Facebook YEAR OF BOOKS live Q&A with authors of “Portfolios of the Poor”

Collins jacketPortfolios of the Poor: How the World’s Poor Live on $2 a Day by Daryl Collins, Jonathan Morduch, Stuart Rutherford & Orlanda Ruthven is a recent choice by Mark Zuckerberg for his Year of Books project. An unusual investigation of the staggering problem of global poverty, the authors conducted year-long interviews with impoverished villagers and slum dwellers in Bangladesh, India, and South Africa. This morning the authors are taking part in a live Q&A on the Year of Books Facebook page to share the surprising and systematic methods these families used to survive on an income that is, for many, unimaginably small.

Mark Zuckerberg announced the book’s selection on his personal Facebook page with the following thoughts:

It’s mind-blowing that almost half the world — almost 3 billion people — live on $2.50 a day or less. More than one billion people live on $1 a day or less.

This book explains how these families invest their money to best support themselves.

I hope reading this provides some insight into ways we can all work to support them better as well.

You can follow the discussion here.

Paul Krugman hosting free discussion at Cooper Union with authors of THRIVE

Thrive jacketTonight, Nobel-prize-winning economist Paul Krugman will host a free public discussion at Cooper Union with Richard Layard & David M. Clark, co-authors of Thrive: How Better Mental Health Care Transforms Lives and Saves Money. Richard Layard discussed the book with Tom Keene on Bloomberg Surveillance here, and both authors answered some questions on mental health policy for the PUP blog here.

Mental illness is a leading cause of suffering in the modern world. In sheer numbers, it afflicts at least 20 percent of people in developed countries. It reduces life expectancy as much as smoking does, accounts for nearly half of all disability claims, is behind half of all worker sick days, and affects educational achievement and income. There are effective tools for alleviating mental illness, but most sufferers remain untreated or undertreated. What should be done to change this? In Thrive, Richard Layard and David Clark argue for fresh policy approaches to how we think about and deal with mental illness, and they explore effective solutions to its miseries and injustices.

Richard Layard is one of the world’s leading labor economists and a member of the House of Lords. He is the author of Happiness: Lessons from a New Science, which has been translated into twenty languages.

David M. Clark is professor of psychology at the University of Oxford. Layard and Clark were the main drivers behind the UK’s Improving Access to Psychological Therapies program.

Paul Krugman is an author and economist who teaches at Princeton, the London School of Economics and elsewhere. He won the 2008 Nobel Prize in economics. He is also an Op-Ed columnist for the New York Times.

September 29, 2015 @ 6:30 pm – 9:30 pm
The Great Hall
Foundation Building
7 E 7th St, New York, NY 10003

Please RSVP here.

Behind every meal you eat, there is a story

Louise Fresco, president of Wageningen University and Research Centre in the Netherlands and author of Hamburgers in Paradise, talks about that story here:


An interview with Louise Fresco on “Hamburgers in Paradise”

Fresco JacketIn Louise Fresco’s new book, Hamburgers in Paradise, the term “Paradise”, in her own words, is “a metaphor that refers to the landscapes on our planet, the collective Garden of Eden which, according to some views, we have irreversibly destroyed through large scale food production.” It is a view shared by many in a world simultaneously plagued by food shortages and GMO fears. In such a climate, is there room for optimism? Fresco looks at our food situation in all its complexity, taking the stance that there is no one perfect way to produce or consume food, and that balance and trade-offs between different goals are central to any long term solution. You can see her TED talk here, and the English subtitled version to a documentary she made about the food industry here. Recently Fresco took some time to answer some questions about her book.

What’s new in this book?

LF: Human history has been one of continuous scarcity. The abundance of food that has emerged for the majority of the world population in the last decades is so unique that we have not yet learnt to deal with it. We are still scared that there will not be enough, and that we will destroy our environment. Scarcity is our default mode, and that of our bodies, hence our difficulties to balance our diets and to reduce our ecological footprint. Abundance is a triumph of science and trade; it allows us to shed our fears of shortages. But the book argues that we require new ways of thinking, to reign in our needs (for example of meat) while producing food sustainably for all, with new methods (for example through recycling or using algae). The book demonstrates in detail that there is not one perfect way to produce and consume food, but that we always have to balance the trade-offs between different goals, such as large scale production (i.e. low food prices) and biodiversity. What is best depends on our goals and our insight in unintended side effects (we may like to see free roaming chickens but they may be more prone to disease that way).

