The Logic of Life – Tim Harford

… With his emphasis on good communication, it is not surprising that Schelling was the man who came up with the idea of the hotline to Moscow. He realised that a nuclear war could easily start as the result of some accident: a misunderstanding or mistake by a radar operator.

… When he accepted his Nobel Prize in 2005 – economics, not peace, Schelling began saying, ‘The most spectacular event of the past half century is one that did not occur. We have enjoyed sixty years without nuclear weapons exploded in anger.’

… Even simple products like the cappuccino I have beside me would be impossible without the division of labour. Is there anyone in the world who has mastered ceramics, dairy farming and the art of the perfect espresso roast? I’d be bowled over by someone who had even two out of three.

… The logic of comparative advantage highlighted something that most men – except economists – have found it hard to get their heads around: there is no reason to believe that men were breadwinners because they were any good at it. They might simply have been breadwinners because getting them to help around the house would have been even worse.

… Some people long for a return to the stable, traditional marriages of the 1950s, even if that means a firmer division of labour between the sexes again. They might do well to remember what Adam Smith wrote about the excessive division of labour: ‘The man whose life is spent in performing a few simple operations … has no occasion to exert his understanding or to exercise his invention in finding out new expedients for removing difficulties which occur. He … generally becomes stupid and ignorant as it is possible for a human creature to become.’

Smith’s argument applies just as well to ironing and baking cakes, his use of the male pronoun not withstanding. Division of labour creates wealth but can sap our lives of variety. The serious entry of women into the workforce has meant that they spend less time baking, and perhaps also that their husbands spend a little more time with the children. It has empowered women to leave marriages that are not working, making them happier and safer from abuse. It has truly been a revolution, and the price of that revolution is more divorce and less marriage – but it is almost certainly a price worth paying.

… He (Schelling) discovered something rather profound: ‘A very small preference not to have too many people unlike you in the neighbourhood, or even merely a preference for some people like you in the neighbourhood … could lead to such very drastic equilibrium results that looked very much like extreme separation.’

… As we’ve seen in earlier chapters, individually rational behaviour does not necessarily lead to a socially rational outcome. … Even if it did penetrate your rational ignorance that sugar tariffs are costing you six dollars a day in higher grocery bills, how much do you care? Would you change your vote as a result? (part of the split-bill problem). … There are millions of voters who lose from tariffs protecting the sugar industry, but not one of them will rationally expend any effort trying to do something about that.

… The curious logic of rational politics, then, is the exploitation of the many by the few, because a few citizens each with a lot to gain will fight, campaign and lobby much harder than millions of citizens each with very little to lose.