Economics – Tejas Rao

The past fortnight has seen a strong return to reading. Return is a strong word which suggests I was ‘away’ from reading, so that should be rephrased. The past fortnight has seen a strong return to active reading, thinking and all. So it goes that I must write once more, all inspired by the change of seasons and clocks springing forward. This essay chronicles my exploration of two books which can be framed as describing the “psychology of”:

The Psychology of Money: Timeless Lessons on Wealth, Greed, and Happiness is a 2021 book by Morgan Housel. The book explores the psychology of money and how it affects our decisions. Housel argues that our relationship with money is often based on emotions, and he offers suggestions for how we can make more rational decisions about money.
Stolen Focus: Why You Can’t Pay Attention—and How to Get Your Attention Back is a 2018 book by Johann Hari. The book explores the psychology of attention and how it is being hijacked by technology. Hari argues that our attention is a precious resource that we need to protect, and he offers suggestions for how we can do this.

Housel was recommended to me by three/four different people whose curiosities I admire, while Hari popped up on Goodreads. Both came to me at excellent times. On Housel, have been working through my own feelings about finances for some time now. I know that this is an ongoing, evolving conversation one must have truthfully with oneself, but the initial stock-taking has commenced. Hari entered just as I was about to slip back into an old habit-pattern: one of multi-tasking, late-night sleeping, and so much more. As readers of this blog are aware, my practice of Vipassana meditation has significantly reoriented my life over the past six months. My “work” sphere is the sphere where this is most visible.

I would recommend both books strongly. Neither proclaimed to be universal truth, which allowed engagement in a more careful way (trying to recognise that arguments it made were a result of the life led by the author). Both had excellent structure, including space for counterargument. I have been delighted especially by how they weaved together and the residual thoughts they have left in my brain.

To my mind, these books are more similar than dissimilar. They make similar key claims about human behaviour, which I have only realised as I typed this up (oh the joys of writing)

They both argue that our attention is being stolen from us by technology. Hari argues that our attention is being hijacked by our phones, computers, and other devices. He says that we are constantly being bombarded with notifications and distractions, which makes it difficult to focus on anything for more than a few minutes. Hausel makes a similar argument, saying that our attention is being “weaponized” by companies that are trying to sell us things. He says that we are constantly being bombarded with ads and marketing messages, which makes it difficult to make rational decisions about money.

They both also argue that we need to be more mindful of our relationship with money. Hari says that we need to be aware of the ways in which money is being used to control us. He says that we need to learn to say no to things that we don’t need, and that we need to be more intentional about how we spend our money. Hausel makes a similar argument, saying that we need to be more aware of our spending habits. He says that we need to track our spending and make sure that we are not spending more than we can afford.

I’ll leave you with two parting thoughts, which you are free to interpret as reasons to pick up the books (they left me with questions and the desire to read more, surely an excellent sign):

First, Housel lays out bare an excellent argument for how money offers the security of choice, which is what you ought to bear in mind. I have seen evidence of this, and often find myself framing this as privilege in conversations with peers. Hari never makes this claim about technology explicitly, but I think it is entirely reasonable to claim that finding and retaining focus offers a similar security. I have been ruminating about how the flow state, which he examines at-length, is one that is wilfully chosen. How true is the idea that discipline is equal to freedom?

Second, I re-read parts of Diane Coyle’s Cogs and Monsters in this context (an excellent book in its own right – and you might find yourself asking at this point, how parting thoughts can point you to more books!). Coyle argues that the field of economics is in need of a major overhaul, as it is no longer equipped to deal with the challenges of the 21st century. She identifies three key problems with economics:

It is too focused on the individual, and not enough on the social.
It is too focused on the present, and not enough on the future.
It is too focused on the quantifiable, and not enough on the qualitative

In this light, Coyle’s work, and the work she has directed over the past few years (including some of my own) study value, and in the context of Hari and Housel, it is worth, in my mind asking how we (rather, I?) allocate value to time. What is time-value?

That is where I find myself jumping to next.

The War on Normal People: The Truth About America’s Disappearing Jobs and Why Universal Basic Income Is Our Future
by Andrew Yang
Published by Hachette Books (2018)
Rating: ****

Introduction

A while ago, I wrote about my journey reading about the White House. Since then, I shifted my attention to reading about, and books by candidates running for the Presidency this year. It seemed like a useful way to gain contextual information about some of their policy goals, but also understand who they were as people, in their own eyes. Autobiographies and personal narratives written by the people going through them provide the perspective (and opportunity) for people to articulate their ideas without too much restriction or restraint. I began this journey by reading about Andrew Yang, whose #YangGang trend on twitter blew up in and around the Democratic primary debates when he wasn’t on stage.

Summary

The title is a mouthful but is a summary of the core argument this book makes: people in America need a Universal Basic Income. This is premised on the changing dynamic of the economy, one that is more technology-focused and technology-driven, which has far-reaching consequences on communities across the economic spectrum. Yang, however, centers his consequential analysis on marginalized communities to showcase how a Universal Basic Income could alleviate additional societal stresses such as drug use and crime that pervade American society.

The Narrative

I enjoyed Economics as a subject throughout high school and University. However, reading non-fiction Economics for me is quite a challenge. Generally, non-fiction – especially those pieces of work that seek to argue a point of view, for me, are easier to follow along if there is a narrative to follow along too. Freakonomics and Outliers, for example, both take case-studies on a chapter-by-chapter basis. That seems like a simple enough way to present argumentative information.

Yang, however, splits up the book, in tone, into two distinct parts. There’s the premise, and the argument. His narrative is built up through the premise itself, drawing on from his own life – hailing from an immigrant family, and talking us through the history (recent past) of America’s economy, to understand the seismic shift that the economy has grappled with in recent years. He moves this narrative forward by talking us through the venture-focused economy America has become, of which, mind you, he is both a contributing cause – and effect. That enables him to portray a bleak picture of what the human has to endure. Additionally, America is a fractured country. Despite being the wealthiest nation on Earth, it has a significant wage inequality. The median, therefore, is not representative. Nonetheless, it is most significant to his argument – and so, he defines his “normal people” – the median in America.

The Argument

This brief history contextualizes most of the analysis that Yang provides. He puts forth, in plain terms, his belief that a Universal Basic Income would help address these issues of wage disparity, and help with the transition that has already begun.

However, Yang’s analysis goes deeper, looking at social dysfunction. He looks at gender imbalances in society, and how income would empower to help further the cause of equality. More importantly, any further stresses on people’s personal and social lives as a result of job disruptances (which Yang links back to the health of the economy) could be contained through the UBI mechanism.

The Humour

There are references to Civilization VI and computer games, which are always worth enjoying.

Conclusion

My only issue with the argument is that I needed more evidence – particularly in the second half. There was a point at which it delved into proselytizing people on the basis of faith and trust, which seemed like it made sense for a Presidential candidate to do, but not as much as an academic endeavour. Some of his statements felt suspect – and the case for the UBI could be made with evidence in a better manner. The tone of the book in these parts was misplaced.

Nonetheless, worth reading – particularly as a thesis on a strategy to cure economic inequality.

Category: Economics

Does time equal money?

Standard of Living | The War on Normal People: The Truth About America’s Disappearing Jobs and Why Universal Basic Income Is Our Future, by Andrew Yang