Poor Economics by Abhijit V. Banerjee and Esther Duflo – Book Review

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Publisher’s write-up:

‘Why would a man in Morocco who doesn’t have enough to eat buy a television? Why do the poorest in India spend 7 per cent of their food budget on sugar?

This eye-opening book overturns the myths about what it is like to live on very little, revealing the unexpected decisions that millions of people make every day.’

Poor Economics was written in 2011 by MIT economists Abhijit Banerjee and Esther Duflo, years before they were eventually awarded the Nobel prize. This book explores the life of the poor in developing countries, with samples mainly from India, Indonesia, Kenya and a few from Latin America. The book is split into two parts – Private Lives where the authors explore the lives and management of personal finances of the poor – the classic question of ‘how do you live with 99 cents a day?’ ; and the latter that focuses on institutions, both government and private (like microfinance).

The economists were known for implementing their randomised controlled trials, used primarily in medicine in the field of economics. We do not have clear answers as to whether welfare schemes or other public policies work and despite that, economists and people in general have strong views on their effectiveness. To explore the same, the authors use randomised controlled trials across various parts of the developing world.

The question that authors explore is the existence of poverty trap – wherein, if people are within the poverty trap, they would never be able to reach levels of income that could help them escape this trap. Economists have conflicting views on this subject where some deny the existence of this trap. The authors discuss the results of the trials he conducted on people escaping the poverty trap.

We have certain fundamental notions that in developing economies – being sent to school and higher income levels could be a panacea to the problem of poverty. However, many children who have been through several years of education in Kenya or India are unable to read a basic paragraph in any language (their native language or the lingua franca). Similar issues were noticed in terms of rising income levels – where people were not consuming more calories, but were preferring to have tastier food (high spending on sugar, higher quality rice, etc.)

The book provides an insight into the average lives of the poor – especially the issue of short term versus long term view. Much as there consensus on the political inclination of the writers of this book, the book was objective in each of their examples; also exploring the arguments of the economists who have opposite views (I could be accused of confirmation bias in picking this book considering my alignment with the economists in terms of politics).

The first part took us through the world of the poor and even dispelled some of the popular notions that schemes are difficult to implement among the poor because of illiteracy or ignorance whereas their beliefs triggering resistance are often traded for a small welfare measure (like a bag of lentils for vaccinating your child).

The second part on institutions was the weaker section of the book, where the authors explore microfinance, policies and the politics that surround it and, entrepreneurs (both success stories and otherwise). The analysis was less on the institutions and seemed like an extension of the first part of the book where the authors had yet again analysed on the impact on individual lives based on the aid extended by the institution. While I understand that through these randomised controlled trials, it ultimately resorts to analysing individual lives, the title was a misnomer which gave me a different expectation.

A strength as well as a weakness of this book was that it was simplified. You do not need a degree in economics to understand or appreciate the book and you are not overloaded with equations or incomprehensible curves and the graphs used were explained in detail by the authors. However, I would have liked it better if they had used more illustrations to demonstrate some of their results. Someone who is well versed with economics might have felt that the book lacked the depth.

The book did not promise any solutions and in fact, the title of the concluding chapter is In Place of a Sweeping Conclusion. For those who do not have much experience or knowledge about life in developing countries, this book could provide insights – on both the economic and social factors that come into play.

On that note, I would award the book a rating of eight on ten.

Rating – 8/10

Have a nice day,
Andy

The Hidden Life of Trees by Peter Wohlleben – Book Review

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The Hidden Life of Trees is a book from the forester Peter Wohlleben exploring the life of trees – do they communicate with their kind like sentient beings? Do they share resources? Do they protect their young and come together to manage a crisis? Or are they just objects performing life processes only for themselves? These are some of the questions that Peter Wohlleben answers based on his research and observation during his own profession.

‘In Feminism and Ecological Communities: An Ethic of Flourishing, Chris J. Cuomo critiques the animal rights stance that proceeds solely from the logic that some animals are sentient and can feel pain, because it privileges sentience in an ecology that relies on both sentient and non-sentient beings. This privileging, she writes, “comes out of the assumption that human beings are paradigmatic ethical objects, and that other life-forms are valuable only in so far as they are seen as similar to humans.”’

-          How to do Nothing by Jenny Odell (click for reading the review) – chapter 5: Ecology of Strangers

I have quoted this passage from a book that I previously read; I am not here to discuss the merits of the quote or ethics of animal rights activists – many may not even believe that life-forms are valuable so long as they resemble human characteristics. However, it is true that ethical treatment of members of the ‘plant kingdom’ has not been a topic of discussion. Thus, in this book – the author brings in the features of trees that resemble sentient beings – their experience of pain, how they provide for resources to each other, their defence mechanisms and sense of a community.

The author observed trees primarily in the state of Rhineland-Palatinate in western Germany – and analysed the behaviours and the community spirit of the beech trees. Even though most of the book was focused on Central Europe – most people who are familiar with forests can relate to the author’s anecdotes – as expressed by different people knowledgeable on the topic in the foreword to the book.

The author started very well in the book – trying to ‘humanise’ trees in every way – talking about the networks they create for communication, the defence mechanisms they develop for protecting themselves, etc. The book was structured well wherein the author made it clear on what he was going to establish in each chapter heading. To keep the reader engaged, he often made some very strong simplistic conclusion which are totally against a common perception and then went on to elaborate how it is not simple as that. One such example is how he made an observation as to how high carbon emissions helped trees to grow faster but with the flipside that trees that trees have evolved in a manner where they are meant to take time to mature.

The book also provided a whole new perspective on the kind of trees we plant in gardens or public parks for ‘beauty’, their life is not much different from the life of cattle in a cruel dairy farm. It was interesting to know that the beech tree with red leaves which we find beautiful is a consequence of a negative ‘health condition’ of the tree.

With that said, the author assumes a lot about the reader – first that most of us have some knowledge of forests / trees in general. If I am asked shown a picture of ten different commonly found trees – I would be surprised if I can identify more than even two. Moreover, I am someone who has never taken a keen interest in forests or nature tourism at large – and the author often makes statements like ‘as we all love being in forests’; in fact, I have visited the Rhineland-Palatinate region myself but more so to visit Karl Marx's house than forests.

That is at least a problem with me and not the book as such (except for his assumptions), but many of the conclusions made were mere conjectures with statements like, ‘the tree is still obtaining resources which means there must be some kind of communication’ (paraphrased). The author could have merely stated it as his belief and cited that further research is ongoing.

A minor issue I felt was that the book was translated a little too much – having all measures in gallons, Fahrenheit, miles, inches, etc. that it was a mathematical exercise for me to visualise most of the measures he had cited.

To conclude, this book could be of great interest to those with a green thumb and a love for forests. In my case, this could well be another case of a right book in the wrong hands. It was informative to begin with, but I lost him in the middle of the book when he went too deep into forests and forest behaviour. If the author had some images in the book to illustrate his observations, the book could have helped a reader like myself better. To the extent that he gave me a new perspective when it comes to looking at trees, forests, the fungi around them – I would consider that the author has successfully communicated his message.

Owing to these mixed feeling I have had on the book, I would sit on the fence regarding this book and award it a rating of five on ten.

Rating – 5/10

Have a nice day,
Andy