Why Most Things Fail: Evolution, Extinction and Economics

Most things fail - including social policies - because of complexity and uncertainty. Ormerod shows how different social policies, like integration, for example, can fail because policy makers can not take into account uncertainties and complexities that reveal themselves at a level not available to the policy makers. Ormerod also gives as an example the effort to reduce inequality, and how that has not been achieved despite different attempts. He skewers traditional economists who place too much emphasis and faith in theories based on perfect rationality and perfect markets. He demonstrates how neither of these exist and only give the illusion of control. Along the way, Ormerod intersperses his text with themes from literature to illustrate his points. He has a sharp sense of humor, and throws this into the mix to actually elicit a chuckle from a text essentially about economics. Despite avoiding the use of mathematical formulas (or maths, as he calls them) there are some passages that are challenging for the non-economists. Nevertheless, as a whole the book is accessible to the lay reader and sheds much light on why so many of our governmental, social and even personal decisions can go awry.

Paul has written a fascinating and entertaining book on the probability of failure and develops what he calls an extinction model. As a strategist working within large corporations I found the application of these ideas to the world of work a novel and practical use of the 'extinction factor'. He goes on to examine the factors that prevent extinction, one major finding was that only a small increase in the application of knowledge and information (5%) in the formation of Strategies will improve survival chances by 40%. Further improvement towards 10% and survival chances increase exponentially. The book uses many cases to explain how this is achieved. One other counter intuitive finding was mild tendencies at the individual level within organisations create marked differences at the level of the corporate system as a whole. This has enormous implications for the world of organisational development. I now use many of the statistics and contexts Paul provides in material I use with senior executives. Excellent book.

This book is the follow up to the excellent Butterfly Economics. As I write this review, a leading conservative commentator on a television show broadcast by the Fox News Channel, was stating that the US economy was doing very well. This statement seemed to me to be at odds with the reality as I observe it with For Sale signs springing up almost daily like mushrooms, the lower middle classes and working class are seeing their real incomes eroded, with inflation under control while prices are rising in the shops and at the pumps and where, despite rising interest rates the dollar is falling. Like meteorologists, economists do not seem to be held accountable for their failed forecasts and predictions. Despite tremendous advances in mathematics and statistics as a society we are no closer to being able to explain how the economy works and if, as former President Bill Clinton so ill-eloquently put it "it's the economy stupid", how does the present incumbent not fix the problems. This introductory guide to an alternative perspective on economics lays a foundation to the current economics paradigm. Deliberately written in (mostly) non-technical terms, Ormerod's book harkens back to the time of Keynes and presents an exposition which most adults with a rudimentary education can follow. This is a deliberate challenge to the prevailing orthodoxy which asserts that economics is a subject which can only be understood by virtue of advanced mathematical tools thereby excluding the majority of the populace. Ormerod examines some of the failures of the current discipline to even describe some phenomenoa accurately and ascribes much of thess failures to the central role played by the concept of equilibrium, in particular general euilibrium, which predominates much of modern economics and has done for some sixty years or so. However, the author is clearly concious of the need for construction as well as demolition and he seeks to offer the basis of an alternative prospectus. Although essentially a descriptive text, Ormerod's book carefully provides some clues to the alternative paradigm on offer. he supports his arguments with reference to works of others in the emergent disciplines which illuminate this perspective as well as drawing intellectual support from the work of Hayek and Schumpeter to name but two. Not only that but for those who wish to pursue his arguments further he provides links to more advanced, and more mathematical, sources. Ormerod is gentle with the economics profession. They have been led down a false path to a place from which they are unable to escape, and despite having access to the most powerful of modern computers, the economists qua economists have been unable to provide any better answers to the questions of thousands of years than those economists of centuries past. There is a growing body of scholarship which crosses traditional (party) discipline lines as dissatisfaction with economics as we know it continues to grow. Som

This excellent, short work by Paul Ormerod is a worthy successor to his remarkably successful Butterfly Economics. As he did in that work, he draws here on lessons from biology to explain phenomena in economics. He covers a wide range of subjects, time periods and theories, all tied together (though not without some straining at the rope) by an inquiry into failure. Although Ormerod makes every effort to keep the work accessible, that scarcely makes it is easy reading. Readers who lack at least a nodding acquaintance with scientific writings and economic studies may find this hard slogging indeed. With that caveat, we think that readers who have a background in this field should pay serious attention to Ormerod's ideas. The notion that failure is inherent and inevitable for many systems ought to guide business strategies and - especially - government regulation.

This book should be essential reading in all MBA programs and boardrooms. Failure of many ventures is inevitable, any person with a few years of business experience can attest to that. The problem is many consultants and strategists do not understand the chance or dynamics of failure. The lessons this book carries and the facts collected here are vital to all the large scale ventures in the world but are not just concerned with the economics of them.