Can you explain the title Hamburgers in Paradise?

LF: The title refers to a thought experiment: if Eve were alive today, what food would she offer Adam as a temptation? Paradise as a metaphor also refers to the landscapes on our planet, the collective Garden of Eden which, according to some views, we have irreversibly destroyed through large scale food production. These semi-conscious images of a pre-Industrial and idealized past are still guiding many of our reactions to modernization. The hamburger, of course, is the iconic food that symbolizes the rise of the modern middle class, from suburban America to places like Moscow or Mumbai, as well as the critical counterforces: slow food, vegetarian and organic products. The hamburger illustrates also the adaptation to new demands: fat and salt contents have been lowered, information on calories and nutritional values are published, wrappings are made of recycled materials and advertising to children is limited. In the most recent twist of history, the hamburger becomes popular once again in upper class restaurants, dipped in liquid Nitrogen, or in a vegetarian reincarnation.

Food is the source of much confusion today, we hear so many, contradictory stories about what we must or mustn’t eat and why. What is the reason for this confusion?

LF: Food and agriculture are the basis human survival. Food conjures up strong feelings, based on individual memories, strict convictions and long traditions, especially in times of rapid modernization. Many people, even in rural areas, are hardly aware of how food is really produced and how it lands on their plates. Nearly all of us rely on others, often far away, to feed us. Ignorance and dependency make us feel vulnerable and worried about food.

But we can also turn this around: behind every meal there is a story, one that is nearly always fascinating and often complex, but always worth telling. Food connects us with the past and the future.

Is there room for optimism?

LF: With current knowledge, we can feed nine or ten billion people quite easily. This doesn’t mean that there is no world food problem. Even if enough food can be produced this is not easy and more production does not mean food reaches people automatically. The current gap between actual and attainable yields is still enormous. At the same time, agricultural research and innovation continue to be needed to tackle specific problems of animal and plant diseases, poor soils and climate variation. The application of existing knowledge is hampered by poor infrastructure, unavailability of irrigation or fertilizer, dysfunctional markets and policy.

Food shortage is more a matter of distribution than just production. Hunger is caused by poverty, so creating employment is essential. The great improvements in agricultural production since the 1970s have benefitted the urban poor more than the rural poor. These improvements involve higher yields, through better agricultural techniques such as irrigation, leading to lower food prices that benefit those who buy food (those living in cities), while farmers selling foods are at a disadvantage. Today more than 850 million people go hungry and perhaps as many as 2 billion may lack balanced nutrition. Most of the hungry live in areas of civil war or frequent natural disasters, so peace and resettlement are priorities.

There seems to be much concern about Genetically Modified Organisms, is this concern justified?

LF: This is a very complex issue about which it is impossible to generalize and about which there are many misunderstandings. For example, if cows are fed genetically modified soy bean, their milk does not become genetically modified, even if some people fear this. The modified genes and cells do not survive the gut. What the effects and risks are depends very much on what crop or animal, what genes are used for what purpose and where. Certain problems, for example diseases in banana, can only be tackled with biotechnology, a large toolkit which does not necessarily result in GMOs. There are two types of risk, for human and animal health. While we need to continue to monitor the situation, there are no indications that GM crops lead to additional food related risks in human beings or animals. So far, there are no indications of environment effects (such as insect mortality or genes “escaping “), but ecosystems are complex and difficult to monitor. Finally, there is also the issue of intellectual property rights: while a fair reward is needed for the companies developing the biotechnology or GMOs, we must also make sure that farmers and scientists and breeders elsewhere can keep access to varieties or breeds. Here the U.S. and EU legislation and traditions do not coincide.

What about chemical inputs such as fertilizer. Are we not destroying the land?

