mostly nonfiction listener
Apparently influential in the Obama administration. Good to see the basics of behavioral economics being applied to a macro-economic book. Helped me get a better sense of why I paid too much for my house, why some folks are still poor, why jobs seem harder to come by, and why the folks making economic policy often seem like dumb apes. Well written and informative. Makes a good argument for the benefits and limits of capitalism and the necessity of regulation to protect our investments and jobs.
I loved "Free" for 3 reasons:
Reason 1: Anderson is a terrific storyteller. Free is one of those books where you learn some, think some, and have fun during the ride. The main argument for Free is that the economics of digital goods pushes the price of these goods to their marginal cost of production, which in the case of digital copies is close enough to zero to set that price at free. Further, the price of free enables all sorts of businesses and opportunities, providing opportunities for new business models, profits and services.
Reason 2: The growth of free has all sorts of implications for higher education. Nowadays a lifelong learner can receive a wonderful education from Web content ranging from TED talks to lectues on iTunesU and YouTube/EDU. Educational content is now free. This forces us in higher education to rethink our own value propositions and where we exist in a digital economy built around abundance of quality curricular and lecture content as opposed the scarcity model that traditional lecturing/courses is built upon.
Reason 3: Anderson made the unabridged audio edition of Free available for free on Audible and some other outlets. This price encouraged a bunch of us at Dartmouth to read the book together, generated some great discussions and debate. Having the book freely available to our community proved to be an excellent argument for the library overcoming the scarcity of digital books to have them available to our community. I admire Anderson to no end for putting his money where his mouth is and offering the digital copy at the price of production. I'd gladly pay more in Educause conference fees to listen Anderson keynote one of our conferences.
We are all self-appointed experts when it comes to money (or at least real estate), but none of us really knows much history. For if we knew the history of booms and busts, bonds and equities, risk and insurance then we may all be a little less likely to jump into the latest bubble, and a little more likely to question our own "expertise". I admire Ferguson for taking on a big topic, and for his willingness to provide a grand sweep of history that reflects and helps us understand our current recession.
The book was apparently written to accompany a documentary series, and it certainly reads that way. This is good and bad...and the narrative moves along quickly and big lessons are drawn - while at times leaving the reader wanting more analysis. One question that the author poses keeps coming back to me - have we been living through a "super bubble" from the 1950s to today, which will see a slow deflation in our lifetimes as property values stagnate and China is no longer willing to fund our consumption through their savings?
This is one of those rare books that strikes the right balance between being choked full of fascinating information, and not being over the head of a non-specialists. It has a tremendous breadth of coverage, and I would absolutely recommend it first (before anything by Sachs or Easterly, for example) for those interested in development economics. (It's not a bad read for economists either.)
For those who don't know: there's a longstanding feud between Sachs and Easterly--who sit at opposite ends of Manhattan at Columbia and NYU respectively--over, among other things, whether giving more aid to poor countries actually does any good, with Sachs arguing that it does, and Easterly basically arguing that if you don't have good "institutions"--which no one ever quite fully defines--nothing is going to help. Banerjee and and Duflo, at MIT, are trying to move the discipline beyond this old argument, and I would say largely succeed in this book. They do this by focusing on data driven results, especially experimental results, which are very rare in much of economics, but are becoming more and more the norm in development since there's a good deal of donor money and projects in poor countries can be remarkably inexpensive. So, for example, there's this really old irritating argument over whether giving away mosquito bednets, as opposed to selling them cheaply, actually leads to less usage because people don't value them. Well, someone finally actually did the experiment, and found that people who are given bednets mostly do actually use them, though they may take extras and waste them, and selling them really cheap works pretty well too. This is what development economists spend their time on.
But there are many more interesting facts to be learned from this book. For example, hunger apparently isn't a problem almost anywhere in the world, though a few specific spots in sub-Saharan Africa may be exceptions. But in most places, if you give people more money to be spent on food, they don't end up eating any more calories; they just eat nicer food. On the other hand, poor nutrition among children and pregnant women may be an issue with serious long-term costs. Community scale drinking water systems may be one of the most effective ways of preventing illness. Microfinance doesn't hurt the poor, but it doesn't seem to help all that much either. Insurance schemes for the poor may seem like a nice idea, but are very hard to implement and are often resisted by those they're intended to help.
My main quibble: This new approach to development is inherently microeconomic (as opposed to macro) in nature. You can't really do macroeconomic experiments where you transform one country's economy and not another. Which doesn't mean macro issues aren't discussed at all--there's a very long discourse on how poverty traps, essentially a macro idea, are to be understood at the micro level. But some of the big ideas in development are inherently macro in nature. One book can't do everything, but since I really do think this should be the first book non-specialists read, I would have liked the authors to summarize some of the other perspectives on the field a little more/better.