David Orrell. Writer and Mathematician
Economyths: Ten Ways Economics Gets it Wrong
» Edmonton Journal top-ten bestseller
Publishers: Icon (UK/ANZ), Wiley (North America), Record (Brazil), China Machine Press (China), Hikmah (Indonesia), Kawadeshobo (Japan)
From the inability of wealth to make us happier, to our catastrophic blindness to the credit crunch, Economyths reveals ten ways in which economics has failed us all.
Forecasters predicted a prosperous year in 2008 for financial markets - in one influential survey the average prediction was for an eleven percent gain. But by the end of the year major economies were plunging into the worst recession since the Great Depression. In 2010 they still haven't fully recovered.
An even bigger casualty was the credibility of economics, which for decades has claimed that the economy is a rational, stable, efficient machine, governed by well-understood laws.
Mathematician David Orrell traces the history of this idea from its roots in ancient Greece to the financial centres of London and New York, shows how it is mistaken, and proposes new alternatives. Economyths explains how the economy is the result of complex and unpredictable processes; how risk models go astray; why the economy is not rational or fair; why financial crashes are less Black Swans than part of the landscape; and finally, how new ideas in mathematics, psychology, and environmentalism are helping to reinvent economics.
“A must read for understanding the roots of the financial crisis, the severe limitations of the field of economics and what needs to be done to improve our ability to avoid future crises.” Spyros Makridakis, author of Dance With Chance: Making Luck Work for You
“A wonderful book.” Chetan Parikh, director of Jeetay Investments Private Limited
Reviews
“This is without doubt the best book I've read this year, and probably one of the most important books I've ever read ... This ought to be a real game changer of a book. Read it.” Brian Clegg, author of Before the Big Bang: The Prehistory of Our Universe, writing at popularscience.co.uk
“Orrell takes on the efficient market hypothesis (according to which 'No one ever gets together to talk about the price of houses or oil or the stockmarket'), equilibrium theory (the assumption of stability), problems of risk modelling (see The Black Swan), and unsustainable assumptions about rationality, fairness, limitless growth, and so forth. His tone is engagingly curious, drawing on biology and psychology, and his historical view spans more than merely the past few decades. Finally Orrell recommends an interdisciplinary approach to a 'new economics', in which ethics and complexity theory might have a say.” Guardian
“Orrell argues against 10 principles of economic orthodoxy, including the rationality and predictability of the market and its potential to provide happiness. If he's a dilettante, he's one with serious chops ... Invoking history, physics, biology, climatology and his background in complex systems to debunk neoclassical economics, Orrell makes a plea for an unorthodox economics, one drawing on ethics and environmentalism as well as emerging areas of mathematics like non-linear dynamics and network theory.” Canadian Business magazine
“Analyses reliably and convincingly the claim of economics to quasi-scientific objectivity and mathematical accuracy and exposes as a sales ploy that which made economics the queen of the social sciences.” Handelsblatt, review in German by Norbert Häring, author of Economics 2.0, 14 May 2010
“The author dissects ten fundamental misunderstandings ... He manages to convincingly explain the relevance of these myths and make them understandable, even for laymen, in a wider context.” Handelsblatt, preview in German, 12 Feb 2010
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