The Week: Best of the blogs - Irrational thinking

I have just been reading Animal Spirits: How Human Psychology Drives The Economy And Why It Matters For Global Capitalism. It's a surprisingly readable book, co-authored by George Akerlof, a man who won the Nobel Prize for Economics in 2001 for a 1970 paper entitled: 'The Market For Lemons: Quality Uncertainty And The Market Mechanism.'

The interesting thing about that paper is that, before it was finally published, it was repeatedly rejected by academic journals on the grounds that it was too trivial. Which suggests that, like advertising, high-level academia includes a category of work which straddles the line between infantilism and genius. I suppose "Comparethemeerkat" and rainhamsheds.co.uk would be examples of this kind of work. A magical type of work which the planning function, with its tedious reliance on logic, tends to destroy.

In Animal Spirits, the authors ask why, if we are all so driven by rationality, personal rates of saving in China are nearly 20 per cent of GDP, while in the US they are near zero.

This raises a couple of questions. First of all, why - other than for psychological reasons - do the Chinese save more than even fairly wealthy Americans? If logic were the driver, would it not be the other way round?

But there is another, more important question: what is behind this staggering behavioural difference, and is there anything you can do to change it?

Rory Sutherland, campaignlive.co.uk

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