Gittinomics: Living the good life without money stress, overwork and joyless consumption

Gittinomics: Living the good life without money stress, overwork and joyless consumption
Ross Gittins | 2007-01-02 00:00:00 | Allen & Unwin Pty LTD | 264 | Economics
For everyone who knows economics is important but doesn't really know why, Gittinomics is the indispensable, plain-speaking, entertaining and highly relevant guide to the economics of our everyday lives.
Reviews
Ross Gittins has a mission. He wants to help you, the reader, understand the economy, as you would expect from an economics columnist. But that is not all. He also wants to "do what economics is supposed to do: help you maximize your utility."



This is a bold statement. Economists tend to assume that people know their own business best. Advice to individuals outside the policy arena is usually limited to "there's no such thing as a free lunch".



No longer. Now we have crossed the final frontier: the economics self-help book. Gittins embraces this label, seemingly without realizing how big a change it represents. We already have the `Dear Economist' column in the Financial Times. Are we going to end up with Dr Tim or Dr Ross next to Dr Phil and Oprah?



Or perhaps that should be the Reverend Ross. The son of a preacher man, he is not averse to laying down the law. We spend too much time chasing wealth and status (and watching TV) and too little time with our friends and family. An old message, but one which has been reinforced by the latest wave of happiness research. He is on fairly solid ground here, although the most overworked factoid of this literature - that Americans' self reported happiness has not risen since the 1950s despite a doubling of per capita income - could equally well be used as an argument against desegregation or legalised abortion.



He overreaches, however, when claiming that things are not only bad but getting worse - that we are living in an age of "hyper" or "heightened" materialism. He complains about "how much harder and longer so many of us work these days", even after quoting statistics showing that the longer work week only affects a small minority of workers, most of whom are happy with their hours, and that the trend has leveled off since 2000. His only hard evidence is the work of David Myers, who showed that American students and workers have become more focused on money in their education and career choices. Given increasing inequality, this is perfectly understandable without any change in values (the flower power generation grew up with full employment and rising wages as a rather boring given).



And assuming that people do not always know their own business can lead to some strange positions. Gittins is happy to maintain the most transparent illusions in the tax system - a Medicare levy that does not come close to paying for Medicare, and tax cuts that barely give back bracket creep. The geese do not hiss so loudly that way, as Colbert might have said. But if one believes that the geese are happier with `milkshake and sandwich' tax cuts rather than CPI indexation, it seems rather ambitions to urge the same barnyard fowl to take control of their destiny, throw off their materialist delusions, and embrace the simple life. This is the real dilemma of behavioural economics: Does one educate people to make better decisions, or demand that government policy exploit our cognitive biases (in our own best interests, of course)?



The book does have a wealth of information on recent trends in work, housing, and demography, and some sensible recommendations for both public policy makers and private individuals (unify public health spending in regional authorities, don't pay HECS up front, get a low interest credit card with no frills if you don't pay off your debt each month). In the end, though, I suspect that Gittins is preaching to the choir. Those who do not already share his beliefs are unlikely to be convinced by Gittinomics. They are probably working too much unpaid overtime to even read it.



Economic Record December 2007
Reviews
Ross Gittins has long been one of my "must-read" Sydney Morning Herald columnists, and this gives more of his wise insights into economics. What I love about Gittins is that money is never the be-all-and-end-all: he looks at how decisions made impact society as a whole and people's quality of life. We need more columnists, and particularly economic columnists, like him.

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