How Economics Can Save the World: Simple Ideas to Solve Our Biggest Problems

by Erik Angner

Economics has the power to make the world a better, happier and safer this book shows you how Our world is in a mess. The challenges of climate change, inequality, hunger and a global pandemic mean our way of life seems more imperilled and society more divided than ever; but economics can help! From parenting to organ donation, housing to anti-social behaviour, economics provides the tools we need to fix the biggest issues of today. Far from being a means to predict the stock market, enrich the elite or track money around the globe, economics provides a lens through which we can better understand how things work, design clever solutions and create the conditions in which we can all flourish. With a healthy dose of optimism, and packed with stories of economics in everyday situations, Erik Angner demonstrates the methods he and his fellow economists use to help improve our lives and the society in which we live. He shows us that economics can be a powerful force for good, awakening the possibility of a happier, more just and more sustainable world.

Genres: Economics, Nonfiction, Business, Psychology, Society

277 pages, Kindle Edition

First published January 1, 2023

About the author

Erik is a philosopher and economist based at Stockholm University. As a result of mission creep, he has two PhD's, one in philosophy and one in economics – both from the University of Pittsburgh. He is author, most recently, of How Economics Can Save the World: Simple Ideas to Solve Our Biggest Problems. He lives in Stockholm with his wife and their three children.

Reviews

[Daniel · Rating 5 out of 5]

1. How to eliminate poverty: give money to the poor. Really, they won’t misspend it.
2. How to raise happy children and remain sane: stop worrying, treat them with kindness and respect, and realise that your efforts don’t matter too much.
3. How to fix climate change: carbon taxes
4. How to change bad behaviour: change social norms by telling them publicly, and make lots of people change at the same time
5. How to give people what they want: trading platform for kidney donation
6. How to be happy: earn enough money just above the median household income, then buy experience not stuff, be content, make society more equal
7. How to be humble: confront your predictions with feedback, think why you can be wrong
8. How to get rich, save and invest in index linked funds, improve your financial literacy
9. How to build community: set up institutions to get better Nash equilibriums to avoid tragedy of the commons, set rules, monitor behaviour and enforce rules

[Heather Hoyt · Rating 4 out of 5]

This book was written for a general audience, and would not be a bad introduction into economics (particularly if you don't care about the math and models and more want practical examples). It was accessible and mostly interesting. Many of the chapters simply summarized the work of a top economist. While some of the points seemed too obvious to me, there were some chapters (4, 5, 9) that were more enlightening.

Summary:

Introduction: explains economics, and brings up Pigou (economics is improvement of human welfare), Hayek (intense urge to reconstruct a world which gives rise to profound dissatisfaction), Marshall (a study of mankind in the ordinary business of life), Robbins (economics is study of human behavior as a relationship between ends and scarce means).
1. How to Eliminate Poverty: Poor people aren't any different from anyone else except they are poor. So give poor people money. Also mentions scarcity mindsets, and analytical egalitarianism (people are the same).
2. How to Raise Happy Children: I found this chapter unhelpful and even disagreed with some of it strongly. Uses the work of Emily Oster and Bryan Caplan.
3. How to Fix Climate Change: Carbon tax.
4. How to Change Bad Behavior: Summarizes Cristina Bicchieri's work on on social norms.
5. How to Give People What They Need: Alvin A. Roth/market design (and markets can work with information, not just money). My favorite chapter.
6. How to Be Happy: Money has diminishing returns. You adapt to comforts quickly--but not to pleasures. Keep your aspirations and expectations in check. Don't compare yourself to other people.
7. How to Be Humble: Dunning-Kruger effect. All people overestimate their abilities. Try to keep boundaries on what you are actually good at, seek out other viewpoints and reasons we are wrong, and make clear, falsifiable judgments.
8. How to Get Rich: Index funds, basic financial literacy, no get-rich-quick schemes.
9. How to Build Community: Elinor Ostrom on institutions.
Conclusion: Basically the same things as parts of Diane Coyle's Cogs and Monsters, which I just read. People don't know what economics is actually about since economists aren't great about talking about what they are doing in an accessible way. And values are important.

