03 March 2011

Book Review

The Price of Everything by Eduardo Porter

When I started reading this book, I immediately thought that this would be more basic than I originally anticipated.  As I read on, it quickly became clear that my initial assessment was way off.  In fact, the book is quite profound in its implications.

As can be gathered, The Price of Everything (henceforth Price), starts off with a very basic introduction to price.  While Porter does not come out and say it, it is clear that he holds to two fundamental axioms of price theory:  value is subjective, and price is determined by supply and demand.  These two concepts are key to understanding price.

From there, Price explores the price and value of a human life. Unsurprisingly, this is an impossible task.  In addition, all attempts to provide some objective metric of value have fallen short, because the nature of value is a natural extension of a large variety of variables, all of which have different weightings.  Trying to figure out not only which variables are relevant but how they should be weighted is indeed a Herculean task.  As Porter notes, this issue will never be resolved.

After that, Price concerns itself with the price of happiness, a slippery measure indeed.  Some light is shed on this subject, for once Porter strips away all the wasted ink surrounding the subject of happiness, a one thing is made crystal clear:  money can buy happiness, but only up to a certain point.  This explains why Europeans are more satisfied with their lives than Americans.  They work just enough to live comfortably, and then spend their extra time doing things that they enjoy.  Americans, in contrast, are workaholics who have considerably less free time, which is generally spent doing inconsequential things.

Porter next focuses on the price of women.  For those who are familiar with Roissy, most of what is contained in this chapter will seem old hat.  Porter observes that polygamy leads to social disparity, reducing or erasing the bonds of social cohesion.  We can see that sort of thing happening here in America today.  There is much more, but most of that is already thoroughly discussed in the blogosphere.  It is nice to see these concepts be recognized by the mainstream, though.

Price then concerns itself with the price of labor, starting with slavery and then moving on to pay disparity in modern America.  Most of the ruminations, at least to the uninitiated, will be perceived as socialist bunk.  They probably are, but it is important to note that Porter recognizes that equity in wealth and pay is helpful for assuring social cohesiveness.  When there are large disparities, like, say, when bankers get billions in bailouts while receiving millions in bonuses, social cohesion starts to break down.  Events of the last three years support this observation.  One of the things that unfortunately goes unsaid in this chapter is how the pay disparity in recent years is a function of government interference.

The price of free is next for consideration, and is a largely disappointing chapter dealing with intellectual property rights.  Porter approaches the issue from utilitarian grounds, and comes to the inspiring conclusion that sometimes pirating helps artists, sometimes it hurts them.  Obviously, there needs to be some sort of overhaul, but not necessarily elimination.  Funnily enough, the abolition of property rights would not necessarily lead to a utopia for writers and musicians.  It would lead to a utopia for fans, but not necessarily for those who actually create.  This is disappointing, but not altogether unexpected.

The final third of the book is somewhat weak.  The strongest chapter is sandwiched by two awful chapters, and at times made me want to give up.  Porter simply mangles the discussion on culture, by trying to be sympathetic to various cultures while pointing out there faults. It’s a difficult thing to attempt, so it should come as no surprise that he fails. His discussion of the price of the future, particularly as it relates to global warming, suffers from vagary.  There is simply not enough data to tell us what to do about global warming.  And even if there were, I would be willing to bet that we are pretty much doing what needs to be anyway.  In all, this chapter is vague and middling.

The penultimate chapter is about the price of faith.  This is the strongest and most interesting part of the book, and, in my humble opinion, makes it worth the purchase price.  The one key concept, something worth dwelling on extensively, is that the more demanding a given religion is, the more adherents it will have and the more faithful they will be.  This, in part, explains why fundamentalist Christianity is so popular in America, among other places, especially among the poor.  If one looks at the basic tenets of signaling theory, one will find that high religious standards are effective because they signal solidarity, helping to inspire greater trust among the members.  The more faithfully one adheres to the tenets of their faith, the more one can be assured of acceptance and all the blessings that entails.

The book then concludes with price (or, more accurately, market) failure.  Porter treats readers to an analysis of the market crash of 2008, and attempts to explain how and why prices failed.  The explanation should seem suspect to astute readers, because it was not prices that failed.  Rather, it was government caused distortion that was the problem.  This is the only major analytical error in the book, but it can be forgiven because Porter is trying to stay relevant and stick to a theme, which is oftenquite tricky.

In sum, the book is a mostly easy read, and packed with much insight.  There are times when it bogs down, and some analysis seems to be irrelevant or plain wrong.  On the whole, readers will find that the good in this book far outweighs the bad.

1 comment:

  1. Thanks for the review. I'll definitely check it out.