1. American Pastoral, by Philip Roth. It’s taken me this long to read my first Roth novel, which is embarrassing given how prolifically excellent he is. American Pastoral is a powerfully moving novel. The title is apt and ironic, the story of Swede Levov, a guy on the path to a perfect, idyllic, idealized American pastoral life. Naturally, it wouldn’t be a great novel if he ended up getting his dream and keeping it.
One passage that occurs after a family tragedy that’s revealed early in the book: “He had learned the worst lesson that life can teach–that it makes no sense. And when that happens the happiness is never spontaneous again. It is artificial and, even then, bought at a price of an obstinate estrangement from oneself and one’s history. The nice gentle man with his mild way of dealing with conflict and contradiction, the confident ex-athlete sensible and resourceful in any struggle with an adversary who is fair, comes up against the adversary who is not fair–the evil ineradicable from human dealings–and he is finished. He whose natural nobility was to be exactly what he seemed to be has taken in far too much suffering to be natively whole again.”
2. Predictably Irrational, by Dan Ariely. Economists love elegance and hate messiness. Much of traditional economic theory is based on the premise that, in total, individuals make economically rational decisions. A specific individual may make a poor economic decision based on emotion, but that decision is offset by a more rational person taking advantage of that inefficiency, making the net sum of economic decisions rational. This is important in economic theory because it underpins highly complex formulas used by economists. The problem, as any astute observer of human nature will tell you, is that this core, underlying assumption is wrong.
We are not, even in total, always rational. The housing bubble is example prima facie of group irrational behavior over a long period of time, but University of Chicago economist Eugene Fama, the most hardcore of the always-rational-school, doesn’t believe bubbles even exist. He presumably assumes that the three-standard-deviation movement up in housing prices followed immediately by the three-standard-deviation down in home prices was a “random walk.” If the major assumption that people are always rational is wrong, what does that mean for the economic models based on that assumption? My take is that the models are directionally right over the very long-term, but not very useful past a certain point of granularity or time-sensitive analyses.
Dan Ariely, an economist at Duke and MIT, has written a very accessible and enjoyable book on this new-ish field of behavioral economics, which tries to understand how people actually make decisions, not just how they should make decisions. Predictably Irrational is different from most of the pop-psychology books such as Sway and Influence in that it focuses specifically on economic decisions. For example, in one of his experiments, he shows that we’re irrationally, but predictably, drawn to all things free, even if it means passing up a much better deal with greater cost savings.
3. The Leopard, by Giuseppe di Lampedusa. I read this while on a trip to Italy, and I am now wholeheartedly in the read-a-novel-of-the-country-you’re-traveling-in camp. The Leopard takes place in Sicily (I was in Tuscany, but whatever) at the time of Garibaldi’s unification of Italy. The novel follows a Sicilian prince — our “leopard,” which makes for all kinds of fun feline literary puns — as he deals with the decline of the regional monarchy. It was the only novel, published posthumously, of an Italian aristocrat, and it’s too bad he never got a chance to see how well the world took to it.
4. Money Masters of Our Time, by John Train. It’s books like Money Masters that remind me just how rare it is to find good writing on finance, and it makes me that much more grateful for Roger Lowenstein and Michael Lewis. Money Masters is mediocre but readable. It’s a series of profiles on 17 renowned investors, and the style of Train’s vignettes are soft-idolatry — lots of reverence; cursory criticism. It’s a nice source of snapshot information on famous investors, but it’s not a must-read even for investing geeks.
5. The Language Instinct, by Steven Pinker. I’ve always thought the observations from pedagogical math types akin to “Humans aren’t very good at numbers” to be ridiculous. We’re not good at math? Compared to who? Birds? Ants? Baboons? What’s the baseline benchmark that we’re using to compare whether humans are “good” at numbers or not?
Steven Pinker makes me feel ridiculous for not seeing what now seems obvious. We’re hard-wired for language, not numbers. According to Pinker, the average high-school graduate has a vocabulary of around 60,000 words, if you include proper names, acronyms, non-intuitive compound phrases, etc. The vast majority of these words were absorbed through the normal course of reading, talking and interacting with human beings. Now imagine trying to remember 60,000 number combinations. Essentially impossible. This isn’t a learned trait; this is a native instinct.
6. An Episode in the Life of a Landscape Painter, by César Aira. I read this scenery-and-imagery-centric novella while traveling around Argentina. Again, I’m now a huge fan of reading a local novel while traveling in that country. The story is about a European landscape painter roaming through Argentina trying to capture its essence. Perfect reading for a temporarily retired American financier roaming through Argentina trying to capture its essence.
7. Create Your Own Economy, by Tyler Cowen. For the last three years, Tyler Cowen has been a part of my daily reading routine. My discovery of RSS readers and blogs have fundamentally and permanently changed the way I take in information, and it’s blogs like Tyler’s Marginal Revolution that have not just kept me more informed but also enhanced my ability to think critically. Long essays and investigative reports that one can find in The Atlantic or The New Yorker are still the best forms for communicating complex ideas and arguments, but the short-length and high-frequency format exposes readers to a much wider array of data sources and opinions.
It is highly appropriate that Tyler has written a book on this phenomenon’s impact on our lives. The “Economy” part of the book’s title is a bit of a misnomer, in the same way that calling Tyler Cowen an “economist” is technically true, but not fully accurate. Readers of MR will know that while Tyler is ostensibly an economist, his insights on human nature and culture are equally, if not more, important reasons for his wide following. Tyler’s main thesis in Create Your Own Economy is that our ability to create our own ecosystems (or economies) based on highly customized information choices (RSS reader vs. newspapers, iTunes vs. whole pre-set albums) lead to greater life satisfaction. For more on Create Your Own Economy and the personalized assembly of information, read Ben Casnocha’s review of the book in AEI’s The American. It’s got an awesome title: “RSSted Development.”
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