I've started reading The Economist's Oath: On the Need for and Content of Professional Economic Ethics by George DeMartino (a review will follow in the next day or two). So far, it's not clear to me what the criteria are for a profession needing ethics. The author makes it clear, by the way, that he's not talking about a code of conduct – a set of 'how to' rules for behaviour in specific circumstances – but rather a set of “intellectual and pedagogical practices and traditions.” In other words, economic ethics should be parallel to medical ethics, not like the 'customer service' promises from your bank.

This set me wondering – why economists? DeMartino goes on to talk about government economists and IMF economists making decisions that affect many people's lives. The government hires lots of policy experts of different kinds. Do they all have/need professional ethics too? And while doctors have professional ethics, medicine has both more direct and better understood effects on specific people. Economics is not (yet) an experimental science, and much of medical ethics pertains to conducting experiments. Economics is more like geology, evolutionary biology or astronomy in relying on 'historical' evidence and inductive reasoning. Do geologists have or need professional ethics?

Surely the author isn't arguing that economists need professional ethics because they were wrong about the economy before the financial crisis? We're wrong about all sorts of things. Being ethical and being right are clearly distinct. Besides, if we're assigning blame for the crisis, I think the bankers should be centre stage, not the economists.

More to follow when I've finished the book.

The new issue of the Boston Review has a very interesting essay by Rachel Glennester and Michael Kremer about the implications of behavioural economics for the study of development. It explores the potential of including behavioural assumptions in addition to using experimental methods for assessing development projects. The forum on the subject kicks off with a comment by me, and others will follow.

The day after posting the review by Philip Thorton of What You Need to Know About Economics, by George Buckley and Sumeet Desai, another introductory guide to economics turned up in the post. It's The Economist's Economics: Making Sense of the Modern Economy, edited by Saugato Datta with articles written by Economist journalists.

This is a third and 'radically revised' edition. It starts out with basic economic ideas, turns next to aspects of the global economy and the financial crisis and recession, and finally puts the spotlight on economics itself. This section looks at the post-crisis critique of the subject and then dips into some of the ways economics has been changing, such as behavioural economics and experimental methods. The third section is less comprehensive a survey of the most recent trends in economics than my own book The Soulful Science, but makes the same underlying point about modern economics being in reality rather different from the stereotype that is so often criticised.

From the essays I've read so far, this is a thoroughly clear and accessible book, as one would expect from The Economist stable. I think it serves a useful purpose, too, in discussing economics in the context of the global crisis for the general audience. It consists of a series of articles so on the one hand (as we economists say) it can seem disjointed but on the other hand is therefore ideal for picking up at odd moments to read an essay or two. It would be particularly useful for A level and beginning undergraduate students, although equally handy for the general newspaper reader who needs greater enlightenment in the face of the cacophony of daily reporting.

I'd been looking forward to reading Ed Glaeser's book Triumph of the City, and haven't been disappointed. One of the most creative and rigorous of urban economists has long been publishing fascinating academic papers on cities and related issues such as the role of social norms in affecting economic outcomes. Those years-worth of research inform a book which is a real page turner.

The individual chapters cover different themes – such as the importance of skilled people for a city's economic success, the role of transport systems in shaping cities, slums and urban ghettos, the environmental footprint of urban life. Understanding what makes cities function – or not – is important because, he argues, cities are our future. More than half the world's population lives in cities, including the rapidly growing mega-cities in developing countries. “The enduring strength of cities reflects the profoundly social nature of humanity,” he writes. (p269) A Manhattanite born and bred, he clearly loves cities, despite having become a suburbanite in recent years. “What terrible bout of insanity induced me to choose deer ticks as neighbours instead of people?” (p166) However, thinking about the reasons for his own choice helped inform his suggestions about improving city life. After all, while cities have the people, variety, cultural activities, restaurants, choice, liveliness and other amenities, they also have congestion, pollution, expensive housing and other disamenities.

Some possibly surprising conclusions emerge from the analysis. Here are some of them:

1. People matter, not places – a thriving city needs skilled workers, who seek each other out and make each other more productive by example and by sharing ideas. Buildings don't make a city, as so many examples of failed construction programmes demonstrate. A classic mistake of urban planning is to think the buildings come before the people when in fact it's the other way round.

