First few pages in the book titled, ‘The Economics of Small Things’ are dedicated to capturing our attention with the run-of-the-mill issues: a chai drinker in Assam wonders why the best tea in the state is exported rather than left for the consumption of the local population; a breakfast enthusiast ponders why so many brands of oats manufacture the similar tasting masala oats; another atheist noticed that while his driver fails to secure himself with the seatbelt, he never failed to bow his head and mumble a silent prayer every time their car passes a temple, and finally an occurrence that has baffled us as well- why does no one claim the last piece of pizza or cake at a social gathering?
The author Sudipta Sarangi delivers exactly what he promises: Economic rationale to explain the seemingly irrational, common-day behaviour. His explanations are deceptively simple and yet ingenious applications of economic theories. One of the most interesting instances discussed in the book is related to a driver’s aversion to wearing the seatbelt. He uses the application of repeated games to explain that the driver is entrusted with a set of choices (a combination of wearing the seat belt and praying to God) to achieve longevity in life. The game-theoretic equilibrium described in the book can be useful to frame an argument about people who adamantly refuse to wear masks during the Covid-19 pandemic.Another interesting discussion concerned the export of the best quality mangoes abroad. His description of missing mangoes when in the US - “Just the thought of sinking my teeth into a ripe mango, juice running down my chin and fingers, makes my mouth water!” – hilariously echoed mine and our fellow graduate students’ bittersweet memories of mango-less summers in the US as well. He goes on to explain why Alphonso- the king of mangoes and the best that India has to offer- was the only variety to be found at the ethnic grocery stores in the US. The anecdotes are personal, thought-provoking and insightful.Moving to a different continent, the author, yet again, successfully arrests our intrigue by bringing forth a story of cops who nabbed a group of thieves for stealing only the left footwear on the display from the shopfronts in Sweden. While I deliberately desist to answer this mystery, the chapter proceeded to explain the meaning of complementary goods (taught in Economics 101) and the relevance of simultaneous investment in complementary sectors of the economy. This smooth segue made me appreciate the book’s capacity to take the reader on a journey. The book offers some more learnings to its audience and its relevance grows in the wake of a pandemic. For example, how adding a picture to one’s resume can benefit the candidate in distinguishing himself in a competitive labour market, or why paying one’s domestic help more than the market wages can ultimately cost the employer less money?I was intrigued by the author’s thought process as I found myself drawing parallels with Richard Thaler, one of the founding fathers of behavioural economics and the author of Nudge. Richard Thaler has often attributed the commencement of nudge theory to an incident at the party at his house. The guests, while waiting for the food to be served, were relishing heavily on a bowl of cashews. Dr Thaler, realising that excessive consumption will diminish their appetite for dinner, removed the bowl from the party. The guests thanked him. This led him to question an important assumption in the classical economic theory: are more choice really better? This is also incidentally the name of one of the chapters in the book.
The author as an economist makes a daring and brilliant attempt to explain the nuances of economics in everyday phenomenon to a broader audience without the use of equations, tables and figures. Besides this, the author never misses the chance to spring humour on his readers. This makes The Economics of Small Things an easy recommend. To a fellow economist, the book leaves us inspired to search for more economics in our life, and that is no small feat.
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Source: Outlook India
Writer: Payal Seth
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