordingly, we'll continue to speed through with theories that do not do a satisfactory job at capturing the complexities of human society.
The book closes with some suggestions on how the field can transform itself, one most importantly being the use of actual field-work that focuses on solving 'the real problems of real people' rather than crunching abstract numbers for theoretical developments within the field.
What I find personally interesting, is what changes such critique (Aldred is definitely not alone in this fight) can bring to the field. In an age where there's increased awareness (anxiety, more appropriately) about the incoming climate catastrophe and the inability — if not exacerbation — of market-based solutions to tackle them, would economists continue to be bull-headed about the lens they view the world with? Or could they, in the face of possible extinction, expand their view and think of something beyond the same-old financial incentives?
Aldred spends the vast majority exploring the source of such economics, by scrutinizing 20th century, Chicago School economics that gave us the likes of Hayek & Friedman, whose ideas were then adopted by Reagan & Thatcher in the US & UK, respectively. Thanks to globalization and the disproportionate influence of these two in international trading (and well, in the case of the US, it's often literal military intervention and sponsored coups), the religion of free-market and its crusade against the Keynesian welfare state model spread far beyond their shores and we're left with... what we have today. Cool.
The book is divided into 10 chapters, 8 of which are dedicated to dissecting what (would be fair to presume) Aldred considers to be the most influential theories and ideas in shaping present-day monetary relations and — here's the corruption he talks about — how people view their social relations. He provides ample evidence to suggest that economic postulates have bled into our individual conceptions of right and wrong, leading to a society which now has systems in place to sell citizenships to the highest bidder, has created a market where countries may purchase licences to pollute, and where anti-discrimination laws are constantly being chipped away under the "free market penalizes discrimination" rhetoric. You know, ideas that seem ridiculous if thought about from any angle other than the one that presents profit as the highest social good.
On the other hand, when he's not pointing out the absurdities of our economically-derived beliefs, Aldred is pointing to the pitfalls of the abstract theories within the discipline itself. Famously, economists have come up with some truly absurd ideas by using homo economicus in their models. Homo Economicus being a "rational", narrowly self-interested portrayal of an individual in society who is supposed to be a stand-in for homo sapiens who (surprise, surprise) are neither "rational" nor entirely self-interested. I feel compelled to place doubt upon the word rational as it is used here, since what is considered rational behaviour by economists is prescriptive rather than descriptive. It conjures up a figure that considers mathematical probabilities before making decisions, something that more worldly economists have proved does not match with the lived realities of homo sapiens. In fact, as Aldred readily points out, when these mathematically-minded, "rational" economists are themselves part of experiments that test their theories, they actively choose to not employ what they purport to be "rational behaviour" in their academic work. This happens even when they're granted a second chance and allowed to change their minds about their "irrational" choices — they overwhelmingly stick with their original decisions.
Speaking of mathematics, Aldred seems to suggest that apart from the ideological push from Chicago economists, the new face of economics has a lot to do with the so-called "physics envy" — economists' drive to angle their studies closer to the pure sciences rather than the social sciences. Mathematical rigour takes precedence over ethics, morality, philosophy, etc. devolving to the point of a tendency to place numbers (in monetary terms) upon matters that have no precedents in the real world. There have been serious suggestions from Noble prize winning economists for selling babies in the free market. That should say a lot.
This undermining of the social sciences also shows in the citations of research in the economic discipline, as economists are the least likely to cite research from other disciplines, and are also uniquely the only group that, when questioned alongside historians, sociologists, political scientists, psychologists, and business-school professors, disagreed that inter-disciplinary knowledge is better than knowledge from a single discipline. Much of this can be chalked up to, again, the aforementioned "physics envy", since economists conceive their observational position to be the same as that of a physicist. Some lordly scientist who observes the universe with a rational eye and draws models around it. What they're missing, is the acknowledgement that unlike the particles in physics, when you observe an economy made up of human beings, and create models that will be turned into legislation and corporate practice, your sentient subjects, aware of being observed, will change their behaviour to adapt to the new environment they've been trapped in.
Put plainly, being a social scientist comes with its caveats, and until economists accept it, and change their methods accordingly, we'll continue to speed through with theories that do not do a satisfactory job at capturing the complexities of human society.
The book closes with some suggestions on how the field can transform itself, one most importantly being the use of actual field-work that focuses on solving 'the real problems of real people' rather than crunching abstract numbers for theoretical developments within the field.
What I find personally interesting, is what changes such critique (Aldred is definitely not alone in this fight) can bring to the field. In an age where there's increased awareness (anxiety, more appropriately) about the incoming climate catastrophe and the inability — if not exacerbation — of market-based solutions to tackle them, would economists continue to be bull-headed about the lens they view the world with? Or could they, in the face of possible extinction, expand their view and think of something beyond the same-old financial incentives?