2. The better the municipal authorities make a city for poor people – with housing, transport, social programmes – the more poor people there will be. After all, nothing is worse than being poor in the countryside where there's nothing to do. People on low incomes move to the city for opportunity, and the more help a city offers, the more poor people will stay or arrive.

3. Preservation ultimately destroys a city. Forbidding changes puts the brakes on normal urban dynamism and will eventually turn a city into a playground for rich residents and tourists rather than a functioning economy. Some preservation is desirable – surely Jane Jacobs was right to campaign against a highway going through Washington Square – but too much disney-fies a place. Paris seems to have suffered this fate, beautiful as it is.

4. If cities can't grow up, they grow out. A successful city attracts more and more people who need somewhere to live. The density at which they live depends on how many new tall buildings are constructed. If planning restrictions mean high rise homes can't be built, housing prices will rise, while people on lower incomes will live far away and commute. Either that or move to Houston, or some suburb or smaller city where buildings sprawl.

5. Cities are better for the environment than the countryside. Collecting people together with shorter commutes reduces the amount of driving and increases walking and the use of public transport.

Ed Glaeser is an advocate of this type of densely-populated, walking (or public transportation based) city, with new buildings and a variety of uses. He argues against some of Jane Jacobs' specific conclusions in her classic The Death and Life of Great American Cities (especially about high rises) but is entirely in sympathy with her passion for the wealth and potential of urban life. He concludes that in time living in suburbs will prove ephemeral, not least because of the need to avoid long commutes by car. “Our culture, our prosperity and our freedom are all ultimately gifts of people living, working and thinking together – the ultimate triumph of the city.”

I agree. What's more, as an economist I very much enjoyed the rigour with which assertions made in the book are supported by evidence. Some bits of evidence are particularly delicious. For example, New Yorkers aged 25 to 34 are 75% less likely to die in a car accident than their equivalents nationwide – because when they're drunk they take the subway home instead of driving. The New York suicide rate for young people is 56% of the national average. I thought this might be because they're less bored, but this being the US it's because they are far less likely to have access to a gun with which to shoot themselves. But older New Yorkers are also much healthier than the national average. In contrast to the pre-industrial era, cities are places where people are more productive, happier and healthier.

There's all this and much more in Triumph of the City for any municipal policy maker, economist or urban flaneur.

A guest review of What you Need to Know about Economics by
George Buckley and Sumeet Desai
Phil Thornton, Clarity Economics

This may seem an odd way to begin a book
review, but this is not a book that readers of this website will need to read.

It is, however, exactly the book they should
give to non-economist friends and acquaintances who ask them obvious questions
such as “What is that you do, exactly?” “What has economics ever done for us? “
and “Why did you fail to spot the credit crunch?”

As can be guessed from the title this is
effectively a primer in economics for non-economists who are interested in the
state of the world financial system but don’t plan to go to night school. It is part of a series of “What you need to know” books that have
covered areas such as leadership, business and strategy and follows a
straightforward structure.

When it comes to “plain English” economics,
there are many similar books that are structured by answering specific
questions. This can often make it harder for a non-specialist to understand the
big concepts.

This book does not make that mistake, instead
opting for eight chapters on growth, inflation, employment, trade, money,
central banking, public finances and housing. Each chapter begins with a page of bullet
points titled ‘What’s it all about?’ and then goes methodically through the
issue. Paragraphs are nicely spaced apart and the pages illustrated with
easy-to-understand graphs, pie charts and flow diagrams.

The text is also broken up by potted
biographies of luminaries such as Milton Friedman and JM Keynes and some of
their best quotations.

Each chapter ends with a further reading
section and a one-paragraph section on the “one thing” you should take away
from that section.

While aiming to be clear and easy to
understand, it does not shy away from technical issues. The chapter on
inflation includes a section on demand-pull versus cost-push inflation with
line graphs that would not look out of place in an Economics 101 textbook.

The writing is clear, as one would expect
from the authors: Buckley is chief UK economist at Deutsche Bank while Desai is
an economics commentator who used to be chief UK economic correspondent at
Reuters. But is not simplistic and is happy to explain complex concepts in a
straightforward way. This is a great addition to the library of
books aiming to bring economics to non-economists  – and perhaps comes at the time
it is needed most.

A PS from Diane: previous posts on this blog have discussed popular economics books – see this one or search for 'popular economics'.