Tag: Economics

How (Supposedly) Rational People Make Decisions

There are four principles that Gregory Mankiw outlines in his multi-disciplinary economics textbook Principles of Economics.

I got the idea for reading an Economics textbook from Charlie Munger, the billionaire business partner of Warren Buffett. He said:

Economics was always more multidisciplinary than the rest of soft science. It just reached out and grabbed things as it needed to. And that tendency to just grab whatever you need from the rest of knowledge if you’re an economist has reached a fairly high point in Mankiw’s new textbook Principles of Economics. I checked out that textbook. I must have been one of the few businessmen in America that bought it immediately when it came out because it had gotten such a big advance. I wanted to figure out what the guy was doing where he could get an advance that great. So this is how I happened to riffle through Mankiw’s freshman textbook. And there I found laid out as principles of economics: opportunity cost is a superpower, to be used by all people who have any hope of getting the right answer. Also, incentives are superpowers.

So we know that we can add Opportunity cost and incentives to our list of Mental Models.

Let’s dig in.

Principle 1: People Face Trade-offs

You have likely heard the old saying, “There is no such thing as a free lunch.” There is much to this old adage and it’s one we often forget when making decisions. To get more of something we like we almost always have to give up something else we like. A good heuristic in life is that if someone offers you something for nothing, turn it down.

Making decisions requires trading off one goal against another.

Consider a student who must decide how to allocate her most valuable resource—her time. She can spend all of her time studying economics, spend all of it studying psychology, or divide it between the two fields. For every hour she studies one subject, she gives up an hour she could have used studying the other. And for every hour she spends studying, she gives up an hour that she could have spent napping, bike riding, watching TV, or working at her part-time job for some extra spending money.

Or consider parents deciding how to spend their family income. They can buy food, clothing, or a family vacation. Or they can save some of the family income for retirement or for children’s college education. When they choose to spend an extra dollar on one of these goods, they have one less dollar to spend on some other good.

These are rather simple examples but Mankiw offers some more complicated ones. Consider the trade-off that society faces between efficiency and equality.

Efficiency means that society is getting the maximum benefits from its scarce resources. Equality means that those benefits are distributed uniformly among society’s members. In other words, efficiency refers to the size of the economic pie, and equality refers to how the pie is divided into individual slices.

When government policies are designed, these two goals often conflict. Consider, for instance, policies aimed at equalizing the distribution of economic well-being. Some of these policies, such as the welfare system or unemployment insurance, try to help the members of society who are most in need. Others, such as the individual income tax, ask the financially successful to contribute more than others to support the government. Though they achieve greater equality, these policies reduce efficiency. When the government redistributes income from the rich to the poor, it reduces the reward for working hard; as a result, people work less and produce fewer goods and services. In other words, when the government tries to cut the economic pie into more equal slices, the pie gets smaller.

Principle 2: The Cost of Something Is What You Give Up to Get It

Because of trade-offs, people face decisions between the costs and benefits of one course of action and the cost and benefits of another course. But costs are not as obvious as they might first appear — we need to apply some second-order thinking:

Consider the decision to go to college. The main benefits are intellectual enrichment and a lifetime of better job opportunities. But what are the costs? To answer this question, you might be tempted to add up the money you spend on tuition, books, room, and board. Yet this total does not truly represent what you give up to spend a year in college.

There are two problems with this calculation. First, it includes some things that are not really costs of going to college. Even if you quit school, you need a place to sleep and food to eat. Room and board are costs of going to college only to the extent that they are more expensive at college than elsewhere. Second, this calculation ignores the largest cost of going to college—your time. When you spend a year listening to lectures, reading textbooks, and writing papers, you cannot spend that time working at a job. For most students, the earnings they give up to attend school are the single largest cost of their education.

The opportunity cost of an item is what you give up to get that item. When making any decision, decision makers should be aware of the opportunity costs that accompany each possible action. In fact, they usually are. College athletes who can earn millions if they drop out of school and play professional sports are well aware that the opportunity cost of their attending college is very high. It is not surprising that they often decide that the benefit of a college education is not worth the cost.