LF: Plants and animals need food just as we do. These nutrients come nearly exclusively from the soil (and through water, transported from soils elsewhere). Only very few soils can sustain production for long periods and their nutrient reserve needs to be built up through other sources of nutrients. Whilst manure from animals can be used for this, this does not solve the problem, it just means that animals have to graze somewhere from where they take up the nutrients. Almost without exception agriculture requires fertilizer to be sustainable. Fertilizer has a bad name mainly because it has been overused in the past with detrimental effects on surface water, but in itself, if wisely used, it is a blessing. More land is depleted through lack of fertilizer than is affected through its use.

Is fast food the source of all evils?

LF: Fast food is part of a complex process of transformation of society: greater mobility, work pressures, urbanization, diversification through trade, smaller and singe households, greater affluence of young, ubiquitous equipment like microwaves and fridges people all lead to out of home eating and pre-packed meals. As with all foods, it is not the individual item that is “bad” but the pattern. Eating fast food from time to time is acceptable in an otherwise healthy lifestyle. However, fast food often contains too many calories and we should be concerned if there are no other options, In so-called food deserts, neighbourhoods devoid of shops selling vegetables, fast food is often the recourse for single parents.

What type of agriculture is most sustainable?

LF: There is no blueprint for an agricultural model that fits all situations. Agriculture is the art of the location-specific and always depends on soils, climate, geography, culture and economics. Agriculture is forever changing, adapting to new consumer demands and new technology. However, using resources as efficiently as possible is essential to avoid wasting labour, water, land, fertilizer, seeds or animals as well as reducing post harvest losses in the entire value chain. Efficiency is often misunderstood as large-scale and anonymous, but it applies at all scales. No farmer can afford to waste resources, nor can we as humanity. The World will need 50% more calories in 2030.

Would the world be better off if all meat would be prohibited?

LF: No, meat is necessary for certain groups such as pregnant and lactating women, children, the elderly and sick and of course the malnourished. Meat is not only a source of proteins but also of essential nutrients such as iron and certain vitamins (B12). Humans evolved as omnivores; vegetarians, even in India, have always been a small minority. Also, there are areas in the world where nothing else can be produced but grazing land and animals. The growth in demand for meat and fish is expected to increase faster than the growth in population, especially in Asia and Africa.

However, there are major problems associated with meat production: environmental (water, emissions, production and transportation of feed) veterinary public health, human health (diseases associated with high red meat intake and overuse of antibiotics) as well as animal welfare. These can all be solved with adequate research and regulation. Reducing meat consumption through substitution of animal proteins in healthy individuals in affluent societies is part of that.

Louise O. Fresco is president of Wageningen University and Research Centre in the Netherlands. The author of several books, she is a member of the Council of Advisors for the World Food Prize and has worked extensively in developing countries for many years. She lives in Amsterdam.

Mark Zuckerberg chooses “Portfolios of the Poor” for A Year of Books

Collins jacketMark Zuckerberg is spending a year reading books and is inviting others to join him. The latest pick for A Year of Books, just announced, is Portfolios of the Poor by Daryl Collins, Jonathan Morduch, Stuart Rutherford, and Orlanda Ruthven. Over 250 families in Bangladesh, India, and South Africa participated in this unprecedented study of the financial practices of the world’s poor. In selecting a story of life very bottom of the global economic order, Zuckerberg seems to suggest the particular importance of empathy for entrepreneurs and those in leadership positions.

“It’s mind-blowing that almost half the world — almost 3 billion people — live on $2.50 a day or less. More than one billion people live on $1 a day or less. This book explains how these families invest their money to best support themselves. I hope reading this provides some insight into ways we can all work to support them better as well,” he wrote on his personal Facebook page.

So far there have been 17 books chosen, and this is the third Princeton University Press title to make the list. Rational Ritual by Michael Chwe, and The Muqaddimah by Ibn Khaldun were chosen earlier this year.

Congratulations to the authors!

You can find more information on the website for Portfolios of the Poor here. A sample chapter is available here.