March 16, 2020
I really enjoyed this book. The author takes a critical look at some of the major trends and schools of thought in contemporary economics.
He first provides an overview of the significant figures involved in each, be they Nobel prize winners, authors etc. Then he discusses the thinking, it's interpretation, and its effect on modern economics and society.
Often, the interpretation is not as originally intended by the major proponents of the initial research. His conclusion and general thread is that economics has gone a bit off track.
I found it well written and accessible. It was interesting to hear more about names I'd heard of but knew little about,
He first provides an overview of the significant figures involved in each, be they Nobel prize winners, authors etc. Then he discusses the thinking, it's interpretation, and its effect on modern economics and society.
Often, the interpretation is not as originally intended by the major proponents of the initial research. His conclusion and general thread is that economics has gone a bit off track.
I found it well written and accessible. It was interesting to hear more about names I'd heard of but knew little about,
April 13, 2020
If you read Swedish I have written a longer review in Smedjan which will be published shortly. In summary, Aldred basically makes the same old tired criticisms against "neoliberalism" and disguises it as criticism of economics. I had many an angry rant while reading it and I was not very impressed by his critique.
June 11, 2025
5 stars
Shout out to my hosuemate for giving me the book. I honestly loved every bit of it. This is not one of those books where you can give a really detailed summary of it without having made notes (I did not make any notes) but I will give smy favourite highlight:
Free riding is killing our people. The idea that because enough people are not doing something which therefore justifies you not doing something as well is soooo interesting. The book makes a case against this, by explaining how these systems may take into account some free riders, but it cannot be a system that runs for free. Think of train fare evaders, tax evaders, people who don't recycle. The book also makes a case for the moral implications to justifying your inactivity based on the fact that others are similarly inactive, and how this mindset encourages moral decay, under the guise of rational economic thinking. I really liked this. The idea that someone will so you don't have to has really far reaching implications that extend further than economic debates on efficiency.
The book related things back to the layman, but sometimes became pretty dense in theory. That was really the only downside. I really liked it regardless.
Shout out to my hosuemate for giving me the book. I honestly loved every bit of it. This is not one of those books where you can give a really detailed summary of it without having made notes (I did not make any notes) but I will give smy favourite highlight:
Free riding is killing our people. The idea that because enough people are not doing something which therefore justifies you not doing something as well is soooo interesting. The book makes a case against this, by explaining how these systems may take into account some free riders, but it cannot be a system that runs for free. Think of train fare evaders, tax evaders, people who don't recycle. The book also makes a case for the moral implications to justifying your inactivity based on the fact that others are similarly inactive, and how this mindset encourages moral decay, under the guise of rational economic thinking. I really liked this. The idea that someone will so you don't have to has really far reaching implications that extend further than economic debates on efficiency.
The book related things back to the layman, but sometimes became pretty dense in theory. That was really the only downside. I really liked it regardless.
January 8, 2021
Excellent Read for having more clarity about contemporary economics and its flawed implications. This book will allow readers to understand the pitfall of modern ecoonmics in discourse and everyday life when we are blinded by shortsighted perspectives. We often fail to reckon the limitation of economic theories; and even make bad deicison by being too reliant on faulty economic premises. I think this book has provided a very strong criticism of neoliberal ideas.
Really loved how different cognitive bias i.e. free-riders, prisoneers dillema and game thoery are explained. Worth my time.
Really loved how different cognitive bias i.e. free-riders, prisoneers dillema and game thoery are explained. Worth my time.
January 17, 2021
v enjoyable read that gives good insights on what and how to re-evaluate many flawed assumptions of human behaviors rooted in neoliberalism
December 22, 2022
One of the best books I've read on the topic
October 24, 2022
"It is true that pernicious economic ideas have become deeply embedded into everyday thinking, but...this transformation is relatively recent. Escape from the influence of subtle taken-from-granted ideas may seem impossible at times, yet another way of seeing the world lies within living memory. And we have more power than we often imagine. The economy is the sum of the choices and activities of billions of people. Its future is in our hands. We can decide the kind of economy we want."
Jonathan Aldred
Jonathan Aldred
March 10, 2022
This book changed some of my perspectives on the economy and taxation. One vivid example is how increases in taxation may not cause rich people to leave the country. I used to believe this is the case. However, in reality, there are simply too many factors to consider before leaving the country you grew up in. A place where you feel belonged. Friends and families are not part of the taxation equation and this is the essence of this book. The study of Economics does not reflect reality.
