How economists use their subject's frameworks to unravel our messy lives

Three new books use economics to decode behaviour, war and nature - revealing both the power and the limits of economic thinking in explaining our messy world

Nick Summers

 

Everyone sounds smarter when they argue in the language of economics. Is it a costly giveaway to make city buses free? Well, not if you calculate the positive externalities. Will adding new lanes to a highway make traffic flow better? Let me tell you about induced demand. 

It’s seductive, this ability to make byzantine phenomena appear as orderly, rule-bound systems, magically conforming to the logic of supply and demand. Three new books apply an economist’s lens to notably messy aspects of our lives — from individual behaviour to war and nature. 

The “nudge” school of behavioural economics shot to prominence in 2008 with a book of that name by Cass Sunstein and Richard Thaler. (Thaler went on to win a Nobel Prize) Their theory: Policies that encourage — or nudge — people to make good choices can succeed better than legislative decrees. 

In It’s On You: How Corporations and Behavioral Scientists Have Convinced Us That We’re to Blame for Society’s Deepest Problems, the idea gets a thorough takedown. Loewenstein — another foundational figure in behavioural economics — and his co-author Chater, a professor of behavioural science, persuasively argue, that nudges aren’t just ineffective but harmful, distracting us from badly needed systemic reforms. The “mere existence of the Band-Aids,” they write, “decreases support for the types of policy changes that could really turn around the problem. The very possibility of nudging the players makes us forget that we need to fundamentally change the game.” 

On issue after issue, from pollution to opioids to guns, the authors demonstrate that skilful corporate interests have executed a masterly sleight of hand, reframing systemic problems as the fault of individuals. (Classic examples include the peerlessly nihilistic slogan “Guns don’t kill people; people kill people.”) By championing the false idea that each of us can make small changes to achieve big impact, nudge theorists have played right into these special interests’ hands. 

In Blood And Treasure: The Economics of Conflict From the Vikings to the Modern Era Duncan Weldon, a British journalist and economist, offers a tour of organised violence from the Viking era to the war in Ukraine, reinterpreting the actions of Mongol raiders and Indian sepoys through economic concepts like principal-agent problems and non-price competition. 

Weldon tries to make his lessons counterintuitive and surprising. Some of these up-is-down exercises are convincing, like an examination of how the Luftwaffe’s system for publicly lauding its best fighter pilots ultimately got more of pilots killed.

Yet the book’s basic conceit — What if I told you that war was driven by money? — will not be a revelation to the average tot in a pirate costume with a sabre in one hand and a fistful of booty in the other. 

The economics of the most consequential destruction of all — the environmental devastation of our planet — is the subject of On Natural Capital: The Value of the World Around Us. Partha Dasgupta is an emeritus professor of economics at Cambridge who was made a Knight Grand Cross by King Charles III for “services to economics and the natural environment.” But New York Times readers might remember him better from a 2023 video, narrated by the Swedish actor Alexander Skarsgard, hailing Dasgupta as “the most important person you’ve never heard of” and explaining how the concept of gross domestic product is flawed. 

Or, as Dasgupta puts it in his book, “The grammar we have created to understand societal progress is misleading.” 

The old way of thinking might have us look at, say, a shrimp farm in a developing country and see a trade-off: economic upside and a sad impact on nearby mangrove swamps. Dasgupta would have governments actually measure the damage. 

The book is meticulous, persuasive and all but unreadable. Here he is describing a basic human emotion: “An individual’s ‘personal well-being’ — some call it ‘happiness’ — is gleaned from an ‘inner-directed viewpoint.’ It is the extent to which a person’s informed desires are realized, and that ‘extent’ can be represented numerically.” 

The jargon is on purpose. Dasgupta says in his preface that “my reader is someone willing to work hard with me.” But that’s dismaying since his claim is urgent and should be studied in detail by policymakers, but using economics to parse our dirty world is a skill, and its advantages should be intelligible to us all. 

The reviewer is the former Sunday Business editor at The New York Times  ©2026 The New York Times News Service