Martin Sandbu talks euro scapegoating and his new book “Europe’s Orphan” with the Financial Times

Has the euro  been wrongfully scapegoated for the eurozone’s economic crisis? In his new book, Europe’s Orphan: The Future of the Euro and the Politics of Debt, leading economist Martin Sandbu says that it has, arguing that the problems lie not with the euro itself, but with decisions made by policymakers. Sandbu was recently interviewed by Martin Wolf, Financial Times chief economics commentator. You can watch the video here:

Ready for football? Remembering the first game between Princeton and Rutgers

It’s that time of year again! The air is saturated with the promise of cooler days ahead, the leaves are holding their breath, and school is nearly back in session. And that means one thing. Football season will soon be here. More specifically, college football. Princeton, as I’m sure you know, has quite the legacy in this area—dating back almost a century and a half.

To be precise, that legacy dates back all the way to November 6th, 1869: The day of the first official collegiate football game played between Rutgers and Princeton (then called The College of New Jersey).


Back then, the game was really a hybrid combining elements of rugby and modern-day soccer. Each team consisted of 25 players struggling to kick the ball into the opposing team’s territory. Reportedly, a mere 100 spectators gathered to watch the game, many of them sitting on a wooden fence. The players took the field, removing their hats, coats and vests in preparation for play. Speaking of attire, some believe that the “Scarlet Knights” nickname for Rutgers came to be at this game. To differentiate themselves from Princeton, some players sported scarlet-colored scarves, worn as turbans. Thus, the Scarlet Knights were born. Alas, Rutgers defeated Princeton that day, 6-4. Six to four you ask? That’s right. Even the score-keeping method was different back then.

What a far cry from college athletics today, especially football. If you’ve ever been to a college football game (especially a Division 1 game), you know what I’m talking about. In 2011, many colleges including Michigan, Ohio State, Alabama, and Texas, had over 100,000 fans in attendance at their games. Stadiums practically ooze their team’s colors and the roar of the crowd is deafening. Music pumps through unseen speakers and there are always a few dedicated fans that choose to doff their shirts in favor of painting their team’s colors and/or letters onto their bodies. Who's #1? The Science of Rating and Ranking

People take their college football very seriously these days. There are all different types of divisions, championships, and rankings that decide when and where they get to play. The ratings of the NCAA determine which schools get to play for all the marbles in postseason bowl games. Amy N. Langville and Carl D. Meyer discuss these types of ranking systems in their book Who’s #1?
The Science of Rating and Ranking.

The major differences between college sports in the 19th century and college sports today are significant. College athletics have become an integral part of the community of higher education and of society as a whole.

Gaming the World But the nature of college sports today are troubling to some. On the one hand, college athletic programs serve to bring communities together and unite people who otherwise wouldn’t share any common ground.  In Gaming the World  Andrei Markovits and Lars Rensmann reflect on and explain how sports influence our daily lives and help to confirm a certain local, regional, and national identity. These programs also promote health and wellness at colleges nationwide, which benefits students.

But on the other hand, many colleges and universities, in their constant need to compete with other institutions, sometimes redirect funds and other resources toward football or basketball while the academic side of the institution is forced to manage without those funds.

In addition to the funding problem, there is also an “underperformance” problem. In Reclaiming the Game, William Bowen and Sarah Levin explore the academic experiences of college athletes and oReclaiming the Gamether students. In one of their studies they’ve found that recruited athletes at some schools are four times more likely to achieve admission than are other students (non-athletes) with similar academic qualifications. They also show that the typical recruit is more likely to end up in the bottom third of the college class than are other students and non-athletes.

It’s safe to say that the feverish fandom of college athletics can either boost or take away from the institution itself and the college experience. What’s your opinion on the matter?

Beautiful Game Theory: How Soccer can Help EconomicsIf the impact of sports is a topic that interests you, and you’re intrigued by unusual applications, also check out Ignacio Palacios-Huerta’s Beautiful Game Theory. Palacios-Huerta uses soccer as a lens to study game theory and microeconomics, covering such topics as mixed strategies, discrimination, incentives, and human preferences. Palacios-Huerta makes the case that soccer provides “rich data sets and environments that shed light on universal economic principles in interesting and useful ways.”

