Free Lunch

David Smith's Free Lunch is one of the latest additions to my small collection of popular economics book (which is nearing 10 at the time of this writing). In the introduction, the author states:

At one level the book is an aid to reading newspapers, particularly the financial pages, and understanding (and being able to see through) the economic claims and counter-claims of politicians.

True to the stated objective, Free Lunch places more emphasis on macroeconomics -- it does cover some microeconomics, but you'll come across a lot more pages discussing stuff like effect of taxes, government spending, and so on. Now the choice of topics might not be as interesting as those you'd find in other books I've written about, but overall, it's actually quite engaging. Throughout the book Smith also covers development of important economic thoughts (which shapes the world's political economy landscape), and the lives of the important economists behind them. A number of influential economists, such as Adam Smith, Karl Marx, John Maynard Keynes, David Ricardo, and Milton Friedman are introduced, along with their most important works and historical context that inspired them. These parts of the book are highly informative, and make an interesting reading.

Probably due to his background as the economics editor of The Sunday Times, Smith is able to provide examples from events in recent history that illustrate the concepts being discussed. However, him being British, most of the examples used in this book are from Britain's economy. At one point, Smith relates the discussion on monopoly to privatization of British gas, telecommunications, and electricity firms. In another part, he presents a summary of British economic policies from the 1970s, as well as the underlying reasons. To me, this is a kind of double-edged sword. The choice of examples would surely help British readers. On the other hand, the book is sold worldwide, and readers from other parts of the world (such as myself) would find the examples less helpful.

Anyway, if I were to suggest one thing to improve in Free Lunch, it wouldn't be the content nor examples, but the writing style. The book feels too verbose at times, especially in the first chapters (which cover basic concepts like supply and demand). On the other hand, in the last chapters, the book kind of jumps around between different topics. I think inclusion of some diagrams could also help. The author decides to avoid use of formulas and diagrams to make the content more accessible to general audience, however, sometimes some simple diagram can save paragraphs worth of explanation. As the saying goes, a picture is worth a thousand words.

In conclusion, I find Free Lunch to be worth buying. It'd be better if it were more concise, but as it is, the book can already be a useful guide to help non-economists like myself to understand how things in “the economy” interact, and how changes in government policies can affect them. As a bonus, it also provides an interesting, if brief, overview of history of modern economic thoughts.

The Dark Knight - Joker Interrogation Scene Spoof

Interesting Book Placement

Came across these in a bookstore

"How to Kill", next to "Nonviolence"?


Self-explanatory

Freakonomics

Freakonomics: A Rogue Economist Explores The Hidden Side Of Everything is perhaps the most famous "popular economics" book of recent years. Authored by a prominent economist from University of Chicago (Steven Levitt) and a New York Times journalist (Stephen Dubner), this 2005 book grew out of a profile Dubner wrote about Levitt in New York Times magazine in 2003. The book comprises a number of articles in which economic theory are applied to analyze a diverse range of unusual subjects, ranging from phenomena of cheating among Sumo wrestlers to factors affecting how babies are named). Naturally, the academic content is based on Levitt's research work, while Dubner contributes his ability to translate the content into engaging, more accessible style suitable for general audience.

Interestingly, Freakonomics does not have an unifying theme, though according to the introduction it is based on some fundamental ideas, quoted below:

1. Incentives are the cornerstone of modern life

2. The conventional wisdom is often wrong

3. Dramatic effects often have distant, even subtle, causes

4. “Experts” – from criminologists to real-estate agents – use their informational advantage to serve their own agenda

5. Knowing what to measure and how to measure it makes a complicated world much less so.

Indeed, one of Freakonomics's main strengths comes from Levitt's ability to come up with unconventional questions and then analyze massive amounts of hard data to discover the answers. Some of the discoveries, such as socioeconomic factors affecting children names, are fascinating although probably of little practical use. Some other, like how information asymmetry affect behavior of real estate agents, can be very useful to many people. And there are discoveries that might downright offend a number of people, or simply contradicts conventional wisdom. The book provides comprehensive list of citations and sources of data used though, and at various points Levitt shows samples of data used in his research, and the steps he used to derive the conclusions. As the authors state in the book's introduction:

"Morality, it could be argued, represents the way that people would like the world to work – whereas economics represents how it actually does work"

At the end of the day, the value of Freakonomics is perhaps not so much about its conclusions and more about how it shows that asking the right questions and analyzing the right data can lead us to more accurate view of the world than simple reliance on "conventional wisdom".

Switching to W960

Today, I bought a Sony Ericsson W960 to replace my Motorola ROKR E2 and, probably, my Acer n311 PDA as well eventually :) So now my phone history is as follows:

• Siemens M35: Chose it because it was somewhat "ruggedized". Just thought it was a good idea to have more durable phones. I later gave it to my younger brother when I moved to Singapore.

• Siemens C35: Chose it because it was one of the cheapest phones with 2-year post-paid plan I could find when I first arrived in Singapore. Wasn't a remarkable phone in any way, though I seem to recall that it was very reliable, like both its predecessor and successor.

• Siemens M55: Color screen, and if I'm not mistaken, was also one of the cheapest phones with 2-year plan (what can I say, I was a poor student :p). Unfortunately it was later stolen :(

• Sony Ericsson Z600: An easy to use (albeit thick and somewhat slow) clamshell phone. Bought it for my dad actually, I got to use it for a few weeks. First encounter with Sony Ericsson's user interface, found it quite nice.

Phones I've owned (not to scale, obviously :p)

• Motorola E398: Chose it because feature-wise, it looked compelling given its price -- for example, not many of its competitors has memory card slot. First encounter with Motorola's "good hardware / bad software" combination. Main issue? Responsiveness. Another issue: user-friendliness.

• Motorola ROKR E2: As with E398, I chose E2 because its feature looked compelling for its price (was $138 with 2-year post-paid plan). It has QVGA screen and hardware powerful enough to watch movie during commutes, accepts standard SD card (cheaper than microSD), and has standard 3.5" earphone jack. It also uses miniUSB port and can work as removable storage. Unfortunately, Motorola's "good hardware / bad software" phenomena persists... Responsiveness and user-friendliness remain a problem, although I still find E2 interface a major improvement from E398.

• Sony Ericsson W960: This time I had the opportunity to buy phones from higher-end range without exceeding my (admittedly small) phone budget. Reason? I had received upgrade voucher from my telco few weeks back. Combined with voucher from redeemed reward points and trade-in value of the E2, even PDA phones such as LG's KS20 and HTC Touch was well within budget. And having become PDA user at that point, I did consider Windows Mobile devices almost exclusively for quite some time. Later I start to realize that while I'm OK with Windows Mobile interface on a PDA, I want something better for phone functions. Looking for alternatives, I switched my focus to Sony Ericsson smartphones (more specifically, W960 and G900), which appeared to have better user interface, camera, and multimedia features than Windows Mobile phones in the same price range. My impression was that W960 and G900 were about even for my intended usage, but since the shop I went to didn't sell G900, I eventually bought W960. Total amount spent for the phone: $58 (+ $10 for the screen protector) :D I'm quite confident that I'll be happy with W960's phone functions (especially considering I'm using the aging, lower-end class ROKR E2 as baseline.. :P), although it remains to be seen whether its capability as a PDA will be enough to make me sell my trusty n311 :D
  

SE G900 Demo Tour


SE W960 Demo Tour