Principle 3: Rational People Think at the Margin

For the sake of simplicity economists normally assume that people are rational. While this causes many problems, there is an undercurrent of truth to the fact that people systematically and purposefully “do the best they can to achieve their objectives, given opportunities.” There are two parts to rationality. The first is that your understanding of the world is correct. Second you maximize the use of your resources toward your goals.

Rational people know that decisions in life are rarely black and white but usually involve shades of gray. At dinnertime, the question you face is not “Should I fast or eat like a pig?” More likely, you will be asking yourself “Should I take that extra spoonful of mashed potatoes?” When exams roll around, your decision is not between blowing them off and studying twenty-four hours a day but whether to spend an extra hour reviewing your notes instead of watching TV. Economists use the term marginal change to describe a small incremental adjustment to an existing plan of action. Keep in mind that margin means “edge,” so marginal changes are adjustments around the edges of what you are doing. Rational people often make decisions by comparing marginal benefits and marginal costs.

Thinking at the margin works for business decisions.

Consider an airline deciding how much to charge passengers who fly standby. Suppose that flying a 200-seat plane across the United States costs the airline $100,000. In this case, the average cost of each seat is $100,000/200, which is $500. One might be tempted to conclude that the airline should never sell a ticket for less than $500. But a rational airline can increase its profits by thinking at the margin. Imagine that a plane is about to take off with 10 empty seats and a standby passenger waiting at the gate is willing to pay $300 for a seat. Should the airline sell the ticket? Of course, it should. If the plane has empty seats, the cost of adding one more passenger is tiny. The average cost of flying a passenger is $500, but the marginal cost is merely the cost of the bag of peanuts and can of soda that the extra passenger will consume. As long as the standby passenger pays more than the marginal cost, selling the ticket is profitable.

This also helps answer the question of why diamonds are so expensive and water is so cheap.

Humans need water to survive, while diamonds are unnecessary; but for some reason, people are willing to pay much more for a diamond than for a cup of water. The reason is that a person’s willingness to pay for a good is based on the marginal benefit that an extra unit of the good would yield. The marginal benefit, in turn, depends on how many units a person already has. Water is essential, but the marginal benefit of an extra cup is small because water is plentiful. By contrast, no one needs diamonds to survive, but because diamonds are so rare, people consider the marginal benefit of an extra diamond to be large.

A rational decision maker takes an action if and only if the marginal benefit of the action exceeds the marginal cost.

Principle 4: People Respond to Incentives

Incentives induce people to act. If you use a rational approach to decision making that involves trade offs and comparing costs and benefits, you respond to incentives. Charlie Munger once said: “Never, ever, think about something else when you should be thinking about the power of incentives.”

Incentives are crucial to analyzing how markets work. For example, when the price of an apple rises, people decide to eat fewer apples. At the same time, apple orchards decide to hire more workers and harvest more apples. In other words, a higher price in a market provides an incentive for buyers to consume less and an incentive for sellers to produce more. As we will see, the influence of prices on the behavior of consumers and producers is crucial for how a market economy allocates scarce resources.

Public policymakers should never forget about incentives: Many policies change the costs or benefits that people face and, as a result, alter their behavior. A tax on gasoline, for instance, encourages people to drive smaller, more fuel-efficient cars. That is one reason people drive smaller cars in Europe, where gasoline taxes are high, than in the United States, where gasoline taxes are low. A higher gasoline tax also encourages people to carpool, take public transportation, and live closer to where they work. If the tax were larger, more people would be driving hybrid cars, and if it were large enough, they would switch to electric cars.

Failing to consider how policies and decisions affect incentives often results in unforeseen results.

Paul Graham on Free Speech, Suburbia, Getting Rich, and Nerds

“I think a society in which people can do and say what they want will also tend to be one in which the most efficient solutions win.”

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Paul Graham is a programmer, writer, and investor. His 2004 anthology Hackers and Painters explores not only topics like where good ideas come from but also touches on social and cultural issues such as free speech, getting rich, and geek culture. Here are a few interesting tidbits worth pondering.