[A. Heller · Rating 2 out of 5]

I'm a firm believer in the virtues of the "economic way of thinking", so I went into this book with high expectations. Unfortunately, it ended up being a massive disappointment.

In places, Angner oversimplifies the relevant topics to an absurd degree. For example, his chapter on how to fix climate change offers a completely lopsided defense of carbon taxes. It doesn't examine any potential drawbacks whatsoever, doesn't investigate whether fossil fuels have any benefits, and so on. Part of the economic way of thinking is to always look at OVERALL costs and benefits. Angner here fails to consistently apply the way of thinking he otherwise valorizes.

In other places he fails to discuss economic literature that is clearly relevant to making the world a better place. His chapter on how to eliminate poverty offers a spirited defense of things like unconditional cash transfers (plus some lengthy, simplistic discussion of egalitarianism). And yes, there is some evidence that such cash transfers can be effective. But this is to put the cart before the horse. He has NOTHING to say about what creates wealth in the first place, despite this being of utmost importance for those who want to do something about poverty. Those looking for some insight into what economists have to say about the preconditions for economic growth will be disappointed (and, if you're like me, thoroughly baffled by the omission).

Other chapters are not as bad, but can't reasonably be characterized as discussing anything that can save the world. The chapter on "How to Get Rich" offers some sound advice, but nothing you can't get in dozens of other places and certainly nothing original to Angner. The chapter on "How to Change Bad Behavior" fails to grapple with the inherent difficulties of actually changing the norms that prevail in a society (as does so much of that literature, to be fair to Angner).

Another annoying feature of this book is his over-broad definition of "economics" where virtually anything can count as economics. The opening chapter exhibits a mildly annoying, punchy writing style that is common in pop science books. But it mostly amounts to stuff like: "are you trying to solve a problem? That's economics!" This expanded definition of economics rears its head elsewhere. His chapter on how to raise happy children draws heavily upon the work of Bryan Caplan. And to be sure, Caplan is an excellent economist. But as Angner himself admits, Caplan draws heavily from the literature in behavioral genetics, not necessarily economics. (Should we be talking about how acquaintance with behavioral genetics can save the world instead?)

Overall, I would not recommend this book to someone who wanted to learn more about economics. It makes too many mistakes to be genuinely helpfully informative.

[Jocelyn · Rating 4 out of 5]

This could well be Econ 101 or how economics should be introduced in school. While answers to the how-to’s are interesting, the author spent half the time justifying economics as a useful discipline and why we should take real economist’s seriously. Apparently there are many not so great self proclaimed economists in the market.

This book is published in 2023. It seems like in the past decade or so, econ has evolved into a more scientific and evident based approach (as opposed to theoretical). I like that it always offers practical and actionable solutions to the world’s problems. It may not be a perfect solution but it is better than not having a solution at all.

[V Lan · Rating 4 out of 5]

buddy read with my dad. happy to report we have unlocked many new convo topics 🙈

mark carney’s values up next stay tuned

[Jone · Rating 3 out of 5]

Passande som introduktion till ekonomi överlag och vad nationalekonomer kan bidra med för samhället.

Det underliggande motivet är mest att slå hål på myter om nationalekonomi som dogmatisk pseudovetenskap, även om det som med allt annat finns undantag som inte representerar (eller åtminstone inte BÖR representera) hela forskningsfältet.

Vad kan nationalekonomi, med rätt värderingar, åstadkomma?

[Lieselwiesel · Rating 4 out of 5]

some ideas are more trivial than others, but definitely a good introduction into the economic perspective on pressing challenges (especially if you’ve never been in contact with the economic science at all, otherwise some topics seem very basic). liked it!

