5 Jan 2011

The Economics of Ego Surplus -- The Review

Paul McDonnold sent me a copy of this book, a rare example of economic fiction.

This "novel of economic terrorism" is well-written and fast paced; I read it in an evening.

The plot centers on Kyle, an economics graduate student who tries to get to the bottom of a Middle-Eastern terrorist plot to manipulate US markets. Paul does a good job at integrating economic ideas into the story, without appearing overly-didactic. (There's even a cocktail party debate over who wins and loses from free trade!)

After I read the book, I had a little Q&A with Paul:
  1. Why the title? What was an alternative?
    I did struggle over the title. I realize it’s a little enigmatic, but I felt like it conveyed that the novel was about economics and also conveyed the moral of the story, although the reader may not realize that until the last page. The main alternatives were shorter, more generic and maybe more marketable options like “The Economist” (assuming that’s not a copyright infringement). But in the end I just liked the quirky and enigmatic better. And books with such titles have been successful in the past, like “Special Topics in Calamity Physics,” or to pick a classic, “The Catcher in the Rye.”

  2. How does this book relate to the current financial mess? Or is this a timeless theme?
    I started it before this particular mess hit, so my intent is more timeless. It seems to me the business cycle is part of the psychology of a market-driven economy, so I expect financial crashes to come and go for a long time.

  3. Should we worry about home grown terrorists (Goldman Sachs?)
    Anything’s possible, but as far as big businesses go, I think the profit motive ties them too strongly to the existing environment to want to destroy it. The villain in the novel, Nash Mahir, is sort of a special case because his political views are so strong he is willing to mostly destroy the global conglomerate he built up in order to create havoc.

  4. Why use economic concepts in the book, e.g., gains from trade, when the plot centers on manipulation of the financial system. Were there concepts that you HAD to include to make the plot work? Were there ones you dropped (too complicated? Irrelevant?)
    Like the protagonist Kyle, I’m more of an econ guy than a finance guy. So even though finance was integral to the story I tried to keep the focus on the macro-economy. At one point I had more economic material in the book, such as an explanation of the trade imbalance between the U.S. and China. But it just didn’t integrate very well so I cut it.
Bottom Line:I give this book FOUR STARS as an economics novel and THREE STARS against all novels.

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