Viking, £16.99. Order at the discounted price of £13.99 inc. p&p from independent.co.uk/bookshop or call 0843 0600 030

Vicky Pryce reviews I Spend Therefore I Am by Philip Roscoe

'A puzzling argument on the value of economics'

We know that economics is not a perfect science. Many even dispute that it is a science at all as the ability to do controlled experiments is limited. We economists construct models not because they are necessarily a completely true reflection of reality but because they are useful pointers. And we are often wrong – and admit it.

Of course we think economics is at the centre of things and we could do better as a society if only we were listened to. But that is a far cry from believing that economics explains everything that goes on in people's lives . Nor does it claim to. But without it, the ability to understand what is going on, price options accordingly and be able to make informed decisions would be reduced.

Philip Roscoe does not agree. He bemoans the power of economics and argues that since it only explains a small part of real life, discourages collective action and promotes self-interested behaviour, it must be rethought and a new economics developed in its place. He uses some intriguing examples to make his case, such as prostitution and online dating. But it is difficult to see why economics is failing us just because interactive internet sites depersonalise prostitutes and their individual services and render them a "commodity" like any other.

Similarly with online dating, which he believes alters the true basis for making choices as one is forced to narrow down the desired qualities (blond, blue-eyed) rather than be guided by the way attraction really works (lovely eyes, great smile). We are therefore encouraged to assign values which cannot truly reflect the complexity of a whole person or the importance of the way people interact with each other.

But I fail to see exactly what is wrong here. Online dating could be seen as what economics can do well: it cuts down the cost of transactions. You don't have to go to wine bars every night looking for someone who might fit the bill; you can do your initial research from home. What's more, the sites offer extra choice and increase the number of people involved; no one is forced to go down this route and it isn't necessarily replacing other ways of meeting. The data he uses himself shows that online dating is just as likely to result in good long-term relationships.

Similarly with externalities [the costs or benefits that affect those who did not choose to incur them] – an area that exercises him, and quite rightly too. Economics here has most to offer. The only way to account for the true cost of a car journey, for example, is through applying economic principles to value the extra burden to society in terms of pollution, congestion, depletion of resources, etc. Yet Roscoe derides the cost benefit and value for money calculations made by government to allocate resources, as he believes "economic efficiency" should not be the overriding factor. But it is only economics that attempts to gauge how society may want to maximise social welfare and then assigns values to alternative options to allow comparisons.

To my surprise, Roscoe ends with a reference to one of my favourite films, Babette's Feast. It is about a woman fleeing the French revolution who turns up in an ascetic Norwegian town. She uses all the money from a lottery win to bring over food and wine from France. As a trained chef, she cooks a brilliant meal for dour villagers who turn into rather inebriated but happier human beings.

Roscoe asks "when has economics ever achieved such transformation?" Yet Babette uses skills that were once valued and well-paid. She buys the lottery ticket having assessed the cost benefit and the likely probability of winning. And when she wins the money she puts it to good use. What gives her satisfaction is to spend it the way she does, something which the economists refer to as "revealed preference". Well, if this isn't economics, what is?

By the end of what is otherwise a very readable and entertaining book, I wasn't any the wiser.

Vicky Pryce will be speaking at the launch of PEN’s prison anthology, 'Running to Stand Still: stories from the inside', on Monday 24 February at the Free Word Centre, Farringdon, London

Arts and Entertainment
Call The Midwife: Miranda Hart as Chummy

tv Review: Miranda Hart and co deliver the festive goods

Arts and Entertainment
The cast of Downton Abbey in the 2014 Christmas special

tvReview: Older generation get hot under the collar this Christmas

Arts and Entertainment
Dapper Laughs found success through the video app Vine

comedy Erm...he seems to be back

Arts and Entertainment
Wolf (Nathan McMullen), Ian (Dan Starky), The Doctor (Peter Capaldi), Clara (Jenna Coleman), Santa Claus (Nick Frost) in the Doctor Who Christmas Special (BBC/Photographer: David Venni)

tvReview: No ho-ho-hos with Nick Frost's badass Santa

Arts and Entertainment
Bruce Forsyth and Tess Daly flanking 'Strictly' winners Flavia Cacace and Louis Smith