This entire review has been hidden because of spoilers.
August 31, 2021
This was not as interesting as I had hoped. It perhaps might have been better titled "Why Hayek and the neoliberals are wrong" as this might have better fitted the content. As a critique on neoliberal economic theories it is fine, if rather one-sided and slight, but it is not anything more than this.
December 26, 2021
So basically economics were thought up by men who didn't have a close grip on reality, theory doesn't have much to do with practice and rules were made by the rich for the rich. You might find some interesting stories and views into the minds and personalities that shaped economics as we know it today, but I think the essential story was nothing new.
January 7, 2021
While the book has some good points , However I completely disagree with the view that free market economics leads to inequality, it is a invaluable arguments results illustrates that Free Economics does increase equality than inequality.
October 12, 2023
This is such a good book. In it he gives the back story to many of the ideas that have both dominated economic thinking and justify its world view – a world view that glorifies selfishness, greed and ‘freakonomics’. What is particularly interesting here is how often the popular versions of the ideas that are used by economics to justify the worst of human behaviours end up being based on ideas that either sought to prove the opposite or that have been so badly ripped from their original context as to be almost meaningless.
Take game theory. Everyone knows the prisoners’ dilemma, and as the author explains, everyone knows it because it is a good story – which is how it started life. The problem is that game theory only works for zero sum games, and these are not all games, not the sorts of games any of us would generally recognise or play over a beer on a Friday night. In fact, these games are much more likely to be played not with friends but with enemies. A large point of this book can be summed up in that distinction. Economics normalises the kinds of behaviours we would otherwise reserve for enemies to the point where these become the only acceptable and rational behaviours. And then treats as pathetic any behaviour we would normally display to friends or even non-threatening strangers. As he says at one point, economists make the weather by their theories that we are all arseholes, they create an environment where being an arsehole is expected – and so many of us live down to their expectations.
The problem is that many of the arguments of economists prove to be really pretty hopeless. This never really bothered the economists for a long time, because they could say things like, ‘even if our models are grossly simplified versions of human behaviour, if they make accurate predictions, that’s all that matters’. This is similar to the ‘big data’ argument that is I can make money out of finding correlations, causation is irrelevant.
An interesting aspect of this book is how the author provides something of a biography to many of the economists he discusses. They would likely not be impressed with this, since they see their ‘science’ as being positive and rational – but I have to say, I didn’t come away from reading any of these biographies wanting to add them to an imagined list of dinner party guests. In fact, some of them sounded terrifying.
Some of the arguments here are well known – like the Israeli kindergarten that sought to charge fees for collecting your kids late, but found that only made matters worse. People hate being manipulated and also hate having social obligations changed into financial incentives. The part of this where he reminds us that ‘incentive’ wasn’t always the value neutral term it seems to be today – but rather meant giving people rewards for doing what they certainly wouldn’t otherwise do – really does need to come back into popular usage.
He also discusses something that Australia’s ex-Prime Minister used to say all of the time about climate change. That is, that Australia contributes so little to the world’s production of greenhouse gases that we could stop producing any, and end up with no economy, and it would make no difference at all to climate change. This is defined in the book as the free rider problem. But it misses the point. If Australia did more to address climate change it would make it morally difficult for other countries to not also do more. By doing so little we make it easier for other countries to do nothing too. This argument could also be used by people like me to not pay taxes, and with more justification – the very little of the collective pool that my taxes add is barely worth noticing. Strangely, not even an economist seems to make that argument.
Behavioural economics doesn’t come out of this particularly well either. While it is clearly a step up from homo economicus, it is only just that. Essentially, behavioural economics is presented as a series of hacks to make homo economicus slightly more realistic. But as he says, it begins with a deep disrespect for people – you know, the ‘predictably irrational’ – and this disrespect leads to a world where ‘decision architectures’ are created by people to get us to respond in ways economics models predict. That is, as selfish, greedy bastards. Thanks for your efforts, guys.
This is such a good book – and very accessible. Read it.
Take game theory. Everyone knows the prisoners’ dilemma, and as the author explains, everyone knows it because it is a good story – which is how it started life. The problem is that game theory only works for zero sum games, and these are not all games, not the sorts of games any of us would generally recognise or play over a beer on a Friday night. In fact, these games are much more likely to be played not with friends but with enemies. A large point of this book can be summed up in that distinction. Economics normalises the kinds of behaviours we would otherwise reserve for enemies to the point where these become the only acceptable and rational behaviours. And then treats as pathetic any behaviour we would normally display to friends or even non-threatening strangers. As he says at one point, economists make the weather by their theories that we are all arseholes, they create an environment where being an arsehole is expected – and so many of us live down to their expectations.
