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BOOK REVIEW  

Economics for the Everyday 

Aurko Mahapatra1 

Sudipta Sarangi, The Economics of Small Things, Penguin India, 2020, 296 
pages, ISBN 9780143450375 

Midway through the iconic sci-fi 
thriller, The Matrix, Neo, played by 
Keanu Reeves, cheekily informs 
his interlocutors, “Once you figure 
out the matrix, it all gets much 
easier”. The matrix, in this 
blockbuster film, refers to a 
computer programme that defines 
the terms for action; the system 
itself, however, remains open to 
being entirely gamed. Sudipta 
Sarangi’s lucidly written and 
engaging The Economics of Small 
Things invokes a similar reality. 
Economic decision-making, we 
learn, can yield desired outcomes if 
we play within the rules as well as 
bend and scramble the game. 

The book comprises a collection 
of anecdotes and stories—25 bite-
sized, crisply written chapters. 
These slick and quick-witted 

                                                        
1Third-year student of BSc Economics, Erasmus University, Burgemeester Oudlaan 50, 3062 
PA Rotterdam, Netherlands; aurko.mahapatra@gmail.com.  

Copyright © Mahapatra 2021. Released under Creative Commons Attribution-

NonCommercial 4.0 International licence (CC BY-NC 4.0) by the author.  

Published by Indian Society for Ecological Economics (INSEE), c/o Institute of Economic  

Growth, University Enclave, North Campus, Delhi 110007.  

ISSN: 2581-6152 (print); 2581-6101 (web). 

DOI: https://doi.org/10.37773/ees.v4i2.456  

mailto:aurko.mahapatra@gmail.com
https://doi.org/10.37773/ees.v4i2.456


Ecology, Economy and Society–the INSEE Journal [170] 

accounts focus on the ordinary and everyday and tell us that economic 
behaviour is a series of puzzles awaiting solutions. Hence, every choice, 
calculation, and action can be peeled open to reveal its underlying economic 
logic that, in turn, flows from larger patterns and rationales.  

A personal favourite from the collection is the puzzle of the dominance of 
the Alphonso over other Indian mangoes in foreign markets. For Sarangi, 
the popular answer that the Alphonso is the undisputed “king” of taste and 
aroma does not cut it. Rather, through counterintuitive reasoning, he makes 
a compelling case to show us that fixed transportation costs make the 
Alphonso only four times more expensive—even as its production costs 
ten times more—than other mangoes. The foreign consumer, thus, gets a 
better premium deal. Put differently, the relationship between relative prices 
and fixed costs gives the Alphonso its competitive edge.  

The story of shoes left outside temples urges us to focus on the significance 
of the complementary good—having one half of a pair is useless. Kids are 
therefore taught to keep their shoes apart when leaving them unattended. 
While this is a good anti-theft technique, it also has macroeconomic 
applications. Sarangi plots out an example by discussing the issue of traffic 
jams in India. Prior to the 1990s, India was not home to a demanding 
automobile industry; hence, the condition of roads and highways was 
usually well below average. Following liberalization, however, banks in 
India started handing out car loans on a large scale and many new foreign 
automobile companies entered the market. What followed was a huge 
increase in the number of cars. However, there was no similar investment in 
road infrastructure to match the automobile industry’s growth. We face the 
repercussions of this even today, as urban commuters suffer daily traffic 
jams. Clearly, in this case, perceptive macroeconomic planners could have 
understood and noted the vital linkages between the automobile industry 
and roads. In other words, if complementarities are involved, one lagging 
behind the other most certainly leads to inefficient outcomes.  

The Economics of Small Things uses day-to-day decisions as entry points to 
understand deeper economic rationales. The story of Grameen Bank and 
Muhammad Yunus reveals a similar trend. Assessing the creditworthiness 
of the vast rural populations of Bangladesh was a serious challenge, mostly 
because poor people lacked tangible assets to serve as collateral. 
Disempowered and marginalized people relied primarily on loan sharks for 
much-needed credit, though such sources charged high interest rates and 
applied unfair conditions to unsecured loans. Yunus solved this by offering 
loans to groups of people rather than individuals. Those in need of loans 
were thus encouraged to form groups with other equally creditworthy 
members of society, a process also known as “self-selection”. Economic 



[171] Aurko Mahapatra 

theories of self-selection, in other words, helped Yunus design a radically 
innovative and attractive credit system.  

For all the puzzle-solving and compelling anecdotes, one still wonders if 
Sarangi is fronting the old and well-worn belief that self-maximizing 
behaviour must form the basis of macroeconomic policy. Throughout the 
book, moreover, there is undue emphasis and fascination with consumer 
behaviour. Contemporary climate change anxieties, to give but one 
pronounced example, tell us that short-term consumer behaviour can 
complicate the task of evolving solutions based on long-term perspectives 
on planetary health.  

While I am a student of economics, I often ask myself if I enjoy economics 
at all. Growing up, unsolicited lectures from my father about Karl Marx and 
Doordarshan’s broadcast of the budget never caught my fancy. Rather, it 
was watching Sachin Tendulkar hit a century or AR Rahman accept an 
Oscar that got my blood rushing. The Economics of Small Things, however, 
helped me appreciate afresh the meaning of “everyday”, the intricate 
calculations that underlie daily choices, and what we consider common 
sense. Sudipta Sarangi has certainly deepened my understanding of 
economics by connecting theory and practice through the art of storytelling.  


