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Sept. 30, 2005
Understanding our world
Economics, soccer and entrepreneurs explain how things work.
CYNTHIA RAMSAY
I have an MA in economics and have worked as an economist for more
than 12 years. I have run my own business for more than seven years.
Nonetheless – or perhaps because of this – in my off hours,
I read mainly fiction and find little or no enjoyment in books or
articles about economics, business or anything of that sort. There
is the odd exception, however, and this year I have found three
educational and, more importantly, enjoyable books on these very
subjects.
More neat than freaky
A best-seller about economics? Hard to believe, but Steven D. Levitt
and Stephen J. Dubner have written such a book: Freakonomics:
A Rogue Economist Explores the Hidden Side of Everything (William
Morrow/ HarperCollins Publishers, 2005).
What is freakonomics? According to Levitt (an economics professor)
and Dubner (a journalist and author), it is the use of economics'
best analytical tools to investigate "whatever freakish curiosities"
occur to them: "Since the science of economics is primarily
a set of tools, as opposed to a subject matter, then no subject,
however offbeat, need be beyond its reach." So, in Freakonomics,
they explore such queries as why teachers in the United States may
be inclined to manipulate students' test results; why, if drug dealers
make so much money, they still live with their mothers; what caused
crime rates to decrease during the last decade; and what makes a
good parent. The answers are often surprising.
In the book's introduction, Levitt and Dubner clearly lay out the
worldview behind Freakonomics: incentives are the cornerstone
of life, conventional wisdom is often wrong, dramatic effects often
have distant and/or subtle causes, experts use their information
advantage to serve their own agenda and knowing what to measure
and how to measure it makes a complicated world less so. They consider
not only the economic or financial incentives that influence people's
behavior, but the social and moral incentives, as well. They give
the anti-smoking campaign in the United States as an illustration:
the addition of a "sin tax" works as an economic incentive
against buying cigarettes; the banning of cigarettes in public places
as a social incentive; and government assertions that terrorists
raise money by selling black-market cigarettes as a moral incentive.
As a hint of the unique conclusions reached in Freakonomics
and the ease with which the book communicates complex ideas, take
the question of what makes a perfect parent. The authors use data
from a late-1990s U.S. Department of Education project, called the
Early Childhood Longitudinal Study, which sought to measure the
academic progress of more than 20,000 children from kindergarten
through Grade 5, and school test scores. They examine the correlation
between the two sets of data, i.e. whether they move together. (The
example they give of correlation is that it tends to be cold outside
when it snows; these two factors are positively correlated. Sunshine
and rain, however, are negatively correlated. Correlation does not
imply causality. For instance, it does not snow because it is cold
outside.)
It turns out – after in-depth economic analysis from which
readers are thankfully spared the details – that "parents
who are well educated, successful and healthy tend to have children
who test well in school; but it doesn't seem to much matter whether
a child is trotted off to museums or spanked or sent to Head Start
[a U.S. federal preschool program] or frequently read to or plopped
in front of the television." What parents are, rather than
what they do, seems important.
"But this is not to say that parents don't matter," write
Levitt and Dubner. "Plainly they matter a great deal. Here
is the conundrum: by the time most people pick up a parenting book,
it is far too late. Most of the things that matter were decided
long ago – who you are, whom you married, what kind of life
you lead. If you are smart, hardworking, well educated, well paid
and married to someone equally fortunate, then your children are
more likely to succeed. (Nor does it hurt, in all likelihood, to
be honest, thoughtful, loving and curious about the world.) But
it isn't so much a matter of what you do as a parent; it's who you
are. In this regard, an overbearing parent is a lot like a political
candidate who believes that money wins elections, whereas, in truth,
all the money in the world can't get a candidate elected if the
voters don't like him to start with." (The authors explain
the money and election-win scenario earlier in the book.)
To use a cliché, Freakonomics makes learning fun –
a feat especially remarkable given that economics is known as "the
dismal science." Not only will the book (hopefully) change
minds about the value and interest of economics, but how people
view the world: conventional wisdom does indeed seem often to be
wrong.
It's not just a game
Despite the title, How Soccer Explains the World (Harper
Perennial, 2004) by Franklin Foer doesn't really use soccer to explain
the world. Rather, it is an intriguing and well-written book about
the game and how globalization has (or has not) influenced it, and
sometimes vice versa.