tv Gymnast Louis Smith triumphed in the Christmas special

PROMOTED VIDEO
Arts and Entertainment
Rhys says: 'I'm not playing it for laughs, but I have learnt that if you fall over on stage, people can enjoy that as much as an amazing guitar solo'
musicGruff Rhys on his rock odyssey, and the trouble with independence
Arts and Entertainment
Krysia and Daniel (Hand out press photograph provided by Sally Richardson)
How do today's composers answer the challenge of the classical giant?
Have you tried new the Independent Digital Edition apps?
Arts and Entertainment

ebooksNow available in paperback
Arts and Entertainment

ebooks
News
Shenaz Treasurywala
film
News
tv
Arts and Entertainment
Jason Watkins as Christopher Jefferies
tv
Arts and Entertainment
Star Wars Director JJ Abrams: key character's names have been revealed
film
Arts and Entertainment
Pharrell Williams won two BBC Music Awards for Best Song and International Artist
music
Arts and Entertainment
Mark, Katie and Sanjay in The Apprentice boardroom
TV
Arts and Entertainment

Film The critics but sneer but these unfashionable festive films are our favourites

Arts and Entertainment
Frances O'Connor and James Nesbitt in 'The Missing'

TV We're so close to knowing what happened to Oliver Hughes, but a last-minute bluff crushes expectations

Arts and Entertainment
Joey Essex will be hitting the slopes for series two of The Jump

TV

Who is taking the plunge?
Arts and Entertainment
Katy Perry as an Ancient Egyptian princess in her latest music video for 'Dark Horse'

music
Arts and Entertainment
Dame Judi Dench, as M in Skyfall

film
Arts and Entertainment
Morrissey, 1988

TV
Latest stories from i100
Have you tried new the Independent Digital Edition apps?

ES Rentals

    Independent Dating
    and  

    By clicking 'Search' you
    are agreeing to our
    Terms of Use.

    Aren’t you glad you didn’t say that? The worst wince-and-look-away quotes of the year

    Aren’t you glad you didn’t say that?

    The worst wince-and-look-away quotes of the year
    Hollande's vanity project is on a high-speed track to the middle of nowhere

    Vanity project on a high-speed track to nowhere

    France’s TGV network has become mired in controversy
    Sports Quiz of the Year

    Sports Quiz of the Year

    So, how closely were you paying attention during 2014?
    Alexander Armstrong on insulting Mary Berry, his love of 'Bargain Hunt', and life as a llama farmer

    Alexander Armstrong on insulting Mary Berry and his love of 'Bargain Hunt'

    From Armstrong and Miller to Pointless
    Sanchez helps Gunners hold on after Giroud's moment of madness

    Sanchez helps Gunners hold on

    Olivier Giroud's moment of madness nearly costs them
    A Christmas without hope: Fears grow in Gaza that the conflict with Israel will soon reignite

    Christmas without hope

    Gaza fears grow that conflict with Israel will soon reignite
    After 150 years, you can finally visit the grisliest museum in the country

    The 'Black Museum'

    After 150 years, you can finally visit Britain's grisliest museum
    No ho-ho-hos with Nick Frost's badass Santa

    No ho-ho-hos with Nick Frost's badass Santa

    Doctor Who Christmas Special TV review
    Chilly Christmas: Swimmers take festive dip for charity

    Chilly Christmas

    Swimmers dive into freezing British waters for charity
    Veterans' hostel 'overwhelmed by kindness' for festive dinner

    Homeless Veterans appeal

    In 2010, Sgt Gary Jamieson stepped on an IED in Afghanistan and lost his legs and an arm. He reveals what, and who, helped him to make a remarkable recovery
    Isis in Iraq: Yazidi girls killing themselves to escape rape and imprisonment by militants

    'Jilan killed herself in the bathroom. She cut her wrists and hanged herself'

    Yazidi girls killing themselves to escape rape and imprisonment
    Ed Balls interview: 'If I think about the deficit when I'm playing the piano, it all goes wrong'

    Ed Balls interview

    'If I think about the deficit when I'm playing the piano, it all goes wrong'
    He's behind you, dude!

    US stars in UK panto

    From David Hasselhoff to Jerry Hall
    Grace Dent's Christmas Quiz: What are you – a festive curmudgeon or top of the tree?

    Grace Dent's Christmas Quiz

    What are you – a festive curmudgeon or top of the tree?
    Nasa planning to build cloud cities in airships above Venus

    Nasa planning to build cloud cities in airships above Venus

    Planet’s surface is inhospitable to humans but 30 miles above it is almost perfect