Smokey Maverick

Book: Mind of the Market
by Micheal Sherman

This books publishing no doubt enjoyed riding the waves created by the splash of Freaknomics. Mind of the Market rides on it’s coattails by it’s characteristics of stand-alone independent chapters and it’s laymen writing resulting in a relative easy read, as well as viewing social and psychological economics through a stronger scientific lens. The book aims to apply Darwinian theory to social economics and battle against homo economicus (the idea that “Economic Man” is rational, self-maximizing and efficient – think The Invisible Hand) and economics being disdained as the “dismal science.”

The author, Micheal Sherman, began his collegiate career pursuing theology. After being discouraged by the four dead languages of Hebrew, Greek, Latin and Aramaic and the barren job market for theology intellects, he shifted his focus to psychology. It is here where he fell in love with science, for “science is founded on empirical data, statistical analysis, and theory building.” He moved onto graduates studies in experimental psychology, at which time he “had abandoned my religious faith and embraced in its stead the secular values of the Enlightenment and the rigorous methods and provisional truths of science.” Thus, it’s easy to see why Micheal’s first column in Scientific American revolved around “Darwin’s Dictum” – which comprised of the idea that “all observation must be for or against some view if it is to be of any service.” The author’s cold, calculating scientific slant on all topics found in his book are felt on almost every page.

Final Take: A relatively easy read with some intriguing, thought-provoking points. If you’re looking for a tad bit more of a scientific take on Freaknomics, this book is for you.

Other interesting points from Mind of the Market:

• “The Banker’s Paradox” is discussed in the book’s prologue. The paradox states that the people who most need the money are the worst credit risk for banks and thus cannot get a loan, while the people who least need the money are the best credit risks, and therefore, the rich get ‘richer.’ This hasn’t been much of a paradox as of late – for bank’s lending out money to risky creditors is part of why we find ourselves in this current economic funk.
• Chapter 8 is entitled “Why Money Can’t Buy You Happiness” – which has almost becoming a sickening catch phrase for your everyday-happy-go-luck-gee-golly-guy – but the author thankfully goes deeper than the surface on this topic. The disconnect between money and happiness is a result of two factors: Our genes and relative value.

  In regards to genes, the author remarks, “Genes account for roughly half of our predisposition to be happy or unhappy. That is, our temperament is the product of an interaction of our genetic heritage and our environmental circumstances (including the environments of our upbringing and those we choose today).”

  Happiness also appears to be directly related to relative value, where we measure ourselves against what our fellow peers have/do, and not some absolute measure. Research interestingly has shown that a majority of us would rather earn $50,000 a year with others making just $25,000, as opposed to making $100,000 for ourselves with others now making $250,000 (prices of goods/services remains the same in both cases).

  The book provides a potential solution to this rat race mentality: we should frame the question differently – not asking “What will make me happy” – but asking “What will satisfy me?” Psychiatrist Gregory Berns argues “While you might find pleasure by happenstance – winning the lottery, possessing the genes for a sunny temperament, or having the luck not to be born into poverty – satisfaction can arise only by the conscious decision to do something. And this makes all the difference in the world, because it is only your own actions for which you may take responsibility and credit.”

• The author once held an experiment where he asked 10,000 random individuals two open ended questions: “Why do you believe in God?” and “Why do you think others believe in God?” The top two reasons as to why people believed in God was “the good design of the universe” and “the experience of God in everyday life.” However, when asked why others believed in God, those two reasons dropped down to 6th and 3rd place, while “believing is comforting” and “fear of death” took over the top two spots. Whats this say about us? I believe in God because of this lofty reason, while my next door neighbor believes in God only to save himself?
• The Googleplex (Google’s HQs) lobbys are highlighted in one section, focusing on the complex’s well documented open, free, quirky, equity-breeding, fun, transparent atmosphere. This goes hand-in-hand with Google’s corporate motto: “Don’t be Evil.” Google has uniquely headed into the public company waters by placing greater value on it’s end user (the ‘customer’) than on the all powerful demi-god of money. Google has confessed before it’s goal is to help users leave their site as quickly as possible – all of this breeds trust, which has much greater long-term value than if Google would focus on the short term and sell ad space on it’s still minimalistic home page. Google founders Brin and Page comment, “our most important asset by far is our reputation as a company that warrants our users’ faith and trust.” I’m not a fanatical Windows basher – I’ve used the OS for years – but I can’t help but reading that and thinking “Does Billy Gates share the same, true, values for his Window users? If so, how has he gone about ensure that those values are met by his company?”
• Your location does not appear to have a very significant effect on ones happiness. “Living in California, for example, would on average surely make people happier than living in Ohio. In fact, a study found that both Ohioans and Californians believe that living in California makes people happier, but in reality, when you compare data on measures of the Subjective Well-Being test between people from both states, there is no difference.” See fellow Pittsburghers, it’s not as gloomy as it appears here!

Tags:   Book Buzz · Micheal Sherman · Mind of the Market3 Comments