The problem is that many of the arguments of economists prove to be really pretty hopeless. This never really bothered the economists for a long time, because they could say things like, ‘even if our models are grossly simplified versions of human behaviour, if they make accurate predictions, that’s all that matters’. This is similar to the ‘big data’ argument that is I can make money out of finding correlations, causation is irrelevant.
An interesting aspect of this book is how the author provides something of a biography to many of the economists he discusses. They would likely not be impressed with this, since they see their ‘science’ as being positive and rational – but I have to say, I didn’t come away from reading any of these biographies wanting to add them to an imagined list of dinner party guests. In fact, some of them sounded terrifying.
Some of the arguments here are well known – like the Israeli kindergarten that sought to charge fees for collecting your kids late, but found that only made matters worse. People hate being manipulated and also hate having social obligations changed into financial incentives. The part of this where he reminds us that ‘incentive’ wasn’t always the value neutral term it seems to be today – but rather meant giving people rewards for doing what they certainly wouldn’t otherwise do – really does need to come back into popular usage.
He also discusses something that Australia’s ex-Prime Minister used to say all of the time about climate change. That is, that Australia contributes so little to the world’s production of greenhouse gases that we could stop producing any, and end up with no economy, and it would make no difference at all to climate change. This is defined in the book as the free rider problem. But it misses the point. If Australia did more to address climate change it would make it morally difficult for other countries to not also do more. By doing so little we make it easier for other countries to do nothing too. This argument could also be used by people like me to not pay taxes, and with more justification – the very little of the collective pool that my taxes add is barely worth noticing. Strangely, not even an economist seems to make that argument.
Behavioural economics doesn’t come out of this particularly well either. While it is clearly a step up from homo economicus, it is only just that. Essentially, behavioural economics is presented as a series of hacks to make homo economicus slightly more realistic. But as he says, it begins with a deep disrespect for people – you know, the ‘predictably irrational’ – and this disrespect leads to a world where ‘decision architectures’ are created by people to get us to respond in ways economics models predict. That is, as selfish, greedy bastards. Thanks for your efforts, guys.
This is such a good book – and very accessible. Read it.
November 29, 2020
A good summary of how economic ideas since the post-war consensus have changed our moral intuitions in ways that we might not have wanted or anticipated.
I had the following thoughts (though coming from someone whose profession uses economic ideas in a context where the author might argue they don't belong..)
Good points:
- Excellent introduction to some of the key players in economics and where these ideas have originated, including their original motivations and the motivations of those who took their ideas and ran with them to fulfil their own goals. I hadn't known so much of the life of e.g. Arrow or Ramsey, though I had come across their names attached to theorems or theories.
- I think this is a helpful corrective against economic thinking spilling over into other areas of life, and the need for economists to be humble comes through strongly. I think this will help me to weigh up different arguments about how people will behave with certain incentives put in place in a more balanced way, making sure that the theory does in fact match the reality, and greater consideration of the moral backing behind whether use of these incentives is justified.
- It's helpful to have it clearly spelt out that the changes around inequality and the shape of the economy over the last 30 years are not an inevitable consequence of the pursuit of economic growth, but deliberate choices by policy makers and thought leaders.
Less good things:
- At points, the most colourful figures (such as founders) are used to represent a whole field. This can be an exaggeration -those who come up with these ideas are inevitably extreme thinkers - you have to be slightly outside of the norm to come up with something new. But the implementation of these ideas often takes out the more extreme stuff to focus on which ideas are helpful in real life, softening an approach by using it alongside other tools.
- I think sometimes the analysis goes too far and might throw the baby out with the bathwater. At times it feels like even seeking an empirical approach to economics is wrong - but this ignores the advances that have been made from taking such an approach (accepting that in other circumstances bad actors have used this inappropriately).
- And sometimes it can feel like there's a dislike of science in general as a method to look at human behaviour or social scientific fields. I've got doubts about the influence and motivation of scientists myself, but using the scientific method in these areas has created knowledge in different areas. The more mathsy stuff in the book is also less focused and critical than the other sections.
I had the following thoughts (though coming from someone whose profession uses economic ideas in a context where the author might argue they don't belong..)
Good points:
- Excellent introduction to some of the key players in economics and where these ideas have originated, including their original motivations and the motivations of those who took their ideas and ran with them to fulfil their own goals. I hadn't known so much of the life of e.g. Arrow or Ramsey, though I had come across their names attached to theorems or theories.
