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Since the pioneering of economic theories by Adam Smith in his famous book the wealth of Nations, there have been numerous economic theories. The market place has become much complex, diverse and much wider and is even characterized by greater dynamism. Economists seem to be losing the war in terms of predicting economic situations and have otherwise limited themselves to explaining what has already happened. In the Tipping point the author provides to examples that explain how dynamic economic situation can be.

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He uses the sudden fame acquired by the Hush Puppies shoes after years of experiencing downward trend. As explained the sudden trend is caused by teenagers who contagiously 'infected' the population with their newly found fashion. Tipping point also explains how the high crime rates experienced in New York during the early 1990s suddenly fell in a span of five years. Tipping point theory explains how economic dynamics are controlled by the laws of the market and how nobody actually has control over them.

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Nobody knew that Hush Puppies could hit such a comeback, not even the makers.

 

However Levitt and Dubner the authors of Freaknonomics may tend to disagree with this notion. In the book they explain how different people have control over the economic aspects and how they can manipulate these aspects in their favor and therefore influence economic dynamics. Considering the case of the sumo wrestlers where those with 7 wins and 7 losses win even when their chances are pretty low to win against those with 8 wins and 6 loses. From the data they collected they realized that there was some kind of agreement between the two groups of the wrestlers to manipulate the results. The same case applies to manipulation of information by Ku Klux Klan and real estate agents. Economic theorists consider aspects from two dimensions; whether the dynamics experienced are driven by the invisible hand in the market or controlled by a group of people.

On the other hand other fields such as science and psychology use experiments that are reproducible to explain the observed occurrences.

 

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