Free Speech

I wonder how Graham thinks about this in the context of organizations. Ideas are the lifeblood of organizations, but it seems to me that in certain workplaces, “free speech” is not so free. The best ideas fall to politics, consensus, and pettiness. Suffering from such intellectual corruption dysfunctional behavior results, which causes an ultimately self-correcting spiral into bankruptcy.

I think a society in which people can do and say what they want will also tend to be one in which the most efficient solutions win, rather than those sponsored by the most influential people. Authoritarian countries become corrupt; corrupt countries become poor; and poor countries are weak.

Getting Rich

Graham illuminates how the industrial revolution changed the incentives from corruption to wealth creation as the primary vehicle to getting rich.

Once it became possible to get rich by creating wealth, society as a whole started to get richer very rapidly. Nearly everything we have was created by the middle class. Indeed, the other two classes have effectively disappeared in industrial societies, and their names been given to either end of the middle class. (In the original sense of the word, Bill Gates is middle class.)

But it was not till the Industrial Revolution that wealth creation definitively replaced corruption as the best way to get rich. In England, at least, corruption only became unfashionable (and in fact only started to be called “corruption”) when there started to be other, faster ways to get rich.

Nerds

Highlighting the difference between the popular kids and nerds, Graham writes:

While the nerds were being trained to get the right answers, the popular kids were being trained to please.

Suburbia

In exploring suburbia, Graham looks at how the environment encourages helicopter parenting.

Why do people move to suburbia? To have kids! So no wonder it seemed boring and sterile. The whole place was a giant nursery, an artificial town created explicitly for the purpose of breeding children.

Where I grew up, it felt as if there was nowhere to go, and nothing to do. This was no accident. Suburbs are deliberately designed to exclude the outside world, because it contains things that could endanger children.

Still Curious?

All of the essays in Hackers & Painters: Big Ideas from the Computer Age are worth reading and thinking about.

What History Teaches us about The Concentration of Wealth

History is economics in action, at least according to Karl Marx. Whether in a group or as an individual, we vie for food, fuel, raw materials and our place in the hierarchy. Even art is often rooted in conflict. The remarkable book, The Lessons of History, by Will and Ariel Durant, picks us up at this point:

So the Industrial Revolution brought with it democracy, feminism, birth control, socialism, the decline of religion, the loosening of morals, the liberation of literature from dependence upon aristocratic patronage, the replacement of romanticism by realism in fiction— and the economic interpretation of history. The outstanding personalities in these movements were effects, not causes; Agamemnon, Achilles, and Hector would never have been heard of had not the Greeks sought commercial control of the Dardanelles; economic ambition, not the face of Helen “fairer than the evening air clad in the beauty of a thousand stars,” launched a thousand ships on Ilium; those subtle Greeks knew how to cover naked economic truth with the fig leaf of a phrase.

Unearthing instruction from the economic analysis of the past reveals mistakes that are still made today. The invading barbarians, for example, found Rome weak, in part because the formerly strong and patriotic agricultural population had been replaced with slaves owned by the few. This was a historic version of factory farming — perhaps something necessary — but as Garrett Hardin reminds us you can never do merely one thing. Today we are in a similar reality. The base rate for smaller farms succeeding is not high.

Assuming practical ability differs amongst people, the majority of whatever society values, will always rest with the minority of men. “The concentration of wealth,” write the Durants, “is a natural result of this concentration of ability, and regularly recurs in history.” Compounding and the ability to pass wealth from one generation to another mean that you need not possess skills that are highly valued by society today to live in the wealthy minority. The rate of concentration varies with, among other things, economic freedom, constrained only by morals and laws.

Despotism may for a time retard the concentration; democracy, allowing the most liberty, accelerates it. … In progressive societies the concentration may reach a point where the strength of number in the many poor rivals the strength of ability in the few rich; then the unstable equilibrium generates a critical situation, which history has diversely met by legislation redistributing wealth or by revolution distributing poverty.