- I think this is a helpful corrective against economic thinking spilling over into other areas of life, and the need for economists to be humble comes through strongly. I think this will help me to weigh up different arguments about how people will behave with certain incentives put in place in a more balanced way, making sure that the theory does in fact match the reality, and greater consideration of the moral backing behind whether use of these incentives is justified.
- It's helpful to have it clearly spelt out that the changes around inequality and the shape of the economy over the last 30 years are not an inevitable consequence of the pursuit of economic growth, but deliberate choices by policy makers and thought leaders.
Less good things:
- At points, the most colourful figures (such as founders) are used to represent a whole field. This can be an exaggeration -those who come up with these ideas are inevitably extreme thinkers - you have to be slightly outside of the norm to come up with something new. But the implementation of these ideas often takes out the more extreme stuff to focus on which ideas are helpful in real life, softening an approach by using it alongside other tools.
- I think sometimes the analysis goes too far and might throw the baby out with the bathwater. At times it feels like even seeking an empirical approach to economics is wrong - but this ignores the advances that have been made from taking such an approach (accepting that in other circumstances bad actors have used this inappropriately).
- And sometimes it can feel like there's a dislike of science in general as a method to look at human behaviour or social scientific fields. I've got doubts about the influence and motivation of scientists myself, but using the scientific method in these areas has created knowledge in different areas. The more mathsy stuff in the book is also less focused and critical than the other sections.
December 3, 2019
Đây là một quyển sách mình thấy được gợi ý bởi chị Jenny Tue Anh Nguyen – một người phụ nữ vô cùng giỏi đang làm việc tại Oxford. Với lại nó cũng được review bởi idol Ha-Joong Chang, tác giả quyển Economics thần thánh. Do đó, trong một lần tình cờ mình thấy nó ở một nhà sách ở Ý (đương nhiên là bằng tiếng Ý), mình đã đứng đọc nó suốt 2 tiếng. Tuy nhiên thì do vốn tiếng Ý ngâu si của mình nên phải cực kì chân thành cảm ơn sự cao thượng của bạn *Minh Nguyen* vì đã tài trợ mình ebook tiếng Anh cho quyển này, bạn dễ thương thì hôm nào cho mình ngó ké kho sách bạn với nhé, ahihi.
Vào vấn đề chính để review loại hàng khó nhai này cho mọi người. Về cơ bản thì quyển này khá khó chịu với những bạn không có các kiến thức cơ bản về kinh tế học nhưng mà nó sẽ kiểu siêu hay với những bạn nào đã có hơi hơi hiểu. Tác giả quyển này thì không cần bàn cãi, giám đốc nghiên cứu khoa Kinh tế, Emmanuel College Cambridge.
J. Aldred trong quyển này chủ yếu tập trung vào mô tả sự thay đổi của kinh tế học. Về cơ bản, nó chỉ ra rằng các quan điểm được coi là sai trái ở thời cụ kị của chúng ta thì hiện giờ nó lại là sự thật hiển nhiên. Không phải các cụ sai mà là thời đại thay đổi thôi. Kinh tế học cũng vậy. Trước đây, các nhà kinh tế học luôn cho rằng do bản chất tham lam của con người, nên kinh tế học hoàn toàn có thể giải thích các hành vi của họ. Tuy nhiên, Aldred chỉ ra các sự kiện lớn mà kiểu “má ơi sao có thể??!!!” như cuộc khủng hoảng tài chính 2008, hay cuộc trưng cầu dân ý về Brexit và cuộc bầu cử Donald Trump năm 2016. Nó cho thấy rằng, không không không, kinh tế học sắp tàn rồi, vì con người làm gì hoạt động theo mấy cái lý thuyết cổ điển mà chúng ta cứ nhai đi nhai lại còn hơn bò nhai cỏ. Do đó, Aldred nhắc tới các vấn đề khác có thể chi phối hành vi của con người, ví dụ như các vấn đề về đạo đức (mình cũng chả chắc là vụ Brexit là đạo đức hay là vì Anh Quốc chủ quan, thôi thì cứ nhìn nó là đạo đức đi).
Nói chung là quyển này chủ yếu phân tích các thay đổi của thời đại mới và các triết lý kinh tế mới. Người đọc quyển này chắc cũng cần có các kiến thức kinh tế học ở mức khá khá, không thì đọc xong có khi ngu cả người. Sách đề cập nhiều đến những lý thuyết như classical theories của Adam Smith, capitalism, neoliberalism, v.v
Vào vấn đề chính để review loại hàng khó nhai này cho mọi người. Về cơ bản thì quyển này khá khó chịu với những bạn không có các kiến thức cơ bản về kinh tế học nhưng mà nó sẽ kiểu siêu hay với những bạn nào đã có hơi hơi hiểu. Tác giả quyển này thì không cần bàn cãi, giám đốc nghiên cứu khoa Kinh tế, Emmanuel College Cambridge.
