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How economics needs to change to keep pace with the twenty-first century and the digital economyDigital technology, big data, big tech, machine learning, and AI are revolutionizing both the tools of economics and the phenomena it seeks to measure, understand, and shape. In Cogs and Monsters, Diane Coyle explores the enormous problems―but also opportunities―facing economics today and examines what it must do to help policymakers solve the worlds crises, from pandemic recovery and inequality to slow growth and the climate emergency.Mainstream economics, Coyle says, still assumes people are “cogs”―self-interested, calculating, independent agents interacting in defined contexts. But the digital economy is much more characterized by “monsters”―untethered, snowballing, and socially influenced unknowns. What is worse, by treating people as cogs, economics is creating its own monsters, leaving itself without the tools to understand the new problems it faces. In response, Coyle asks whether economic individualism is still valid in the digital economy, whether we need to measure growth and progress in new ways, and whether economics can ever be objective, since it influences what it analyzes. Just as important, the discipline needs to correct its striking lack of diversity and inclusion if it is to be able to offer new solutions to new problems.Filled with original insights, Cogs and Monsters offers a road map for how economics can adapt to the rewiring of society, including by digital technologies, and realize its potential to play a hugely positive role in the twenty-first century.

In her thought-provoking book, "Cogs and Monsters: What Economics Is, and What It Should Be," Diane Coyle embarks on an intellectual journey to dissect the complexities of economics and envision a more humane and sustainable economic system. Coyle argues that traditional economic theories, often dominated by mathematical models and abstract assumptions, have failed to capture the true essence of human behavior and the intricate workings of the real economy.

Coyle delves into the historical evolution of economics, tracing its roots from the classical economists to modern-day schools of thought. She exposes the limitations of conventional economic models, highlighting their inability to predict crises, explain inequality, or address environmental degradation. She argues for a more pluralistic approach to economics, one that incorporates insights from psychology, sociology, history, and other disciplines.

Coyle introduces the concept of "cognomics," a term she coined to emphasize the importance of human cognition and decision-making in economic behavior. She argues that economic models should account for the bounded rationality, biases, and emotions that shape individual choices. By understanding the cognitive processes that underlie economic behavior, we can develop more effective policies and interventions.

The book also explores the concept of "monsters," entities that can cause significant harm to the economy and society. Coyle identifies four main types of monsters: monopolies, externalities, financial instability, and inequality. She argues that these monsters are not inherent features of the economy but rather the result of policy failures and market distortions. By addressing these monsters, we can create a more inclusive and sustainable economic system.

Coyle concludes by outlining a vision for a reformed economics that is more interdisciplinary, inclusive, and focused on human well-being. She calls for a shift away from excessive reliance on GDP as a measure of economic progress and towards a broader set of indicators that capture social and environmental factors. She also emphasizes the importance of empowering individuals and communities to participate in economic decision-making.

"Cogs and Monsters" is a timely and thought-provoking book that challenges conventional economic wisdom and offers a fresh perspective on how we can reshape our economic systems for the better. Coyle's insights are essential reading for anyone interested in understanding the complexities of economics and the potential for a more just and sustainable future.