Knowing and Making

John Kay's new book Obliquity: Why our goals are best achieved indirectly  (whose launch at the IPA was hosted last night by Rory Sutherland) follows in the tradition of a number of recent books about decision-making and rationality. Indeed, he mentions Predictably Irrational  and Blink in the first ten pages. It goes beyond them in a couple of interesting ways, but leaves some questions - perhaps deliberately - unanswered. One of my favourite books on business is also by John Kay:  The Hare and the Tortoise: An Informal Guide to Business Strategy . I'd recommend it to anyone involved in guiding the strategy of their firm. You need only read a few pages to appreciate the wisdom and insight of the author, and so I have been looking forward to reading this new book. Kay's definition of obliquity can be summarised as: Aim for diverse goals other than your direct objective. The companies that make the most money are not those whose primary goal is to make money. Accep...

Today I'm in Hay-on-Wye , a small town buried miles from anywhere on the Welsh-English border, with the highest number of bookshops per inhabitant of anywhere in Britain and probably the world. Can this possibly be an economically stable situation? Today, a mild springtime Saturday, there are plenty of visitors - and I'm sure they will all spend some money in several shops. But is this really enough to make a living? There are several characteristics which probably make this local economy more sustainable than one would expect: Books, especially second-hand books, are not commodities - for most books here, there's probably just a single copy in one shop. This reduces the competition between shops and allows them to maintain greater margins. There's an annual festival where 80,000 people come here and the bookshops - and everyone else in town - makes an absolute fortune. The existence of the bookshops the rest of the year strengthens the credibility of the festi...

Tyler Cowen was prompted by a reader question to offer his ten most influential books . He challenged other bloggers to do the same, so here are mine (as for Tyler, this is my "gut list" though informed by a pleasant half hour looking through my bookshelves to prompt my memory). It surprises me how few economics books are here - but then I didn't do much formal economics study at the time of life that one chooses influential books: Easily at the top of the list is Douglas Hofstadter, Gödel, Escher, Bach - An Eternal Golden Braid . The first book that started me exploring the mysteries of cognition and consciousness - and a book of such beauty, grace and depth that my life's work would be complete if I could write anything like it. Most of his other books are excellent too. Christopher Alexander,  A Pattern Language . Gives another insight into where abstract patterns can be found in the world - this time in the architecture of cities, buildings and rooms. Steve McC...

My review of two books - The Ascent of Money and A Splendid Exchange - is up at Culture Wars today - Ascent and Exchange . Do go and read it on Culture Wars, but I'll post the text here as well after the weekend. A couple of excerpts: When they set out to write these texts, neither author must have expected to create an especially political book. But for the first time in decades, opinions about the detailed management of the economy are intensely political, and any book, article or quotation on financial matters in the last few years is likely to be re-read in that light. Bernstein’s other argument is a little more controversial, and therefore more interesting. He portrays nearly every major development in world history as the result of trade, competition over trade profits, or protection against trade. Early chapters cover the expansion of Islam across the Middle East, North Africa and South Asia; the middle of the book explores European exploration and colonisation of key loca...

I've just finished Steven Landsburg's book, More Sex is Safer Sex . I guess I had been led into an expectation of what popular economics books are like, by Freakonomics and by Tim Harford's two recent books, The Undercover Economist and The Logic of Life . And my expectations may not be a good basis on which to judge a book. Still, I suspect many readers may have a similar measuring stick. So I expected a series of unexpected results based on interesting research by contrarian economists. But perhaps the well of real experiments has run dry. Because what we get instead is a lot of thought experiments. The economic theory is mostly conventional but Landsburg takes it to its logical (and unconventional) conclusion by advocating fully free market solutions for many social ills. Amusing and thought-provoking to an extent, but ultimately I'm left with the feeling of having consumed a calorie-free intellectual meal. We know very well that few of these solutions will ever be ...