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Network Power: The Social Dynamics of Globalization by David Grewal. Yale   

            University Press, 405 pp, $30.


The Power of Place: Geography, Destiny, and Globalization's Rough Landscape

            by Harm de Blij. Oxford University Press, 280 pp, $27.95.



By George Scialabba



            Freedom is Americans' supreme value, but how well do we really understand it? Consider this proposition: "Your money or your life!" Strictly speaking, we are perfectly free not to give up our money. But most of us would agree that this isn't really much of a choice; and if the thief were caught, no judge or jury would accept as a defense that we had freely given him or her the money. Choices can be coerced: blatantly, as in this example, or more subtly.

            One of the subtle ways is through what David Grewal, in an ambitious and original new work of social theory, calls "network power." Every large-scale social activity requires networks: groups of people whose interaction is coordinated by some standard or practice. Language is a standard; so are systems of measurement, currencies, engineering and quality-control regulations, even dress codes and the Social Register. Some standards are more widespread than others; hence some networks are larger and more powerful than others. The network of English-speakers is larger than that of Swahili-speakers. The network of dollar-users is larger than that of cowrie-shell users. The metric standard is gradually overtaking the imperial (ie, Anglo-American, yards/feet/inches) standard - in fact, England is about to switch. Is America next?

            The answer depends on the network power of metric system users. Under certain  conditions - specifying them is one important contribution of Grewal's book - the choice of whether or not to join a network may not be coerced but will not be entirely free, either. Every time a country or manufacturer switches to the metric system, pressure increases on all others to switch too. The more programs are compatible only with Microsoft operating systems, the more inconvenient it will be to use any other kind.  The larger the network, the higher the costs of not joining.

            Arguably the most important standards in today's world are the ones driving globalization: multinational agreements on trade, investment, and intellectual property rights. Every developing nation desperately wants access to the markets of the developed nations, which means joining the World Trade Organization and other global or regional trading networks, like NAFTA. But the developed nations (above all the United States) insist that their poorer brethren first accept a standard: a whole framework of tax, regulatory, and other policies intended to give American banks and corporations free rein.  

            Of course, developing nations are perfectly free to demur and go their own way. But this, they protest, isn't really much of a choice. There's such a thing as (in Grewal's words) "the compulsion of having no viable alternative." Why should weak economies have to go without capital or else agree to remain mere adjuncts of stronger ones? It's not fair.

            But is it unjust? Are anyone's rights being violated? Grewal answers this question with an elegant philosophical analysis of justice. He deftly undermines the conventional distinction between positive and negative rights, demonstrating that to define basic rights - rights that trump even the most powerful network standards - is a matter for democratic decision. Or should be.


            Grewal wants to keep people and cultures from being flattened by the power of global networks. Harm de Blij, a noted geographer, believes there's no danger of that - unfortunately. Pace Thomas Friedman, the world is nowhere near flat, de Blij argues. Even as skyscrapers rise and McDonalds proliferate, globalization "creates a high-relief topography of privilege and privation." What isolates a majority of humans from the processes of globalization - language, religion, endemic disease, disaster-prone environments - is far more salient than anything that tends to integrate them. "For all the liberating changes that have already occurred, place of birth still has a powerful influence over the destinies of billions. ... For all the 'flattening' perceived and relished by globals, the world is still dauntingly rough terrain for many more locals."

            Familiar and unfamiliar statistics follow. Malaria, "driven out of the global core and left to fester in the periphery," kills as many people daily as died on 9/11, while "hundreds of millions of children live in housing without windows or screens." Diarrhea kills even more children than malaria, in part because more than a third of the world's population has no plumbing. Female literacy lags far behind males'. The new megacities - Lagos, Karachi, Bogota, Lima, Jakarta, Sao Paolo, and others - are enclaves of wealth surrounded by vast human wildernesses in which tens of millions swarm.

            Solutions are intractable. There is one, though, that de Blij overlooks. We could have the courage of our apparent convictions and simply declare the superfluous billions non-human. This would mean giving up Christianity and democracy, with their sentimental fiction that all human beings are equal before God and have certain fundamental rights. A pity; but then, we've never made much use of them.



Predictably Irrational:The Hidden Forces That Shape Our Decisions by Dan Ariely. Harper Collins, 280 pages, $25.95.


Nudge: Improving Decisions About Health, Wealth, and Happiness by Richard Thaler and Cass Sunstein. Yale University Press, 293 pages, $26.



