Best Books of 2012

In order of quality (best first):

1. The Dictator’s Handbook: Why Bad Behavior is Almost Always Good Politics (published 2011) by Bruce Bueno de Mesquita and Alastair Smith. The best book about political science I have read. A leader always needs supporters. The essential difference between dictatorships and democracies is how many. Full of data and examples that this view — the whole theory is a bit more complicated — explains. Econtalk interviews.

2. Antifragile: Things that Gain From Disorder by Nassim Taleb (copy sent me by author). Full of original ideas. It  may be unprecedented that a serious thinker so anti-establishment has so loud a voice. Much of the book is about a generalization of hormesis, the observation that a small amount of Treatment X can be beneficial even though a large amount of Treatment X is deadly. For example, a small amount of smoking is probably good for you. Taleb goes beyond this to say that in some things, the hormetic benefit (the benefit from small amounts) is much larger than in other similar things. You can fulfill the same function (governance, banking, science) with a system where the entities benefit a lot from small shocks (which Taleb calls “anti-fragile”) or a system where the entities benefit not at all from small shocks. Systems where small shocks cause benefits tend to suffer less when exposed to large shocks. In my personal science, I have benefited a lot from day-to-day changes in my life (e.g., it led me to discover that butter improves my brain function and flaxseed oil improves my balance). In large science, day-to-day variation is only harmful. The core idea is that hormesis-like dose-response functions exist outside of the drug/poison/mice/rat/health experiments in which they were discovered.

3. Confessions of a Microfinance Heretic: How Microlending Lost Its Way and Betrayed the Poor by Hugh Sinclair (copy sent me by publisher).  By “microfinance” he means microcredit. Sinclair convinced me that the belief that microcredit is a wonderful thing for poor people is one of the big delusions of our time. It is a wonderful thing only for the institutions that give it out (at exorbitant interest rates, usually). Sinclair sums it up like this (pp. 217-8): “Give a man a fish and he’ll eat for a day. Give a woman a microcredit loan to buy a fishing boat, and the CEOs of the MFI [microfinance institute] and the microfinance funds will eat for a lifetime.” Sinclair continues: “There is too much at stake [for the CEO’s] to allow any genuine scrutiny.”

3 Replies to “Best Books of 2012”

  1. It seemed to me early on that the administration work of microcredit as originally conceived was very time-consuming and could only be done as a charity. This means that trying to make a profit (or perhaps even a living) at offering microcredit turns it into money-lending.

  2. Seth, I am now very envious of you as you received a copy of Anti-Fragile from Nassim Taleb, who is likely my favorite living author. I missed the opportunity for a signing in D.C.

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