J. Aldred trong quyển này chủ yếu tập trung vào mô tả sự thay đổi của kinh tế học. Về cơ bản, nó chỉ ra rằng các quan điểm được coi là sai trái ở thời cụ kị của chúng ta thì hiện giờ nó lại là sự thật hiển nhiên. Không phải các cụ sai mà là thời đại thay đổi thôi. Kinh tế học cũng vậy. Trước đây, các nhà kinh tế học luôn cho rằng do bản chất tham lam của con người, nên kinh tế học hoàn toàn có thể giải thích các hành vi của họ. Tuy nhiên, Aldred chỉ ra các sự kiện lớn mà kiểu “má ơi sao có thể??!!!” như cuộc khủng hoảng tài chính 2008, hay cuộc trưng cầu dân ý về Brexit và cuộc bầu cử Donald Trump năm 2016. Nó cho thấy rằng, không không không, kinh tế học sắp tàn rồi, vì con người làm gì hoạt động theo mấy cái lý thuyết cổ điển mà chúng ta cứ nhai đi nhai lại còn hơn bò nhai cỏ. Do đó, Aldred nhắc tới các vấn đề khác có thể chi phối hành vi của con người, ví dụ như các vấn đề về đạo đức (mình cũng chả chắc là vụ Brexit là đạo đức hay là vì Anh Quốc chủ quan, thôi thì cứ nhìn nó là đạo đức đi).
Nói chung là quyển này chủ yếu phân tích các thay đổi của thời đại mới và các triết lý kinh tế mới. Người đọc quyển này chắc cũng cần có các kiến thức kinh tế học ở mức khá khá, không thì đọc xong có khi ngu cả người. Sách đề cập nhiều đến những lý thuyết như classical theories của Adam Smith, capitalism, neoliberalism, v.v
July 5, 2020
I gave up on this book a couple of times. Shelved under DNF ("did not finish"). But my mind would keep going back to it, thinking about the things it brought up, and I couldn't help but want to read more. So I'd fish it back from my DNF bin and push on. I was rewarded with a better understanding of what the author was getting at, and a new way of looking at the world.
So, let me first talk a little about the reason why I thought this belonged to the DNF bin. I felt that the author wasn't particularly clear on what he was trying to get at. It felt like a general attack on loosely related ideas that he lumped together as "economic thought", from a hodgepodge of people whom I had not myself considered economists. It felt a little like the author assembled all these people and ideas to have an "antagonist" against which he could attack, and that he was hugely overstating the amount of influence any one of these individuals could have had. By the end of the book, I don't think he really changed my impression of the earlier chapters.
Still, it couldn't have been that terrible because I found myself constantly going back to the book and wondering what else he had to say. I found the later chapters really good, especially Chapter 7, which I highlighted like crazy. Here's a gem early in the chapter, when talking about how "economic thinking" has led to using pricing as policy:
Overall, a poor book at the start but one that ends strongly, with plenty of mind-changing material.
So, let me first talk a little about the reason why I thought this belonged to the DNF bin. I felt that the author wasn't particularly clear on what he was trying to get at. It felt like a general attack on loosely related ideas that he lumped together as "economic thought", from a hodgepodge of people whom I had not myself considered economists. It felt a little like the author assembled all these people and ideas to have an "antagonist" against which he could attack, and that he was hugely overstating the amount of influence any one of these individuals could have had. By the end of the book, I don't think he really changed my impression of the earlier chapters.
Still, it couldn't have been that terrible because I found myself constantly going back to the book and wondering what else he had to say. I found the later chapters really good, especially Chapter 7, which I highlighted like crazy. Here's a gem early in the chapter, when talking about how "economic thinking" has led to using pricing as policy:
Since I can be predictably manipulated by incentives, it cannot be said that my decisions depend only 'on myself, not on external factors'. Nor am I 'self-directed'. Incentive schemes, then, might work just as intended by their designers, with no crowding out -- but still be morally wrong because they conflict with our values of liberty and autonomy... When a judge is offered and accepts a financial incentive to let a guilty person go free, this is bribery, and is obviously harmful. That both the briber and the judge might be better off is irrelevant.
Overall, a poor book at the start but one that ends strongly, with plenty of mind-changing material.
May 25, 2025
Brilliant book. Aldred lands some heavy punches on neoliberal economists and the modern economy.
