George A. Akerlof and Robert J. Shiller: Animal Spirits, Princeton University Press 2009

"This book, which draws on an emerging field called behavioral economics, describes how the economy really works. It accounts for how it works when people really are human, that is, possessed of all-too-human animal spirits." (p. xi)

A work by two distinguished economists, this excellent, well-written and engaging volume analyses "how human psychology drives the economy". The authors stress the role of stories, the significance of what they call "the confidence multiplier", as well as the working of beliefs, emotions, trust and fairness as key parameters that affect economic behaviours and the whole of economy.

The point is to focus upon the way we think as the fundamental constituting force of economic phenomena. "To understand how economics work and how we can manage them and prosper, we must pay attention to the thought patterns that animate people's ideas and feelings, their animal spirits. We will never really understand important economic events unless we confront the fact that their causes are largely mental in nature." (p. 1)

As a philosopher of life, convinced of the relevance of thinking for the conduct of life, I find the book extremely relevant, forceful and exciting. Socratic examined life requires examining one's thinking of economics and the meta thinking of mental models that drive us in economic decisions. It seems hard for me to imagine anyone reading this book without engaging in a fruitful self examination. (This includes people like business managers that consider themselves well informed on economics.)

Economics affects us, and not only in terms of providing us resources: it works from within us as modes of thinking and patterns of thought. Often that implies narrowing us down. Challenging the mainstream, the Akerlof and Shiller join forces with Amartya Sen and Edmund Phelps, the two greatest living economic thinkers, in provinding a humanly-tuned perspective on economics, one that is more realistic and relevant than the one supplied by the dominating models which are overshadowed by abstract assumptions of rationality.