Currently Reading: The Armchair Economist

by Steven E. Landsburg.

I'm through about a third of it so far, enough to form an opinion which is: It's like reading a book on astrology. It presents a lot of mysteries, promotes some novel theories which the author uses to bolster his premise that all people are always make rational economic decisions. He is, however, glazing over a lot (a real lot) of complicated math and often simplifying to the point of incomprehensibility. He also, fairly regularly, undermines his premise by pointing out that some things don't seem to make any sense (he has a good example in 99-cent pricing structures), but takes it as a tenant of faith that they somehow do.

Actually, astrology is a bad analogy. Evolution is a better one. It a complex problem with a complex theory that sometimes makes predictions, sometimes is testable, but often leaves one stumped and saying, "why did nature chose that adaptation" or poses unanswerable questions like, "Why haven't we evolved X since that would make more sense...". Unlike evolutionary theory where detractors can point to god or an "intelligent designer", economics is clearly a man made enterprise. However economics and evolution seem to be governed by similar principles like adaptation to the environment/market, incentive driven outcomes etc, and I suspect are described by the same mathematics.

It's an interesting read and while I agree that his premise is true in the abstract, I tend to disagree that it's always true in the details. Like evolution, I think a lot of mysteries are left over from earlier states when the feature in question was an advantage but is not anymore. Hence, while once a product of rational choice, the memory required for the system to operate occasionally leaves artifacts which later are patently irrational with (for various reasons) little pressure to change.

If nothing else, it's a mildly interesting read.