Reviewed by George Scialabba



            Near the beginning of The Hidden Persuaders (1957), Vance Packard quoted from Advertising Age magazine the first principle of the new science of Motivation Research: "In very few instances do people really know what they want, even when they say they do." Fifty years later, this astounding revelation has begun to penetrate mainstream economic theory. Better late than never.

            American political ideology since around 1980 can pretty much be summed up in four words: markets good, government bad. Unregulated competition, in this view, is optimally efficient; governments need only enforce contracts, tend to national security, and then step out of the way. Neoclassical economics demonstrates with mathematical elegance that, if not interfered with, supply and demand, production and consumption, will glide smoothly toward a stable equilibrium.

            But any proof is only as good as the assumptions it rests on. According to conventional economics and political science, consumers and voters can be counted on to make rational choices. "The assumption that we are rational," writes MIT economics professor Dan Ariely, "implies that in everyday life, we compute the value of all the options we face and then follow the best possible path of action." It also implies that we have sufficient information to make a wise decision, and that the context in which we decide doesn't matter - deciders are always calm and objective, uninfluenced and unpressured. It implies, as Harvard law professor Cass Sunstein and University of Chicago economist Richard Thaler put it, that we are "Econs" rather than "Humans."

            We're not, of course, as wise humans (and wily advertisers) have always known. A new sub-discipline called "behavioral economics" has begun to quantify this perennial intuition and assess its implications. Two engaging and enlightening new books divide these tasks between them. Predictably Irrational describes some of the research that has led economists to modify many standard assumptions. Nudge turns these insights to account, suggesting improved strategies for individual decision-making and public policy.

            Dan Ariely studies people's apparently peculiar choices and tries to make sense of them. Case 1: The first company to manufacture a bread-making machine offered one model, priced at $275. Virtually no one bought it. The company then added another, larger model, priced at $400. Overnight, the sales of the $275 model took off. Case 2: A restaurant offered a fine wine at $50 a bottle. Hardly anyone ordered it. The restaurant then added a mediocre wine for $70. Immediately, diners began ordering the $50 wine. Case 3: A group of business-school students were presented with an ad for the Economist magazine offering an online-only subscription for $60 and a print-plus-online subscription for $120. Two-thirds of them chose the online-only subscription. Presented with another ad that offered the online-only sub for $60, a print-only sub for $120, and a print-plus-online sub for $120, four-fifths of the same, presumably savvy group chose the print-plus-online subscription.

            None of these results makes sense - if you assume that "people really know what they want." But we only know or want anything in some context. Contexts shape decisions - this is the message of behavioral economics. The above cases illustrate the principle of "relativity": we are far more likely to choose something - whether or not we actually want it - if it seems like a bargain in relation to something else. Ariely's other cases illustrate (often amusingly) the principle of "arbitrary coherence," the "zero price" effect, the "endowment" effect, and the "keeping options open" trap, among others.

            Richard Thaler is one of the founders of behavioral economics. Along with Cass Sunstein (the most widely-cited law professor in America, says the book's publicity), he has formulated a new approach to public policy, called "libertarian paternalism." The seemingly oxymoronic title - the equivalent of "liberal conservatism" or "heretical orthodoxy" - signals their desire to avoid the extremes of raw, anarchic individualism and heavy-handed, one-size-fits-all regulation.

            To "nudge" is to frame a choice, to arrange its context, using what the authors call "the emerging science of choice," so as to make one or another result more likely. To those who object, knees jerking, that this is an infringement on liberty, Thaler and Sunstein reply that choices always appear in some frame or other - there is no such thing as a frame-less, context-free choice. Knowing this, we can either leave the framing to chance (or, more likely, to advertisers), or we can consciously, democratically decide on it.

            This means, above all, paying close attention to default settings. The most powerful influence on decision-making, it seems, is inertia; the most likely choice is no choice, at least when choice involves actually doing something. So if there's reason to think people would like to save enough money for retirement, conserve energy, be registered to vote, belong to a union, and save lives by donating their organs when they die, then we should offer "Save More Tomorrow" (ie, automatically increasing) pension plans, cost-disclosing thermostats, voter registration simultaneous with driver's license renewal, postcard authorization for unions, and "opt-out" organ-donor instructions on ID cards. We should, that is, make it easier for people to do - ie, by default rather than by making a special effort - what they would probably, on reflection, like to do. Thaler and Sunstein propose many more such nudges, some of which will please liberals and some conservatives.

            If behavioral economics and "choice architecture" sound like common sense rather than cutting-edge social science ... well, better late than never.




GEORGE SCIALABBA is a regular contributor to the Globe Books section.


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