The economic calculations at the heart of our everyday existence

 
6 February 2014

I Spend Therefore I Am: The True Cost of Economics by Philip Roscoe (Penguin, £16.99)

Back at the start of the Noughties, the task of making economics interesting for anyone but the pointy heads who get their kicks from aggregate demand curves seemed impossible. Then along came Steven Levitt’s Freakonomics, and the task of making a book about economics as interesting (with choice statistics such as “the swimming pool is about 100 times more likely to kill a child than the gun is”) seemed just as impossible.

But if Freakonomics set the bar high, Philip Roscoe, a reader in management at the University of St Andrews, wasn’t out to challenge it. “Bookshelves strain under the weight of the ever-more confident ‘economics explains everything’ genre,” he concedes early on. Roscoe’s thesis is different: he wants to show how economics invades almost every decision we make and is changing how we behave.

Decision-making governed by economics, he claims, already sees us justify concepts that would once seem abhorrent — picking a spouse in the same way as buying car insurance; incentivising blood donors; being free riders who ignore the environment.

It’s a shame, though, that Roscoe takes so long to get there. There’s a dense wade through the history of economic theory, and at times the prose style is more akin to an academic paper. Get through it, though, and I Spend Therefore I Am’s vision of a future world where we are each governed by economics is alarming.

One of the best chapters analyses how economics led to the invention of credit scoring — giving individuals a number rating of how likely they are to repay debt — which itself created sub-prime lending and 2008’s implosion in banking. “Online calculators, best deals, credit ratings, and an incessant short-termism of come-on prices and refinancings is no basis on which to build a prosperous society,” says Roscoe.

Elsewhere, dating sites have “harnessed the methods of economics — surveys, statistics, and algorithmic matching — to lay claim to a particular scientific knowledge about what makes a perfect relationship”, meaning partners have become “commodities to be compared and consumed” — it’s relationshopping, apparently. We “pare ourselves down to a list of characteristics, and bargaining commences: economic men and women, seeking the best deal we can get for the credit we have available”.

And it won’t be long, Roscoe warns, before selling bits of our body becomes mainstream. “When a Chinese teenager sold his kidney to purchase an iPad, the global news coverage seemed more outraged at his choice of purchase than the sale.”

Despite the gloom, Roscoe concludes that economic-thinking shouldn’t be dumped. It just needs to leave behind the dispassionate science. In the shops, Roscoe ponders, a smartphone with a tag detailing it was made by a man who took his own life, or a T-shirt whose label reveals it was made by a woman earning £7.95 a month, might see consumers think about more than just price.

“Integrating its ends with its means can see economics help humans to flourish rather than base life on efficiency,” Roscoe concludes. His dystopian outlook on the world now, though, makes that possibility seem like a long-shot.

Go to standard.co.uk/booksdirect to buy this book for £13.99, or phone 0843 060 0029, free UK p&p

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