The first few chapters set the tone very well, effectively arguing that the assumptions Hayek and Milton Friedman based their ideas on were slightly misunderstood. Aldred highlights things like Coase’s theorem and the idea that free market transactions are smooth and costless, showing these assumptions often don’t hold in real life.
As the book goes on, it becomes clear that replacing ethical judgements with pure mathematics has actually detached economics from the real world. In trying to be more scientific and less speculative, the field has arguably become more disconnected and overly confident. That’s one reason why the bold, mathematical predictions leading up to the 2008 crash turned out to be so wrong.
My favourite chapter was Chapter 5, called ‘Free Riding’. It does a great job of showing how collaborative action, rather than selfish individualism, can be powerful and effective. It challenges the usual economic idea that people always act purely in their own self-interest.
By the end of the book, Aldred draws a really strong thread from the Cold War origins of the Prisoner’s Dilemma through to the rise of free market theory and deregulation, and eventually to today’s growing economic inequality.
It’s hard to neatly review this book because it covers so much ground and explains big ideas in a really accessible way. But it’s a fantastic read if you’re interested in how economics got to where it is, and how it could be better.
The first few chapters set the tone very well, effectively arguing that the assumptions Hayek and Milton Friedman based their ideas on were slightly misunderstood. Aldred highlights things like Coase’s theorem and the idea that free market transactions are smooth and costless, showing these assumptions often don’t hold in real life.
As the book goes on, it becomes clear that replacing ethical judgements with pure mathematics has actually detached economics from the real world. In trying to be more scientific and less speculative, the field has arguably become more disconnected and overly confident. That’s one reason why the bold, mathematical predictions leading up to the 2008 crash turned out to be so wrong.
My favourite chapter was Chapter 5, called ‘Free Riding’. It does a great job of showing how collaborative action, rather than selfish individualism, can be powerful and effective. It challenges the usual economic idea that people always act purely in their own self-interest.
By the end of the book, Aldred draws a really strong thread from the Cold War origins of the Prisoner’s Dilemma through to the rise of free market theory and deregulation, and eventually to today’s growing economic inequality.
It’s hard to neatly review this book because it covers so much ground and explains big ideas in a really accessible way. But it’s a fantastic read if you’re interested in how economics got to where it is, and how it could be better.
May 9, 2021
A critique of modern economic theory. Essentially, economics started as a theory of how humans behaved using models, all of which were based on assumptions, the most basic of which was homo economicus, the rational human being. However, through the years, the economic theories based on models become accepted as truth and were used to form government policy. The book argues that economists should communicate their theories and models more clearly, including stating the assumptions and limitations behind them. They should also stop pretending that economics is a precise science, that not everything can be reduced to a single number, either in terms of dollar value or probabilities, because often in the real world information is incomplete. More importantly, economists should shake off their hubris, and recognise that economics is an imprecise social science, instead of trying to solve social issues with economics used as an engineering solution.
September 13, 2019
Book was just hard for me to follow. There was no roadmap to follow and it was not clear where the author was trying to take me nor what he was trying to convey. I may have been able to understand individual examples but I continually failed to place them into the larger context. In addition to that, there seems to be an overly large (in my opinion) emphasis on the role that individual economic theorists have played in the development of the economy as it stands today.
I was not able to understand enough to determine whether the author was retroactively assigning the blame for economic events that are happening in the present to economists that have created theorems in the past. I personally fail to see how there is any correlation, as our actions remain our own, and the text unfortunately does not seem to shed any light on the matter.
I was not able to understand enough to determine whether the author was retroactively assigning the blame for economic events that are happening in the present to economists that have created theorems in the past. I personally fail to see how there is any correlation, as our actions remain our own, and the text unfortunately does not seem to shed any light on the matter.
November 9, 2023
Макар авторът да се е постарал да представи информацията по-възможно най-достъпния и разбираем начин, на моменти идваше твърде сложно и объркващо написаното. Някои изречения ги четох по два-три пъти и пак мозъкът ми не успяваше да ги разбере.
Това настрана, книгата е интересна история на икономиката, показваща как каквото е можело да се обърка щом става дума за икономика - се е объркало. Любопитно е да видиш как на база грешни предположения, са се изградили основните принципи, които правителства и финансови организации използват да функционират. Направо си е плашещо.
Та, интересна е книгата, но ме загуби за каузата си към края като почва да проповядва, че високите данъци са хубаво нещо. Мне, благодаря. И сегашните данъци са много, визирайки какви правителства ни управляват и чии интереси защитават.