PS: Not to worry, Princetonians – we didn’t make a habit of losing to our northern neighbor. On May 2nd, 1866, in the first intercollegiate athletic event in Rutgers history, the Rutgers baseball team lost to Princeton, 40-2. Quite the slaughter! And Rutgers may have ended up winning the first football game 6 to 4, but a week later Princeton won the next match at home, 8 to 0.

A rematch is also on the horizon! If you’ve done your math right (and I’m sure you have) the 150th anniversary of the historic football game takes place in 2019. There have been talks of a rematch for this upcoming anniversary. Read more here.

Image credit: State Archives of Florida, Florida Memory, https://floridamemory.com/items/show/11389

Introducing the new video trailer for PHISHING FOR PHOOLS by Robert Shiller & George Akerlof

Phishing for Phools jacketDo you have a weakness? Of course you do. Which means, according to Nobel Prize-winning economists George Akerlof and Robert Shiller, you have probably been “phished” for a “phool.”

We tend to think of phishing as the invisible malevolence that led our grandparents to wire money to Nigeria, or inspired us to click on a Valentine’s day link that promised, “someone loves you,” and then promptly crashed our hard drive. But more generally understood, “phishing” is inseparable from the market economy of everyday life. As long as there is profit to be made, psychological weaknesses will be exploited. For example, overly optimistic information results in false conclusions and untenable purchases in houses and cars. Health clubs offer overpriced contracts to well-intentioned, but not terribly athletic athletes. Credit cards feed dramatic levels of debt. And phishing occurs in financial markets as well: Think of the legacy of mischief at work in the financial crises from accounting fraud through junk bonds and the marketing of derivatives.

Ever since Adam Smith, the central teaching of economics has been that the invisible hand of free markets provides us with material well-being. In Phishing for Phools, Akerlof and Shiller challenge this insight, arguing that markets are far from being essentially benign and don’t always create the greater good. In fact, markets are inherently filled with tricks and traps.

We are thrilled to introduce this new video trailer in which Robert Shiller talks about his new book with George Akerlof, Phishing for Phools:


PHISHING FOR PHOOLS and CLIMATE SHOCK included in the long list for FT & McKinsey Business Book of the Year Award

Climate ShockPhishing for Phools jacketThe long list for the FT & McKinsey Business Book of the Year Award has been published, and we’re thrilled to see that two Princeton University Press titles have been included. Nobel Prize winners George Akerlof and Robert Shiller’s new book on on economic trickery, Phishing for Phools, and Gernot Wagner and Martin Weitzman’s examination of the global crisis of climate change, Climate Shock have both been listed in the top 15. Other titles appearing include Ashlee Vance’s biography of Elon Musk, Martin Ford’s study of jobs and automation, The Rise of the Robots, and Anne-Marie Slaughter’s take on how to narrow the gender gap, Unfinished Business.

Read more about this year’s long listed titles and the other books recognized during the award’s 11-year history here.

The shortlist of up to six finalists will be published on September 22nd.  The £30,000 prize will be awarded on November 17th in New York.

Find sample chapters of Climate Shock and Phishing for Phools here and here respectively.



What does the Ancient Greek economy have to say about the current debt crisis? Josiah Ober shares his thoughts

Ober jacketJosiah Ober, author of The Rise and Fall of Classical Greece, has conducted groundbreaking research into the ancient Greek economy, showing that contrary to popular opinion, democracy and economic growth went hand in hand. But are today’s Greeks the “trained and knowledgeable democratic citizens” who built and supported the institutions that served as the foundation for Greek civilization? Ober says now is the time to stop pointing fingers and to think very seriously about the link between democracy and long-term economic stability. He recently discussed Ancient Greece’s answer to the financial crisis in The Daily Beast:

Ancient Greece’s Answer to the Financial Crisis

Greece’s real deficit? Knowledgeable citizens and accountable institutions.

The Greek debt crisis is playing out as if, as Henry Ford said, history is bunk. But if we look to history, we immediately see that the stakes are much higher and the problems are much deeper than either the current Greek leadership or the current EU leadership is willing to admit.