According to Plutarch, in the Athens of 594 B.C., “the disparity of fortune between the rich and the poor had reached its height, so that the city seemed to be in a dangerous condition, and no other means for freeing it from disturbances… seemed possible but despotic power.”

Of the Athens of 594 B.C., the Durants write:

The poor, finding their status worsened with each year— the government in the hands of their masters, and the corrupt courts deciding every issue against them— began to talk of violent revolt. The rich, angry at the challenge to their property, prepared to defend themselves by force. Good sense prevailed; moderate elements secured the election of Solon, a businessman of aristocratic lineage, to the supreme archonship. He devaluated the currency, thereby easing the burden of all debtors (though he himself was a creditor); he reduced all personal debts, and ended imprisonment for debt; he canceled arrears for taxes and mortgage interest; he established a graduated income tax that made the rich pay at a rate twelve times that required of the poor; he reorganized the courts on a more popular basis; and he arranged that the sons of those who had died in war for Athens should be brought up and educated at the government’s expense. The rich protested that his measures were outright confiscation; the radicals complained that he had not redivided the land; but within a generation almost all agreed that his reforms had saved Athens from revolution.

The Romans handled it differently.

The Roman Senate, so famous for its wisdom, adopted an uncompromising course when the concentration of wealth approached an explosive point in Italy; the result was a hundred years of class and civil war. Tiberius Gracchus, an aristocrat elected as tribune of the people, proposed to redistribute land by limiting ownership to 333 acres per person, and alloting surplus land to the restive proletariat of the capital. The Senate rejected his proposals as confiscatory. He appealed to the people, telling them, “You fight and die to give wealth and luxury to others; you are called the masters of the world, but there is not a foot of ground that you can call your own.” …  Julius Caesar attempted a compromise, but was cut down by the patricians (44 B.C.) after five years of civil war. Mark Antony confused his support of Caesar’s policies with personal ambitions and romance; Octavius defeated him at Actium, and established the “Principate” that for 210 years (30 B.C. – A.D. 180) maintained the Pax Romana between the classes as well as among the states within the Imperial frontiers.

What can we conclude from this?

We conclude that the concentration of wealth is natural and inevitable, and is periodically alleviated by violent or peaceable partial redistribution. In this view all economic history is the slow heartbeat of the social organism, a vast systole and diastole of concentrating wealth and compulsive recirculation.

Still Curious? Check out The Three Buckets of Knowledge, The Role of Religion and Morality in History, and The Three Lessons of Biological History.

There Are No Called Strikes and Other Lessons You Learn in Business School

Matthew Frederick teams up with Michael Preis to offer some important learnings from the world of business — which isn’t really a discipline in and of itself but rather, as they write in the introduction to 101 Things I Learned in Business School, “a broad field of endeavor encompassing such diverse disciplines as accounting, communications, economics, finance, leadership, management, marketing, operations, psychology, sociology, and strategy.” Here are some lessons gleaned from a trip to business school. (Some of them, at least.)

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A mission or vision statement driven by consensus is probably so watered down it becomes meaningless. Part of the reason this happens is that when you seek consensus you end up with something that no one at the table can disagree with so you don’t really end up saying anything important.

A mission statement describes the current central purpose and goal of an organization, to guide daily decision making and performance.  A vision statement describes what an organization seeks to become, or the ideal society to which the organization seeks to contribute.

When drafting and evaluating potential mission and vision statements, ask if the opposite of a proposed statement is obviously undesirable. If it is, the statement is obviously undesirable. For example, a university mission statement that says the institution “seeks to produce highly effective productive citizens” is unlikely to have any real influence on employees or students, since no university seeks to produce its opposite—ineffective, unproductive citizens. A more meaningful statement will assert that which is truly specific to the organization; it describes what the organization seeks to do that many or most of its peers do not.

This is reminiscent of the approach Ken Iverson took at Nucor: The company needs a specific call to a specific action. Otherwise, you’re wasting everyone’s time with a watered down message.

There are no called strikes.