Това настрана, книгата е интересна история на икономиката, показваща как каквото е можело да се обърка щом става дума за икономика - се е объркало. Любопитно е да видиш как на база грешни предположения, са се изградили основните принципи, които правителства и финансови организации използват да функционират. Направо си е плашещо.
Та, интересна е книгата, но ме загуби за каузата си към края като почва да проповядва, че високите данъци са хубаво нещо. Мне, благодаря. И сегашните данъци са много, визирайки какви правителства ни управляват и чии интереси защитават.
November 2, 2020
This book’s greatest strength is also it’s greatest weakness: the ability to tell stories. Sometimes the line between the argument and the story is quite blurred so I couldn’t really get the point behind some of them. Also, like a lot of economics works, this book could’ve benefitted from more definitions (especially because it seems like it’s targeted at non-economists) of the terms, e.g. crowding out. The most brilliant part of the book has got to be the second last chapter where he so brilliantly pulls all the theories he’s explored together. I don’t agree with everything he says and it was a new way of seeing things where I had the capacity to understand.
September 16, 2024
This book critically examines how free-market economic ideas have shaped not only policies but also the way we think. In recent decades, theories like game theory, public choice theory, and free-rider thinking have encouraged a crudely selfish view of the world. Aldred argues that these concepts, often presented as objective truths, have normalized harmful behaviours and undermined collective responsibility. Through engaging examples, the book urges us to reconsider the influence of economists who disguise damaging opinions as facts. It is a thought-provoking read that challenges the status quo of economic thought.
July 15, 2022
really terrible book
Trying to tell you the fakeness has flaw..but actually some fakeness can be politically incorrect which go against what you believe!
又是中文譯超差的一本⋯譯者還是林語堂文學翻譯獎…真的是wtf!
簡單說
作者Johnathan 要把邏輯性和非邏輯性（現實）去解答現實中的不公平…
不要和我説賽局⋯因為不存在！
我看法：背後不是那隻手…是整個世界被控制假真理讓大家去認為這些書很付合邏輯…我笑死了⋯
大家從出生就在謊言中⋯⋯
不看也不是…給你以為有希望…兔子洞用光一照，其實黑暗都不行…作者也不方便說⋯。只能表面功夫⋯
目錄
第1章 未來事物的形態
第2章 不信任何人
第3章 財富擊敗正義：奇怪的寇斯定理
第4章 政府這敵人
第5章 搭便車，或不盡自己的一份力
第6章 經濟萬有理論
第7章 人人都有一個價
第8章 信賴數字
第9章 你得到的是你應得的
第10章 現代經濟學與我們的棘手關係
Trying to tell you the fakeness has flaw..but actually some fakeness can be politically incorrect which go against what you believe!
又是中文譯超差的一本⋯譯者還是林語堂文學翻譯獎…真的是wtf!
簡單說
作者Johnathan 要把邏輯性和非邏輯性（現實）去解答現實中的不公平…
不要和我説賽局⋯因為不存在！
我看法：背後不是那隻手…是整個世界被控制假真理讓大家去認為這些書很付合邏輯…我笑死了⋯
大家從出生就在謊言中⋯⋯
不看也不是…給你以為有希望…兔子洞用光一照，其實黑暗都不行…作者也不方便說⋯。只能表面功夫⋯
目錄
第1章 未來事物的形態
第2章 不信任何人
第3章 財富擊敗正義：奇怪的寇斯定理
第4章 政府這敵人
第5章 搭便車，或不盡自己的一份力
第6章 經濟萬有理論
第7章 人人都有一個價
第8章 信賴數字
第9章 你得到的是你應得的
第10章 現代經濟學與我們的棘手關係
July 31, 2020
Overly simplistic explanation of economic theories that assumes all economists are the same, despite the differences among economists that he himself outlines in the book. He sets up a straw man designed to be torn down. Economics is complex because it is about people and the tools of economics are designed to allow for scenario building and thinking through scenarios. Hence the joke that economists always say ‘on the one hand and on the other hand’.
October 19, 2020
Hugely enjoyable and important book. As an Economist, it’s probably my favourite piece for much needed “self-reflection” by the profession. Would deem it recommended reading for every Economics graduate that is set to continue working in the field. Puts important empirical and (vitally) political context to what we are taught at university - and often taught as though some neutral science/as separate from politics and moral value judgements.
Read
January 7, 2021In recent decades, a whole set of economic ideas, often supporting the free market, have come to be hugely influential on how we make policies, and even on how we think. Ideas like game theory, public choice theory, and free-rider thinking have all combined to make a crudely selfish view of the world seem like the norm. It’s time we paid much less attention to those economists who try to dress their damaging opinions up as facts.
Displaying 1 - 30 of 47 reviews