|ILSR Reads: The Mind of the Market By Michael Shermer|
|Written by KarenX|
|Sunday, 18 April 2010 16:48|
The Mind of the Market
Compassionate Apes, Competitive Humans, and Other Tales from Evolutionary Economics
By Michael Shermer
Read the book club discussion
Long Story Short: This is a book about, variously, the free market, evolutionary psychology, and economic decision-making that has only one chapter devoted to the main premise of the book.
Why I Chose This Book: I liked the idea of kicking off the Book Club for the International League of Skeptical Readers with a book written by a famous skeptical author that branched out from the traditional science or religious fare.
The Book’s Strengths: Shermer has written a book about economics and trade that explores many different aspects of the producer to consumer process. He fills it with interesting anecdotes about how some products make it to market, how government can affect what gets produced, and how people behave with their money. As a non-economist (and not even a market aficionado) I appreciate the accessibility of his examples and explanations. He makes the nuances of economics—to the extent that nuances can be presented in such a short book for general readers on an offshoot topic—very understandable. I particularly appreciate his explanation of “folk economics,” or how thinking on a short-term, personal level about money can be exactly the wrong thing to do. I am guilty of not thinking about money sufficiently, and I am glad now to have some insight why. At the very least, he has made me interpret conversations I have or hear about money with more knowledge of where my ignorance is, which is stage one of fiscal empowerment (I guess).
Shermer has also filled the book with references to economists and psychologists, people who have theorized and analyzed market movements since the Enlightenment Era and people who are studying human behavior within controlled scientific experiments and with modern, technological tools. You understand everything as you read it, which is great, and you come away with some urban myths debunking and some cool soundbytes of data, such as the QWERTY keyboard wars and the invention of the gel-filled bicycle seat. Shermer’s writing style is interesting and well-paced, the prose is clear and optimistic, and it is a good voice to hang out with.
The Book’s Weaknesses: This is a volume that does not hang together well. I am sad about this. It is also a book that is not really about what it purports to be about, which is very disappointing. We don’t really get an analysis—scientific or otherwise—of why “the market” behaves as it does, and the few glimpses we get of why consumers do what they do are not big picture stuff. I don’t want to blame Shermer for things that maybe the marketing department at his publishing company did, and I don’t want to speculate (not with specifics, anyway) on how much of the book was actually written before he contracted with Holt, but it is absolutely not what I thought the book would be about. Let’s start with the publisher’s book description. Yeah, yeah, I know that the author does not creating marketing copy, but looking at it goes a long way towards explaining my mild annoyance at falling victim to a bait and switch:
Michael Shermer…shows how we made the leap from ancient hunter-gatherers to modern consumers and traders and how the capitalist marketplace thrives as a sort of Darwinian organism, evolving through natural selection as the fittest way to satisfy our needs.
It’s flashy and engaging, but it’s not that different from the purpose of the book that Shermer establishes in the prologue:
Markets that traffic in rankings, ratings, and bestseller lists seem to operate on their own volition, almost like a collective organism. In fact, this is only one of many effects we shall see in this book that demonstrate just how much the mind influences the market, and in a broader sense how markets seem to have a mind of their own.
These two paragraphs are broad enough that you could say I was being too picky, that I misinterpreted the whole thing, and the book does meet these established goals, but I remember Michael Shermer’s podcast/interview rounds. I heard him in a couple different venues, and he talked up a different book than I read. This is not a book that explains the kind of large population trends that shift the balance between consumers and producers, and the gains in status and desirability that explain how some perfectly good (nay, superior) products fail against lesser competitors. I expected more on advertising, and communication, and the globalization of culture, and how people behave, and I guess book a lot more like Robert Wright’s Non-Zero in economics form than this one. I honestly don’t know if a book like the one I envisioned could be written, but I had high hopes. (Did I already say that? Believe you me, they were high.)
There was one chapter that met all my expectations. It was a great chapter. Right smack in the middle of the book, Chapter 6: “The Extinction of Homo Economicus” was exactly what I wanted. It gets into the brain scans, and the primates, and the psychology experiments, and the analysis, and the commentary, and the bigger picture things that I really was looking forward to. I know exactly why he was pimping this chapter in the interviews, though—it contained all the good parts. It actually addresses 1) the mind, 2) market interactions, 3) monkeys, and 4) real world examples. Who doesn’t love monkeys? And fancy fMRI machines? And brain science?
The eleven chapters do not follow this template. The first few chapters—a good quarter of the book—are reasonable, persuasive arguments for how the free market will save the world. It’s a Libertarian plug. It’s not even an obnoxious Libertarian plug, but it doesn’t really address the stated purpose of the book, except in the most incidental ways with a couple references here and there obviously tacked on to remind people they are reading a book about psychology and evolution, too. There are chapters about virtue, and happiness, and trust, and other non-market things that only at the last minute tie into the topic of the book. I was patient with the beginning, and was rewarded with Chapter 6, but when the subsequent chapters left the plan again I really started getting antsy. I had a hard time focusing on anything after the first half of Chapter 9: “Trust with Credit Verification.” Then the book wrapped up with more arguments for unencumbered free markets. Like I said, they were good arguments, but that’s not what the book set out to cover. It’s really just one big tangent.
What Should Have Happened: If Michael Shermer really wanted to write a series of short articles addressing the psychology of humans, he should have. The book already has the words “Tales from” in the title, and if people knew in advance they were getting a loosely related collection of tales about evolutionary behavior, they would probably like it. It would have saved him from reaching as far as he did to make an economic point just to prove he’s writing a long text and assembling an anthology. I mean, come on. The About Schmidt and the Ndugu Effect conclusion to Chapter 7: “The Value of Virtue” was a reeaaall stretch. I think, however, that publishing a book about “Evolutionary Economics” sounded new and fresh, whereas a book about evolutionary psychology or sociobiology or whatever you would call these chapters would not stand out.
Short Story Shorter: I would not recommend this book. It is too muddled.