MOLLY’S PARENTS DO not allow her to play at Amy’s house because, as well as having a swimming pool, her parents keep a gun. She is allowed to play at Imami’s, where there is no gun. They feel they have made a wise decision in terms of their daughter’s safety. However, in the US the child death rate through drowning in a swimming pool is one per 10,000 swimming pools each year, while one child per million guns is killed by a gun each year. That is 100 times more. How do we make decisions?

And how about this unintended consequence of legalised abortion: in 1973, Norma McCorvey’s case came to the US Supreme Court, which then legalised abortion. A generation later, the US experienced the biggest crime drop in history. McCorvey was a poor, uneducated, unskilled, alcoholic, drug-using twenty-one-year-old, who had already given up two children for adoption. As a result of the Supreme Court decision, millions of poor, unmarried teenage mothers, for whom illegal abortions had been too risky, expensive or hard to get, could now get abortions. Decades of studies show that a child born into an adverse family environment is far more likely than other children to become a criminal. How rational are the neo-cons in even such mundane matters?

These are just two examples from Freakonomics, a critique of the way we analyse events and make decisions. The authors present a number of compelling case studies, of which the two above are examples, for the proposition that common sense, humanity and native wit lead to healthy outcomes congruent with our deeper aspirations. By contrast, analyses based on statistics which are adduced by small powerful groups with their own agendas tend to distort decision making in their favour, often to the disadvantage of the greater community. Such groups exploit the failure of the majority either to see or to take action against the destructive consequences of their actions for the community as a whole, whether local or global.

The authors, one an award-winning economist, the other a best-selling author and journalist with The New York Times, have produced a book that is by turns funny, scary, enraging and hopeful. They remind us of the complexity of life and the consequent need for balance that our very failure to fully understand all the factors or dynamics of a situation demands. Everything in their casuistic approach is well researched, with a detached attitude that values open-mindedness, thoroughness and common sense as well as the application of sound and sophisticated research tools.

The sick partiality of the field we have come to accept as economics is revealed, a partiality that serves to an obscene degree the short-term material greed of a powerful global minority at the long-term expense of the whole global community and its descendants, their own included. This minority have hijacked the all-important prerogative of deciding what we measure and how we measure it. In his 1992 Schumacher lecture, the late James Goldsmith pointed out that the standardisation of criteria and measures of progress and performance in the EU were discouraging the very diversity of qualities and cultures upon which Europe depends for its civilisation, resilience and progress. If we are to solve contemporary global problems, we must heed Einstein’s dictum that this can only be done on a level other than that on which they were created. We also need to measure what really contributes to wellbeing, the subject of the New Economics Foundation’s recent report, The Happy Planet Index, which has had close to one million hits on their website. It addresses the success or failure of countries in supporting a good life for their citizens, whilst respecting the environmental limits upon which all of our survival depends. The Happy Planet Index measures the ecological efficiency with which human wellbeing is delivered.

Freakonomics provides good crisp evidence for what, to billions of people, is obvious. In a recent issue of Resurgence, Andrew Simms reminded us of Ruskin’s comment that there is no wealth but life. It is worth noting that Ruskin also said that a sufficiency is wealth, while an excess is ‘illth’. Levitt and Dubner have given us a useful heuristic tool to keep us on the track of whole systems and a holistic approach to life, which could indeed help us live as if there is no wealth but life itself.

Giles Chitty is a partner in Holden and Partners, holistic financial advisers.