Scarcity: Why Having Too Little Means So Much by Sendhil Mullainathan and Eldar Shafir

In Scarcity, economist Sendhil Mullainathan and social psychologist Eldar Shafir introduce the study of scarcity as a ‘science in the making.’ One of their colleagues, perhaps a sceptic and certainly a joker, gibes: “There is already a science of scarcity. It’s called economics.” But the science of scarcity Mullainathan and Shafir have in mind is not familiar economics. Scarcity is much more the subjective experience (and hence a psychological phenomenon) occasioned by want. Scarcity, say Mullainathan and Shafir, ‘captures the mind.’

Scarcity is a condition that the authors easily recognize. They suffer the curse of the hyper-successful: they have insufficient time at hand to accomplish all they have committed to do. The lack of time preys on their minds (and promotes them to waste more time worrying and complaining about their lack of time) and sets off a cascade of real-life consequences: missed appointments, neglected family, unpaid bills. And perhaps more: a sense of helplessness, depression, despair. We wrote this book, the authors declare. "We were too busy not to."

And so the first scarcity -- the scarcity the authors experience -- is the shortage of time. But their field immediately widens to include debt and poverty, hunger and the dieter’s calorie-count, and loneliness. Scarcity collects these conditions and explores their dilemmas. While many will escape a particular form of scarcity (we are not all poor), all may experience some form of scarcity (as might a recipient of a MacArthur ‘genius grant,’ such as time-pressed Mullainathan). The authors assert the existence of essential commonalities across these states.

The Org: The Underlying Logic of the Office by Ray Fisman and Tim Sullivan

It feels odd to be composing this review of Ray Fisman and Tim Sullivan’s The Org in the days following Ronald Coase’s passing. Coase was an unusually creative and influential thinker - one who identified some basic truths of organizational life that had not been generally recognized: the kind of simple things that, once pointed out, cannot fail to be seen.

Coase and the work that followed Coase form much of the subject matter of The Org, a book-length meditation by Ray Fisman and Tim Sullivan on the science of the organization. Indeed, Fisman and Sullivan launch the book with the story behind Coase’s posing of the grand question: “Why orgs?” Young Coase travels to Chicago, meets with managers, and reads the Chicago phone book. He is struck by the range of scale and activities pursued by the firms he finds. Why then, asks Coase (and ask Fisman and Sullivan), are some activities conducted within firms and others between firms (that is, via the market)? Coase’s answer (transaction costs) may or may not be correct (‘transaction costs’ always seemed to me to be a convenient label for a still elusive explanation, almost a tautology); what is important is the question.

Organizations are mysterious. We fit them on like suits of clothing - and instinctively know how to push and pull their levers. Fisman and Sullivan focus on what happens within the firm - how organizations compel human agents (because that’s what we are) to pursue organizational goals. The resort to organization is by and large a given. At this point, they collect the principal/agent mysteries that form much of the challenge to understanding how firms work. Fisman and Sullivan do not confine themselves to business organizations in The Org - indeed their best coverage involves organizations that are not business firms: the Baltimore police department, Methodist churches and the military.

Noble Savages: My Life Among Two Dangerous Tribes - The Yanomamö and the Anthropologists by Napoleon Chagnon

Napoleon Chagnon's title promises a visit to two dangerous tribes: the Yanomamö and the Anthropologists. He provides a disjointed treatment. The larger part of the book takes the form of memoir, a return by Chagnon to the people he studied over the greater part of his career. The later chapters address the academic scandal surrounding Chagnon's work - and his place within the evolving discipline. Chagnon defends himself here - but he does not 'scientifically' study his anthropologist accusers: their violence (as opposed to that of the Yanomamö) is not explained.

Chagnon made the Yanomamö famous: his monograph (subtitled "The Fierce People') was widely studied (it was a highlight of the undergraduate Cultural Anthropology course I took). And of course the Yanomamö made Chagnon famous.

Chagnon's work was always controversial. He presented the Yanomamö as among the world's few remaining "Stone Age" people, largely isolated in the regions dividing Venezuela and Brazil. From here they subsistence agriculture from ever shifting villages. The Yanomamö were hardly unaffected by encounters with the outside -- they grew plantains and other crops that had been introduced to South America and prefered modern tools (including the machete and shotgun). Chagnon depicted the Yanomamö as a violent society, characterized by treacherous killings, inter-village raids, and systematic abduction of females. The Yanomamö were not Rousseau's noble savages.

Wired for Culture: Origins of the Human Social Mind by Mark Pagel

Mark Pagel addresses the conundrum posed by variegated cultures. Culture -- what we have that monkey's don't (according to a witty formula quoted by Pagel) -- both unites us and divides us. In Wired for Culture, Pagel attempts an evolutionary account for the existence of cultures. His inquiries commence with the mad multiplicity of languages. Language is the prime instrument of cultural transmission and the strongest marker of cultural identity. Yet the intra-group facilitation of communication provided by distinct languages are foreclosed to outsiders. Our languages seal us off from one another.

Human adaptability to the widest range of niches offers only a partial explanation for the multitude of cultures. New Guinea sports more than 800 different languages within a very small territory -- here mutual unintelligibility seems to be the point. Language operates both to permit and prevent understanding; both these characteristics are necessary. The value of a closed system of communication has long been recognized. Tradesmen, criminals and academics use argot to separate themselves and to keep secrets.

Pagel makes an evolutionary case for the multiplicity of languages; language serves as an identifier of group membership. This is culture's darker role: defining group boundaries. Pagel sees language and other cultural institutions functioning to set limits for altruism. Humans are social -- but only to a degree. We are a species that engages in magnificent cooperation -- yet are capable of inflicting harm on a scale not found in any other species.

The Hour Between Dog and Wolf by John Coates

What a fun book this is! The Hour Between Dog and Wolf by John Coates mixes pop finance with pop science, sketching some surprising links between them. I will trust Coates to get the science right (he provides citations). His investigation of financial markets is largely anecdotal and so speculative, but all the same it yields tantalizing suggestions.

Coates is a former derivatives trader -- which gives him authority to describe the subjective experiences of winning and losing at a trading desk. He (somehow) becomes hooked on neuroscience research; he describes himself sneaking away from his Wall Street desk to mix with scientists at Rockefeller University. The book seeks to bring these two worlds together. Coates immerses himself in the activation of hormones: testosterone, cortisol and the like. It is these chemical agents that produce the profound effects on the humors of financial traders, and hence overall market behavior.

Coates attacks the mind/body dichotomy: a financial market trader reacts more like an athlete than an analyst in responding to the stimula communication through his screen. Coates employs emerging understandings of mind/body feedbacks to track the play of traders. The traders can react before they 'see', rely on 'gut feelings' and engage in mano-a-mano combats from which they emerge winners or losers. These are quintessentially physical experiences. The markets themselves may then be understood as projections of this human biology.

Trading in financial markets, like war, is a young man's game. It draws on physical resources and reaction times, and a constitutional inability to fully appreciate surrounding dangers. But young soldiers require leaders with a different set of biological characteristics for larger scale success.
Coates develops a human biology account for market cycles. Biofeedback loops reinforce confidence in those traders experiencing winning streaks -- and most traders win in rising markets. The narcotic effect accompanying success then goads these traders to risk again and again, with ever greater stakes. The manic exuberance (a real physical effect produced by past successes) pushes speculators beyond 'rational' limits. Perspective is lost by nearly all at the top of a bubble.