Book Review: Discover Your Inner Economist

Tyler Cowen's contribution to the recent spate of pop economics books that started with Steven Levitt's Freakonomics is these best of the bunch. The dangling carrot on the dustjacket symbolizes Cowen's view of economics: incentives matter. While other of these books pose interesting conundrums to the layman and professional economist alike and do much to put a sexier shine on the field than many practitioners are able to do (remember the worst economics class you ever took, including graduate school), none is able to constructively challenge doctrinaire economic thinking and connect with the intuition that all people have--their "inner economist."

For example, getting the dishes washed is not a problem best solved by paying one's kids or significant other. Instead, it is probably best tackled by giving the victim/washer incentives other than monetary. Cowen recognizes that homo economicus maximizes in multiple dimensions simultaneously--we respond to both strong and weak incentives, some of which affect our earnings, but many others that don't. Art, literature, culture, vanity, and most importantly, control are central topics in the book. There are a lot of ways to control your life without paying everyone to do what you want--in fact, that strategy is unlikely to yield the results you desire. The notion of a person who only cares about one thing, money (or a person all of whose cares can be translated into money), is rejected by Cowen. He appeals to the humanity of his reader, who knows this intuitively, but who may still want to figure out how to get a waitress to optimize a dining experience in a restaurant or reward his dentist for her great service. It is no surprise that Cowen's insights on gustatory pursuits are excellent. He even gives some tips on home cooking.

Like other books in the genre, Cowen's offers wonderful antecdotes for the prospective economics teacher. His treatment of complex issues is thorough but understandable. While the conclusion is weak by comparison, the perspective of a very capable practitioner outside the mainstream of economics lends a stimulating perspective on choice and scarcity to all readers.