Last year I read Tim Harford’s 2004 book The Undercover Economist. While it didn’t knock my socks off like The Tipping Point and Freakonomics did, I still enjoyed it. Not long ago I was haunting the stacks at my local public library and I found his recent book The Logic of Life: The Rational Economics of an Irrational World. During that particular visit to the library I passed on it. However, when I returned to the library a few weeks later and noticed it was still there, languishing away unread, I decided to grab it. After reading it, I’m glad I did. As a matter of fact, I liked it more than his previous book.
In Harford’s newest book, he explores some of life’s most puzzling conundrums. By using his talents as an economist he attempts to answer a host of questions including why your boss is overpaid, why there is racism, why some neighborhoods are crime-ridden and some are not, and why people lose (or win) huge amounts of money by frequently gambling.
According to Harford, we are all rational actors. Even if our behavior seems irrational, with the results of those actions looking possibly undesirable, at some conscious level a brief little cost benefit analysis is going on inside our heads. Our choices regarding marriage, sexual encounters, and how much political freedom to grant the restless masses are all the results of rational decision-making. In short, we are much more rational than we see ourselves.