(The following is a except from the book Cocktail Party Economics. Footnotes have been removed for formatting purposes.)
Either write something worth reading or do something worth writing.~Benjamin Franklin (1706–1790), American politician and polymath I am a woman who is optimistic, extroverted, and an economist. (Oh dear, this sounds like one of those profiles in a dating service. All it needs is … who enjoys long walks on the beach and going to parties.) As frivolous as it sounds, I really do enjoy going to parties: cocktail parties, wine and cheese parties, dinner parties, and ordinary barbecues. Dress-up parties hold a special place in my heart. The more haute, the better. It’s not just the party itself that I enjoy, but I find getting ready for the party fun as well. I can spend hours deciding which of my many little black dresses I should wear; I have more than I need but that doesn’t stop me from buying another. These dresses call to me from the store window as I pass by them. (Let’s not mention shoes, shall we?) Black is such a slimming colour, and it can be accessorized with elegant shawls and jewellery of all kinds. I favour bigger, flashier pieces right now. If writing a book called Cocktail Party Economics requires experience at cocktail parties, then I have it. So, how did I come to the write an economics book? It wasn’t on a dark and stormy night or in a land far, far away. Rather, it all started after attending different social gatherings where, as an economics professor, I am often asked economics-type questions such as:“Have interest rates bottomed out and should I lock in my mortgage?”
- “As a recent grad, what can I do to get a good job?”
- “Should the government bail out the car companies?”
- “What is the subprime mortgage market anyway, and why has it thrown Wall Street and the global economy into disarray?”
- “We should stop buying all this cheap stuff from China. It’s costing us jobs.”
- “How can you drink anything other than fair trade coffee?”
- “The government is selling the environment down the river by letting power plants buy pollution permits.”
- “It’s outrageous how much money athletes make.”
ECONOMICS + COCKTAIL PARTY = A BOOK
Economics is the study of mankind in the ordinary business of life.~Alfred Marshall (1842–1924), British economist I find that any answers I provide, both to the polite questions and during any ensuing conflicts, end up being unsatisfying mostly because of their brevity. This dissatisfaction with my own ability to communicate economics clearly and concisely during cocktail parties has motivated me to write a book that fleshes out the various conversations I have started at social functions. When I told my friends what I planned to do, they thought it was a great idea for their own separate reasons. But one thing was common: They were all tired of feeling lost when presented with complicated economic news stories or financial discussions. Since most of them do not have the time or inclination to take a university course to learn more, I decided to offer this book as an easy way for them to gain a more complete understanding of economic principles. As well, the book contains illustrations and real-world examples to help make the economic concepts relevant. The footnotes are extensive, sometimes expanding a thought and other times offering a bit of relevant trivia. I also happen to be a “quoteaholic” and have littered the pages with quotations that are sometimes discussed directly in the text or are obliquely connected. (If a quotation doesn’t make much sense to you, I wouldn’t worry about it. There will be plenty more.) I have tried to make my examples and illustrations accessible and make the text as entertaining as possible. I hope it works for you. My friends kindly warned me that the book would have to be fun to read or no one would buy it. Gasp … I definitely did not want to write a book that no one would want to buy. I am an economist, after all. So I asked myself, How can I write a book about economics that is also entertaining to read? To be honest, I didn’t really know. So, I solicited friends, family, colleagues, and even random strangers I met at parties for help, and help me they did. Their every critique, comment, and question caused me to edit my manuscript. (This book has been rewritten more times than I want to think about.) One particularly helpful comment came from my darling husband, who reminded me: “People like stories, and you should add as many as you can.” I took his advice to heart and decided to start every chapter with a party story that in some way connects with the ideas in that chapter. What is unusual about these stories is that I have placed you, the reader, in them. Don’t worry, the scenarios are relatively ordinary party situations and involve believable conversations, so you shouldn’t feel uncomfortable. There’s nothing outrageous.
Thinking Like an Economist
Art consists of limitation. The most beautiful part of every picture is the frame.~Gilbert K. Chesterton (1874–1936), British author Although one of my goals is to make economics fun to read, this book follows the pattern of a typical introductory text in terms of logic and topic progression. The logic of economics requires a systematic approach in order to truly understand what is going on. Because economics is fundamentally a way of thinking rather than a collection of idiosyncratic examples, after 20 years of telling a particular story I can’t really write an economics book that doesn’t build from the ground up. I want people to learn something about the elegant framework that surrounds all of the interesting applications found in the popular economics books on the market today. Like a great little black dress, basic economic concepts are timeless—relevant during both economic crisis and economic calm. Therefore, while I wrote this book to be understood by people who have never picked up an economics textbook, those who are taking or have taken an introductory economics course will recognize the flow of ideas but without the mathematics. Think of this book as Econo-Lite—enough to give you a buzz but not enough to have your keys taken away from you. For those of you who have no background in economics, don’t worry. This one’s for you. My friends made sure of it.