Billy Beane, who offers compelling insight on making better decisions and avoiding biases,  is quoted in Moneyball to have said “You can always recover from the player you didn’t sign. You may never recover from the player you signed at the wrong price.” This is reminiscent of what Warren Buffett had to say on the same subject: “In investments, there’s no such thing as a called strike. You can stand there at the plate and the pitcher can throw the ball right down the middle, and if it’s General Motors at $47 and you don’t know enough to decide General Motors at $47, you let it go right on by and no one’s going to call a strike. The only way you can have a strike is to swing and miss.” Turns out we can learn a lot about decision making from baseball star Ted Williams and the fictional character Mr. Market, who was invented by Benjamin Graham.

Adding to our knowledge on Feedback Loops, Frederick and Preis distinguish the difference between positive and negative feedback loops.

In a negative feedback loop, the system responds in the opposite direction of a stimulus, thereby providing overall stability or equilibrium. The Law of Supply and Demand usually functions as a negative feedback loop: When the supply of a product, material, or service increases, its price tends to fall, which may lead to raising demand, which will drive the price back up.

In a positive feedback loop, the system responds in the same direction as the stimulus, decreasing equilibrium further and further. For example, a consumer who feels prosperous after making new purchases may end up making even more purchases and take on excessive debt. Eventually, the consumer (Ed. or Government) may face financial ruin and have to make a major correction by selling off assets or declaring bankruptcy (Ed. read A Parable About How One Nation Came To Financial Ruin). Because positive feedback loops restore equilibrium in their own, often dramatic way, it is sometimes suggested that positive feedback loops occur within a larger, if not directly visible, negative feedback loop.

Speaking of The Law of Supply and Demand: It doesn’t always apply.

The Law of Supply and Demand says that if the supply of a given product or service exceeds demand, its price will decrease; if demand exceeds supply, its price will increase. Rising and falling prices impact demand similarly. When supply and demand are exactly equal, the market is at an equilibrium point and acts most efficiently: Suppliers sell all the goods they produce and consumers get all the goods they demand.

Not all products have historically adhered to the Law. When the prices of some luxury or prestige items have been lowered, demand has fallen due to reduced cache. In other instances, rising demand for a product has led to improvements in technology, increases in production efficiency, and the perfection of distribution challenges, all of which have driven prices down. Electronic technologies have tended to follow this pattern.

Experts are not always the best people to solve problems – it’s more about combinatory play — A point not lost on SenecaSteve Jobs and James Webb Young.

Experts are expected to know a lot, but often it is better to know how to organize and structure knowledge than to simply have knowledge. Innovative thinkers don’t merely retain and recite information; they identify and create new patterns that reorganize known information.

When you don’t think about what you’re doing, you tend to promote the best performer to manager, which is often a mistake. Echoing James March, Preis writes:

Employees who excel in one area of business are often promoted to supervisory positions. But in management, one’s achievements are measured through the actions of others. A first-rate lab researcher promoted to lab supervisor, for example, has to coach, mentor, manage, and help other researchers make discoveries—something that may be beyond his or her abilities or interests. Compounding the problem for the organization is that the department no longer has its best researcher making discoveries on the bench.

Contrary to conventional wisdom, the higher one rises in an organization the longer it takes to implement a decision. (The decisions are more consequential, though.)

Front-line managers can effect immediate changes by directly instructing workers. A sales manager can redirect the activities of sales people immediately, and an accounting manager can make immediate changes in bookkeeping practices. At higher levels of an organization, where employees are more concerned with strategic matters, decisions take more time to implement. If the vice president of marketing wishes to change the style of a product being produced, considerable time will be required to engage feasibility studies, explore design alternatives, investigate the technical methods required, and alter manufacturing practices.

Further to this, the higher one rises in an organization the more one must be a generalist. At the front-line level you often only need direct knowledge of specific activities. Managers need a broader understanding in addition to this knowledge, and they are often missing one or the other.

