Book ReviewBook Review

The Economics of EnoughHow to Run the Economy as If the Future Matters

Princeton University Press 2011, ISBN-13: 978-0691156293

by Adam Muza MuhayenFIN960 Financial Economics - PhD Mixed Mode

Diane Coyle •Runs Enlightenment Economics - consulting firm specializing in technology and globalization•A visiting professor at the University of Manchester•Holds a PhD in Economics from Harvard•Former advisor to the UK Treasury

Subject Areas :•Economics•Finance•Political Science•International Relations

Other books authored or coauthored :•GDP: A Brief but Affectionate History•New Wealth for Old Nations: Scotland's Economic Prospects•The Soulful Science: What Economists Really Do and Why It Matters

About the AuthorAbout the Author

Table of ContentsTable of Contents

PART ONEPART ONE““CHALLENGES”CHALLENGES”

“We have borrowed massively from the natural and

human resources of the future – to an extent that standards of

living will be lower... when people have to service our massive

financial debts and live with unknown environmental

changes.“- Diane Coyle-

CHAPTER 1 : WHAT’S HAPPINESS?CHAPTER 1 : WHAT’S HAPPINESS?

The “positive psychology” movement points to factors : 

  a) Active social engagement b) Absorbing work c) ‘Freedom’

This is consistent with empirical economic research indicating important indicators of reported happiness:

  a) Employment b) Marriage c) Religious participation d) Political liberties e) Income

GROWTH = HAPPINESS, NOT!GROWTH = HAPPINESS, NOT!

Financial & ICT revolution

Borrowing from the Future

IS THIS HAPPINESS?IS THIS HAPPINESS?

CHAPTER 2: NATURECHAPTER 2: NATURE

• The technological solutions needed for a low-carbon future are available, and not so expensive.

• The problem?? Finding the will and organization to do what needs to be done to save future generations.

CHAPTER 3 : POSTERITYCHAPTER 3 : POSTERITY

FUTURE GENERATIONS??FUTURE GENERATIONS??

CHAPTER 4 : INEQUALITYCHAPTER 4 : INEQUALITY

REALITY of INEQUALITYREALITY of INEQUALITY

FAIRNESS??FAIRNESS??

CHAPTER 5 : TRUSTCHAPTER 5 : TRUST

TRUST in INSTITUTIONS??TRUST in INSTITUTIONS??

PART TWOPART TWO““OBSTACLES”OBSTACLES”

"We do want more in order to be happier- but

how much more is feasible without

destroying the natural and social environment, and how much more is fair to the people who

will come after us?”

-Diane Coyle-

CHAPTER 6 : MEASUREMENTSCHAPTER 6 : MEASUREMENTS• Adopt broader, longer-term measures of economic

well-being vs G.D.P. • Additional metrics - health, education, the

environment, employment, purchasing power, stocks of the world’s resources and human capital

CHAPTER 7 : VALUESCHAPTER 7 : VALUES

“Materialistic, Conspicuous spending, Immediate gratification, Denial,

Ignorance, Hypocrisy”

Prof Barry Schwartz in his book “The Paradox of

Choice” argues that too much choice makes

people unhappier!

CHAPTER 8 : INSTITUTIONSCHAPTER 8 : INSTITUTIONS

Need to develop discipline:1.Maintain fiscal discipline2.Reduce economic inequality3.Effectively govern economic markets4.Include broader metrics

PART THREEPART THREE

CHAPTER 9 : MANIFESTO of ENOUGHCHAPTER 9 : MANIFESTO of ENOUGH

"We need to internalize a sense of responsibility to others, including

those not yet born, in order to restore the moral fibre that is needed for

market capitalism to deliver social well-being.“

- Diane Coyle -

Current Obstacles

Politics becoming managerial competenceLack the analysis (besides GDP) & institutions to address economic and social challengesCreating effective institutions for debating critical issues (besides G20, OECD)

Main Issuesi.Human’s frailty - ‘HAPPINESS’ii.Technology & Climate changeiii.SECURITY for rapidly aging population iv.Increasing INEQUALITYv.TRUST for economies, government & societies collapsing

DISCUSSIONDISCUSSION

ConclusionConclusion

In The Economics of Enough, Diane Coyle discusses ways in which government policy and the actions of individuals and private companies can better serve society in the long term.

Beyond the proximate impact of the 2008 economic crash, the developed world is also facing mounting pressure from the need to care for an aging population, the erosion of public trust in institutions, and, particularly in the United States and Great Britain, from growing economic inequality. Meanwhile, the entire world must determine how to deal with the threat of climate change.

Book Review – The Economics of Enough

Thank you for your kind attention

21st of November 2013

FIN960 Financial Economics - PhD Mixed Mode-Adam Muza Muhayen-