Choosing the Right Pond

Book excerpt: Is money the major factor in shaping the marketplace? Is salary the prime consideration in job satisfaction? Not necessarily, according to Robert Frank. Economists, Frank charges, have refused to treat people as people, and consequently they have painted a distorted picture of the marketplace. Economists have too often neglected fundamental elements of human nature and therefore have failed to ask many obviously important questions and have offered wrong or at best misleading answers to the questions they do ask. This challenging and provocative book offers an alternative to the prevailing view of human beings as economic automatons. Individual desires--notably the quest for status--profoundly affect the marketplace. "Status concerns play dominant roles in many of the most important private transactions and underlie much of the regulatory apparatus we observe in the modern welfare state," Frank writes. The book offers a radical reinterpretation of what private markets can and cannot do and suggests new ways of looking at familiar regulations and social programs. Many of the issues discussed touch directly upon the strongest concerns we feel as human beings struggling to define our roles and affirm our importance in the world around us. About the Author: Robert H. Frank is Associate Professor of Economics at Cornell University. He is the co-author (with Richard Freeman) of The Distributional Consequences of Direct Foreign Investment.