The World's Best Book Summaries
What is a progressive income tax? Why should the wealthy pay more taxes? In Capital in the Twenty-First Century, Thomas Piketty argues that since the 1980s, wealth inequality has made a troubling comeback that demands a response. His proposed solution is a progressive income tax. Read more about Piketty’s case for progressive taxation and why other economists think differently.
What is the difference between money and wealth? Which one should be your focus? Typically, we understand wealth to be the same as net worth, the sum of your assets. However, entrepreneur and self-made millionaire Naval Ravikant sees wealth a bit differently. The Almanack of Naval Ravikant shares his definition of wealth and how he distinguishes it from money. Then, it explains why Ravikant believes you should focus on generating wealth rather than money. Keep reading to learn about this way of looking at money and wealth.
What are diminishing returns? If you want to learn a new subject, should you read every book on it? Why do horror movies seem to become trite after a while? In The Great Mental Models Volume 3, Rhiannon Beaubien and Rosie Leizrowice include diminishing returns as one of the thinking models that can boost your understanding and decision-making ability. While the law is often used in an economic context, the authors extend the principle to everyday applications. Read more to learn about diminishing returns and how understanding them can help you understand so much more.
Is the economy an open or a closed system? Why does traditional economics treat the economy as a closed system? According to Kate Raworth, traditional economics has a closed-system model for the economy, which operates simply as a series of “inflows” and “outflows” of money, closed off from everything else. This model puts the economy in isolation and treats it as a machine, governed by a simple and predictable set of inputs and outputs. In an open economic system, on the other hand, the economy is embedded within the environment and the planet itself. Here’s why the economy is an
What is rational behavior in economics? How accurate is this assumption that humans are inherently rational agents seeking to maximize their economic utility at the expense of everything else? In economics, human beings are seen as largely rational agents. The rational economic man cares only about increasing his material wealth and will always follow incentives to do so. According to Kate Raworth, this portrait of humankind is grossly inaccurate. In her book Doughnut Economics, she calls into question the power of extrinsic incentives in driving human behavior. Here’s why the assumption of rational behavior is ultimately flawed.
What is the doughnut model in economics? How has economic growth pushed us outside the doughnut? According to Kate Raworth, the author of Doughnut Economics, the goal of economic policy should be to stay within the inner ring of the metaphorical doughnut. This entails designing an economy that is productive enough to ensure that everyone on the planet has their basic material needs met, but that does not grow so fast as to deplete our natural resources and degrade the environment. Here’s what we can do to stay within the doughnut, according to Raworth.
What is Esther Duflo and Abhijit Banerjee’s book Poor Economics about? What is the key message to take away from the book? In their book Poor Economics, MIT professors Esther Duflo and Abhijit Banerjee analyze poverty by asking small, pointed questions about specific aspects of the lives of the poor. Their goal is to develop a detailed picture of how the poor live and how policy interventions affect their lives so that policymakers can better design interventions that help them. Below is a brief overview of Poor Economics by Esther Duflo and Abhijit Banerjee.
Can income inequality be solved? What can be done to bridge the global divide between the rich and the poor? Income inequality is a global problem—it plagues all countries to some extent. A small minority of the world’s population has amassed vast fortunes, while billions of people remain mired in extreme poverty. But hope remains. In her book Doughnut Economics, Kate Raworth proposes four income inequality solutions that can reduce the gap between the rich and the poor. Let’s take a look at Raworth’s solutions for income inequality.
What are the main causes of malnutrition? Why are the poor malnourished in spite of the efforts of policymakers? In Poor Economics, MIT professors Esther Duflo and Abhijit Banerjee discuss a well-known problem among the poor: malnutrition. They argue that this problem doesn’t stem from lack of food per se, but from lack of nutrition. In other words, the poor are not starving for calories, they are starving for nutrients. Here’s what MIT professors Esther Duflo and Abhijit Banerjee have to say about the causes of malnutrition amongst the poor.
Is economic progress destroying the planet? How does the focus on economic growth deplete the planet’s resources? Most economies are inherently extractive and wasteful. If we continue at this rate, it’s only a matter of time until we reach a point of no return. To prevent this from happening, we need a top-to-bottom redesign of our global economic order: away from an extractive economy and toward a regenerative economy. Here’s why an economic revolution is in order, according to Kate Raworth.