101 Things I Learned in Business School is a good read; however reading The Letters of Berkshire Hathaway (also freely available) is a better way to understand what an MBA should be teaching. This site, after all, wouldn’t exist without the failed education of an MBA.

Recognizing Our Flaws is The Beginning of Wisdom

A short post today that packs a punch.

The liberating power of humility is one we’ve covered before. In fact, it’s a concept that is core to understanding your Circle of Competence. Now Russ Roberts adds to our collection of wisdom with this excerpt from How Adam Smith Can Change Your Life: An Unexpected Guide to Human Nature and Happiness:

As I have gotten older, I have become less confident and maybe more honest. The economy is too complex; we can’t measure the interactions of all its various pieces with any precision. We don’t have enough data, and we don’t understand how things fit together. We are drunks looking for our lost keys under a lamppost not because that’s where we lost our keys but because that’s where the light is. We should be humbler and more honest. Our empirical studies are very imperfect. We often hold the views we do because of ideology and principle. Then we find some evidence that supports those views. We ignore the rest … An awareness of reason’s limits is a caution sign to remind us that we’re not as smart as we think; we’re not perfect truth seekers. We’re flawed. Recognizing our flaws is the beginning of wisdom. Many things look like nails that do not benefit from being pounded. That should induce caution and humility for those with hammers … Humility is an acquired taste. Once you come to like it, it’s a dish best served hot. It’s amazing how liberating it can be to say “I don’t know.”

The Best Non-Fiction Books of 2015: The Year of the Biography

One of my favorite sources of reading material is Tyler Cowen. He’s consistently finding exceptional things that I’ve never heard of. His 2015 non-fiction list is no exception.

If he had to pick four favorites out of this list he would choose Musk, Kissinger, Thatcher, and Genghis Khan. (Also revisit his selections from 2014, 2013, and 2012.)

Here is the entire list (in no order).

Kissinger: Volume I: The Idealist, 1923-1968 by Niall Ferguson.
Cowen calls this a “background on America being screwed up.” We were a little more verbose in a recent edition of Brain Food, writing : “We love everything about this book from the font and the way the pages are laid out to the wonderful content. Niall Ferguson offers a rich look at how Kissinger came to be one of the pre-eminent statesmen of the past 100 years. As good as Ferguson is—and he’s magical—it’s the excerpts from Kissinger that really ignite the fire in my mind. A perfect Christmas gift for the intellectually curious.”

Elon Musk: Tesla, Space X, and the Quest for a Fantastic Future
We’d love to have Musk on The Knowledge Project. If anyone can connect us …

Japan and the Shackles of the Past by R. Taggart Murphy
I’ve heard conflicting opinions on this book and Cowen seems to emphasize the last section, calling it “brilliant on current Japanese politics.”

Mastering ‘Metrics: The Path from Cause to Effect
We have a tendency to jump from cause to effect. This book offers the statistical tools to underpin doing that in system two thinking.

Economics Rules: The Rights and Wrongs of the Dismal Science by Dani Rodrik.
“In this sharp, masterfully argued book, Dani Rodrik, a leading critic from within, takes a close look at economics to examine when it falls short and when it works, to give a surprisingly upbeat account of the discipline.”

The English and Their History by Robert Tombs
“A startlingly fresh and a uniquely inclusive account of the people who have a claim to be the oldest nation in the world. The English first came into existence as an idea, before they had a common ruler and before the country they lived in even had a name. They have lasted as a recognizable entity ever since, and their defining national institutions can be traced back to the earliest years of their history.”

Misbehaving: The Making of Behavioral Economics by Richard H. Thaler
“Self-recommending,” says Cowen.

Guantánamo Diary, by Mohamedou Ould Slahi
The “first and only diary written by a still-imprisoned Guantánamo detainee.”

Genghis Khan: His Conquests, His Empire, His Legacy by Frank McLynn
“Mongol leader Genghis Khan was by far the greatest conqueror the world has ever known. His empire stretched from the Pacific Ocean to central Europe, including all of China, the Middle East, and Russia. So how did an illiterate nomad rise to such colossal power and subdue most of the known world, eclipsing Alexander the Great, Julius Caesar, and Napoleon? Credited by some with paving the way for the Renaissance, condemned by others for being the most heinous murderer in history, who was Genghis Khan?”