[Kyle · Rating 4 out of 5]

“Individuals are part of a dense network of market and non-market relations. Their behaviors, beliefs, and attitudes reflect the fact that they live in a richly textured, polycentric society. In a polycentric society, people are dependent in all sorts of ways. And it’s ultimately the network of social institutions that gets people out of the social dilemmas that imprison narrowly rational, short-sighted, and selfish agents.” (pp. 212-213)

i really liked how the book gave a taste of the practical applications of economics while also giving a bit of a taste of several key economic concepts and theories such as randomized controlled trials and game theory. i especially liked the chapters on how the prevalent issue of overconfidence, concerning financial illiteracy, and tragedy of the commons can all be viewed and addressed in an economic lens

i think that this book is a good introduction to how economics can be applied as it’s framed in a way to justify the role that economics has and defends its use as an effective tool. the balance between the science and theoretical aspects of economics was handled well in this book but the justifications felt unnecessary at some points - i would’ve preferred if it simply delved deeper into the theories and applications, letting them speak for themselves and leaving it up to readers’ own processing

particularly, ostrom’s 8 design principles and polycentric vision were the most striking for me, apart from the section on financial literacy. i enjoyed the way how these concepts were discussed with a clear and well-presented problem, fleshed out through the lens of game theory and the scarcity brought out by the tragedy of the commons

very good book that has some interesting insights and covers a vast variety of intriguing topics ranging from carbon tax, parenting, overconfidence, financial literacy, poverty, happiness, and systems - whether within specific industries, communities, or scenarios

[Anderson De castro · Rating 3 out of 5]

Um livro leve, interesse e que aguça a curiosidade na mesma medida em que mostra soluções simples e criativas de economistas e da Ciência Econômica para problemas de políticas públicas e também para problemas relacionados a hábitos, decisões e comportamentos.

É uma leitura leve e como disse o próprio autor, um livro para inspirar e conduzir leitores ao mundo instigante, prático e criativo que a economia se transformou nos últimos anos.

[Carolina Pinto · Rating 5 out of 5]

Este livro fez-me querer tirar uma licenciatura em economia

[Solomon Anthony · Rating 3 out of 5]

My notes:-

- Economics: The study of individual choice under scarcity, and how those choices brings consequences to society.
- How it can change the world, show it as how it is and the process to improve decisions and behaviour.
- Scarcity, how the lack of the matter (money, time, benefits, disadvantages) affects one to react, behave or choose wisely according to the situation to elicit a potential beneficial outcome.
- Mindset / framework: interesting point of view on how adopting economist mindset helps see the world from a different yet influential perspective.
- Mechanical: where how A affects B and the grander scheme.

Examples on how economics can shape the world
1. Elevate poverty
2. How to raise happy children
3. Fixing climate change
4. Changing a bad behaviour
5. How to give people what they need
6. How to be happy
7. Being humble
8. How to get rich
- Save when I can, invest in index funds & not solely in individual stocks, borrow judiciously, improve my skills
9. How to create communities

What I like
- combination of socialism and capitalism.
- Open my eyes to see core and reason for economics is to make the world a better place, social improvements and for humans to flourish.
- How values can shape an economist mind.
- The importance to review data and how to make an informed decision.
- Evidence based, to look at the big picture and long haul.
- Provides a toolkit. How to design a thinking path to decide.
- Provides disclaimer that it’s not the entire solution, and why it fails.
- Suggests to combine with other methodology such as philosophy, morality (e.g. on social welfare rather than a sole focus on GDP).

Dislike
- Could have provided how these examples impact us as a whole. I felt he gave examples but lack of meaning to why and the impact.
- Not everything is mechanical, there are grey areas to consider. How can this work hand in hand? lack of diving in.

[Michael Ryan · Rating 1 out of 5]

I disagree with the author, I don't like this book, I think it is wrong. Well, strong words, I guess. He seems to be saying that economics is everything, and economics doesn't say anything. If so, then how can it help?

I had a discussion once a couple of years back with a woman who thought we should have a bin-based, flat-rate charge for rubbish services in our area. I preferred the current system where you paid an amount per-bag which covered the cost of the service. She felt that per-unit costing was hurting underprivileged, poor families with lots of children. I felt that people putting out more rubbish should pay more, and people putting out less rubbish should pay less. That this was fairer, and would encourage recycling etc.

Eric Angner says that utility is a personal thing, and what is good for me may not be good for you, economics doesn't care. So where are we then? And how is economics any use in that case?