Just before the Greek people went to the polls to decide their future by voting in a miserably mismanaged referendum, George Katrougalos, Greece’s deputy minister for administrative reforms, announced that “The whole question has moved now from the field of economics to the field of democracy.” Meanwhile, the EU leaders, who apparently regard the Union as little more than an accounting device, seem incapable of thinking about the geo-strategic long term. But, like the United States of America, the EU is more than an accounting device. A democratic federation is an attempted solution to the problem of conjoining democracy, prosperity, and security in a dangerous, mutable world. America’s Founders knew that. Europe’s technocrats seem not to.

Read the rest here.

An excerpt from the book ran on PBS’s Making $ense blog yesterday, and Stanford ran a terrific feature on Ober’s research. His work has been cited in recent days by in Washington Post, Quartz, and New York Times articles that look to the Greek past to understand the current debt crisis.

Recently, Ober took the time to talk with us about his book and the reasons for Greece’s flourishing. You can read that interview here.

Book Fact Friday – GDP

From chapter 5 of The Little Big Number:

Economic policy was not always so heavily influenced by the concept of Gross Domestic Product. Policymaking at the federal level began to be premised on the concept of GDP in earnest following the Great Depression—Franklin Delano Roosevelt exerted his influence to propel these policies forward.

The Little Big Number: How GDP Came to Rule the World and What to Do about It
Dirk Philipsen









In one lifetime, GDP, or Gross Domestic Product, has ballooned from a narrow economic tool into a global article of faith. It is our universal yardstick of progress. As The Little Big Number demonstrates, this spells trouble. While economies and cultures measure their performance by it, GDP ignores central facts such as quality, costs, or purpose. It only measures output: more cars, more accidents; more lawyers, more trials; more extraction, more pollution—all count as success. Sustainability and quality of life are overlooked. Losses don’t count. GDP promotes a form of stupid growth and ignores real development.

How and why did we get to this point? Dirk Philipsen uncovers a submerged history dating back to the 1600s, climaxing with the Great Depression and World War II, when the first version of GDP arrived at the forefront of politics. Transcending ideologies and national differences, GDP was subsequently transformed from a narrow metric to the purpose of economic activity. Today, increasing GDP is the highest goal of politics. In accessible and compelling prose, Philipsen shows how it affects all of us.

But the world can no longer afford GDP rule. A finite planet cannot sustain blind and indefinite expansion. If we consider future generations equal to our own, replacing the GDP regime is the ethical imperative of our times. More is not better. As Philipsen demonstrates, the history of GDP reveals unique opportunities to fashion smarter goals and measures. The Little Big Number explores a possible roadmap for a future that advances quality of life rather than indiscriminate growth.

What are Wall Street’s smartest people reading? Lasse Pedersen’s EFFICIENTLY INEFFICIENT

Pedersen jacketLasse Pedersen’s new book, Efficiently Inefficient, a look at the key trading strategies used by hedge funds, just made two lists of top investment books. The Wall Street Journal included it in a list of “the books Wall Street’s smartest people think you should read this summer”, where it was recommended by Torsten Slok, ‎chief international economist at Deutsche Bank. ETF.com also gave the book a shout out, naming it one of the “must read books for serious investors”.

Lasse Pedersen, a finance professor at Copenhagen Business School and New York University’s Stern School of Business, and a principal at AQR Capital Management, is determined to show how markets really work in a world where they are neither perfectly efficient nor completely inefficient. So what exactly does he mean by the contradiction in terms “efficiently inefficient”? From ETF.com:

Imperfectly Efficient

Regarding the book’s title, Pedersen explains: “Markets cannot be perfectly efficient and always reflect all information. If they were perfect, no one would have any incentive to collect information and trade on it, and then how could markets become efficient in the first place? Markets also cannot be so inefficient that making money is very easy because, in that case, hedge funds and other active investors would have an incentive to trade more and more.”

Efficiently Inefficient includes an array of interviews with leading hedge fund managers, including Lee Ainslie, Cliff Asness, Jim Chanos, Ken Griffin, David Harding, John Paulson, Myron Scholes, and George Soros. Free problem sets are available online on Pedersen’s website. The introduction is available for download here.