Hive Mind: How Your Nation’s IQ Matters So Much More Than Your Own by Garett Jones

Ivan Pavlov: A Russian Life in Science by Daniel P. Todes
“By the way,” Cowen teases, “the whole salivating dog at the bell story is a fiction.”

The Mahabarata, by Carole Satyamurti

The Midas Paradox: Financial Markets, Government Policy Shocks, and the Great Depression by Scott Sumner

Foolproof: Why Safety Can be Dangerous, and How Danger Makes Us Safe
“How the very things we create to protect ourselves, like money market funds or anti-lock brakes, end up being the biggest threats to our safety and wellbeing.”

In Manchuria: A Village Called Wasteland and the Transformation of Rural China by Michael Meyer
In a review of this book in the LA Review of Books, Adam Minter writes: “So long as there have been memoirs, potential memoirists have sought out difficult places in which they might learn about the people and history of the place and — ultimately — about themselves. In one sense, Meyer is no different. In Manchuria is a bet that the desolate plains of northeast China will be more interesting to him and his readers than they are to most Chinese, and even to most residents of Manchuria.”

Schubert’s Winter Journey: Anatomy of an Obsession by Ian Bostridge
“Completed in the last months of the young Schubert’s life, Winterreise has come to be considered the single greatest piece of music in the history of Lieder. Deceptively laconic—these twenty-four short poems set to music for voice and piano are performed uninterrupted in little more than an hour—it nonetheless has an emotional depth and power that no music of its kind has ever equaled.”

Bewilderments: Reflections on the Book of Numbers by Avivah Zornberg
More of Zornberg’s award winning commentary on the Torah.

North Korea Confidential: Private Markets, Fashion Trends, Prison Camps, Dissenters and Defectors by Daniel Tudor and James Pearson,
Insight into how things work there.

The Gates of Europe: A History of Ukraine by Serhii Plokhy
A good understanding of Ukraine’s storied past.

Hun Sen’s Cambodia by Sebastian Strangio
Cowen writes this “goes deep into a place most people are ignoring.”

The Almost Nearly Perfect People: Behind the Myth of the Scandinavian Utopia
“Journalist Michael Booth has lived among the Scandinavians for more than ten years, and he has grown increasingly frustrated with the rose-tinted view of this part of the world offered up by the Western media. ”

Black Earth: The Holocaust as History and Warning by Timothy Snyder
“A brilliant, haunting, and profoundly original portrait of the defining tragedy of our time.”

Who is Charlie: Xenophobia and the New Middle Class by Emmanuel Todd
“In the wake of the attack on the offices of Charlie Hebdo in Paris on 7 January 2015, millions took to the streets to demonstrate their revulsion, expressing a desire to reaffirm the ideals of the French Republic: liberté, égalité, fraternité. But who were the millions of demonstrators who were suddenly united under the single cry of ‘Je suis Charlie’?”

Landmarks by Robert MacFarlane
“How to talk, think, and write about the British countryside,” Cowen offers.

The Invention of Nature: Alexander von Humboldt’s New World
The foundations of modern environmentalism. He changed the way we see the world.

The Iran-Iraq War by Pierre Razoux
“From 1980 to 1988, Iran and Iraq fought the longest conventional war of the twentieth century. The tragedies included the slaughter of child soldiers, the use of chemical weapons, the striking of civilian shipping in the Gulf, and the destruction of cities. The Iran-Iraq War offers an unflinching look at a conflict seared into the region’s collective memory but little understood in the West.”

Margaret Thatcher: At her Zenith: In London, Washington, and Moscow, vol.2 of the biography, 1984-1987 by Charles Moore.
“This one I haven’t finished yet,” Cowen writes. “I ordered my copy advance from UK Amazon, it doesn’t come out in the U.S. until early January. There is some chance this is the very best book of the year.”