By defining economics so broadly, so that every possible thought can be an economic thought, it becomes value-free and cannot be right or wrong. Well, I disagree. Economics is about the best use of money and not wasting money, isn't it? Or by proxy the best use of a scarce resource?

[Samuel A De La Paz · Rating 5 out of 5]

There's one thing more important than economics that's needed to save the world - will power to implement the findings of economists.

That said, this was a fun read that explored various ways to address world issues and introduce economic concepts. Angner also did justice explaining how economics as a field is not very accessible, or well understood by the public, and shares the ideas and research in a way that anyone can read. Some of my favorite chapters covered the economics of happiness, parenting, and designing community organizations.

[Neo · Rating 3 out of 5]

A great introduction to some basic economic ideas. However, the proposals often rest on neat, theoretical solutions — Pigouvian taxes, behavioral nudges, and incentive realignments — that assume rational, responsive systems, but the book largely ignores the real-world messiness of implementation: bureaucratic resistance, political inertia, voter irrationality, cultural pushback, and misinformation. Economics may offer elegant models, but Angner fails to address how those models collapse when they meet flawed human institutions.

[Jessica]

Fantastic read - introduced me to some new concepts from economics and how they can be applied to problems like poverty, climate change, etc. The writing is super easy to follow and it felt like having a conversation with a much more knowledgeable friend -- approachable and interesting. If you're looking for an elevated version of Freakonomics but with a bit more depth on each topic, this is a great read!

[Stuart Trow · Rating 2 out of 5]

Interesting, but two fatal flaws. First is conflating micro for macro (the poor misunderstood economist lark). None of the substantive problems with celebrated Nobels are even discussed (e.g. Becker, Nordhaus), nor the influence of central bank PhDs. Spoiler alert: conclusion is essentially that non-economists wouldn’t understand, which felt insultingly unsatisfactory.

[sierra conley · Rating 3 out of 5]

3.5ish
This gave me a lot to think about and I think I did learn a good bit. The only issue is that most of the book was just the author saying that everyone hates economists and that you probably shouldn't which I found to be kind of annoying. It also mostly just referenced other economist's works instead of him talking about his own research.

[Celia · Rating 5 out of 5]

Inspiration for how we can make the world a better place - what's not to like? Erik Angner writes a funny, accessible and actionable book filled with original ideas and optimism. Read now if you want to switch your perspective and start thinking in new ways

[Armen Shirvanian]

My interview with Professor Erik Angner on "How Economics Can Save the World" for The Armen Show:

http://www.armenshirvanian.com/podcas...

[Emma · Rating 4 out of 5]

Inspiroiva katsaus siihen miten taloustiede voi muuttaa maailmaa paremmaksi. Ehkä vähän vedetty mutkia suoriksi, mut toisaalta koko kirjan pointti on tuoda taloustiedettä tieteenalana lähestyttävämmäksi joten ymmärrettävää.

[Sahil Agarwal · Rating 3 out of 5]

A good introduction to Economics, gives simple answers to complex questions which won't agree with everyone but still explains quite well what Economics is supposed to be and how Economists are supposed to help.

[karim Jebari · Rating 3 out of 5]

I think this is a great book for someone who is interested in economics, but is unsure what it can be used for.

[Lianne Kulik · Rating 4 out of 5]

Econiful Fall Book Club 2023. Optimistic, very little jargon, and a good read for humanizing the “dismal science.”

[Phlippydroid · Rating 3 out of 5]

Might be a recommendation to someone with an early interest in national economics, and how it can be useful. A tad verbose. I ended up doing more skimming than reading.

[sislasus · Rating 3 out of 5]

Ok läsning, men hade förväntat mig mer om nationalekonomernas lösningar på klimatkris, fattigdom och svält.

[Adam · Rating 3 out of 5]

Fine.

[STEPHEN HADFIELD · Rating 3 out of 5]

unfortunately i found this hard to get into. he seemed to say the same thing several times

[Mike · Rating 4 out of 5]

An excellent 'next book' after Freakonomics or the like.

[Rohan Monteiro · Rating 4 out of 5]

I love the premise. and the solutions

[Nikita Nautiyal · Rating 3 out of 5]

3.5