A self-proclaimed lover of soccer, Foer took an eight-month leave
from his job at the New Republic magazine to perform the
"oh-so-arduous" task of visiting stadiums around the world,
attending matches, watching training sessions and interviewing players.
On his journeys, he tried to use soccer as a way of thinking about
how people identify themselves in a more globalized (interdependent)
world.
"Would people stop thinking of themselves as English and Brazilian
and begin to define themselves as Europeans and Latin Americans?"
he asks in How Soccer Explains the World. "Or would
those new identities be meaningless, with shallow roots in history?
Would people revert back to older identities, like religion and
tribe?"
In additional to culture and history, Foer also looks at economic-related
issues – the effects of migration and the persistence of corruption,
for example. He also examines instances of anti-Semitism and racism.
The most obvious way in which the growing interdependency of nations
is reflected in soccer is the players. "You could see globalization
on the pitch," he writes. "During the nineties, Basque
teams, under the stewardship of Welsh coaches, stocked up on Dutch
and Turkish players; Moldavian squads imported Nigerians. Everywhere
you looked, it suddenly seemed, national borders and national identities
had been swept into the dustbin of soccer history."
But Foer goes deeper than this, jumping all over the world and through
time in this book. He has chapters on such topics as gangsters'
influence on the Serbian soccer team Red Star Belgrade; the Jewish
soccer team Hakoah of Vienna, winners of the 1925 Austrian championship;
the influence of soccer on Islam in Tehran since the First World
War; and how attitudes towards soccer in the United States reflect
the sides of America's "culture war," which Foer defines
as the battle over textbooks, abortion, prayer in school, affirmative
action and funding of the arts.
While Foer's fan status may cause him to attach too great an importance
to soccer as an influence in the world – in the section on
Islam, he claims that soccer "holds the key to the future of
the Middle East" – he does raise some interesting questions
and possibilities. Without a doubt, the historical information he
provides is fascinating. Even for a non-soccer person, How Soccer
Explains the World proves a good read.
Learning from experts
It's not the best-written book out there, nor is it the most appealingly
designed, but Everything I Needed to Know About Business ...
I Learned from a Canadian (John Wiley & Sons Canada, Ltd.,
2005) is a must-read for anyone who is starting out in the business
world or whose business (career) is stagnating. Rather than just
compiling a bunch of feel-good platitudes from famous people, Leonard
Brody and David Raffa have amassed concrete advice from successful
entrepreneurs and published it in an easy-to-read format.
In Everything I Needed to Know About Business, Joel Cohen,
co-executive producer of The Simpsons, shares lessons about
teamwork that he "learned" from the TV show's patriarch,
Homer Simpson; CanWest Global Communications Corp. chief executive
officer Leonard Asper discusses the concept of media convergence
and exploring uncharted business territories; Jeff Skoll, first
employee and president of eBay and now head of the Skoll Foundation,
which funds social entrepreneurs, examines this "new philanthropy";
and architect Moshe Safdie suggests principles that managers should
consider when designing their organizations. These are only four
of the 16 entrepreneurs/innovators who offer their insights, experiences
and best practices in Everything I Needed to Know About Business.
Each chapter of the book begins with a description of the entrepreneur
featured and a situation in which they found themselves or their
company. The next page is a box highlighting the five key points
of the chapter, which fleshes out these points.
Some of the recurring themes are the need to have a solid foundation
from which to work, but to be flexible; to be able to envision things
from the perspective of your clients/customers (hire someone to
do this for you, if you can't); to keep the big idea in mind while
not moving forward recklessly or too quickly; to know your core
values; and to provide clear leadership without stifling your staff's
(team's) enthusiasm or initiative.
These examples barely touch the surface of what is covered in Everything
I Needed to Know About Business and they don't do the book justice.
While it won't solve all your business troubles, it will help you
put things into perspective and you should walk away from it with
at least a handful of ideas that, who knows, may make your business
more profitable.
In the spirit of helping young entrepreneurs, authors Brody and
Raffa are donating their profits from the Canadian sales of Everything
I Needed to Know About Business to Junior Achievement Canada.
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