Nobel laureate Mr Jean Tirole intends to demystify the art of finance, arguing that the state and the markets need to work together .

After winning the 2014 Nobel Prize for Economics, French theorist Mr Jean Tirole found himself pestered by the press, and people on the street, who were full of questions about the issues of the day. Mr Tirole was suddenly thrust into the role of public intellectual, expected to diagnose society’s ills and prescribe solutions.

He thought: is this what economists do? Galvanised, Mr Tirole did what newly appointed public intellectuals do: he wrote a book. Economics For The Common Good contains Mr Tirole’s reflections on the role of the economist in the 21st century. It’s a considered treatise, less on what economics is, but more on what economists do day to day, and what for.

In his book, Mr Tirole makes the case for how economics can deliver results for the common good, tackling everything from competition law to Brexit to environmental policy to the nature of rationality.

It’s a manifesto for how economics, better understood by us laypeople and politicians alike, and better practised by economists themselves, can get us back on track. At 576 pages, it’s a weighty read, but thoroughly worth it. For those in a rush though, we’ve compiled a dinner-party version, as a taster. Scroll down to discover some key ideas from the book.

The Nobel committee typically rewards only boosters of free-market orthodoxy – those who believe the economy thrives best when the government meddles least – but Mr Tirole laments how such beliefs have tired the public. The market economy, defining our modern world of privatisation and globalisation, leaves traditional political power increasingly powerless. Governments and pseudo-governmental bodies, such as regulators and central banks, merely tinker at the edges.

Mr Tirole makes the case for a new concept of the state, given that governments don’t produce goods and services as much as they used to, and there are fewer jobs in the public sector. The state’s new role is primarily as a regulator: establishing ground rules, intervening when markets fail, ensuring healthy competition and curbing monopolies, supervising the financial system, creating true equality of opportunity, and redistributing resources through taxation.

“Our choice of society is not between the state and the market, as partisans of state intervention and those of laissez-faire policies would have us believe,” says Mr Tirole. “The state and the market are complementary, not mutually exclusive. The market needs regulation; the state needs competition and incentives.”

The digitisation of society is at the heart of the economic and social changes – and their challenges – facing us in the 21st century. Upending practically all human activity and industry, it’s a huge challenge for regulators: companies don’t dominate markets like they used to.

Today, “two-sided” markets prevail: Apple, Google, Amazon, and countless startups such as Uber (think especially of the sharing economy, but also media businesses) are intermediaries where sellers and buyers interact, creating platforms with customers on both sides. Media businesses, for example, give away free content to lure in more readers, generating greater revenue from advertisers. Clubs may let in certain people for free, for similar reasons. In these kinds of markets, what looks like anticompetitive behaviour (lowering prices below cost to squeeze out upstarts) might not be, and the conventional idea of a monopoly doesn’t really apply. So regulators, acting as they normally do to stop monopolies, might make things worse.

If regulators demanded higher prices for readers to the magazine cutting its subscription prices below cost, so that it was easier for new entrants to compete, it would damage the two-sided market and leave everyone worse off.

As such, Mr Tirole says the role of regulators is to ensure a level playing field that platforms empower rather than restrict, new entrants aren’t put off, and the interests of the wider economy are defended.

It was Mr Tirole’s work on information asymmetry, regulation and two-sided markets that won him the Nobel. As the Committee said: “Regulation is difficult.” It is, though, also essential.

While economists love to think that their ideas can cure all society’s ills, straying ever further from their principle remit, their discipline is a humble one, Mr Tirole insists.

For one, he cites economists’ failure to predict the 2008 crisis, reminding us that they’re not in the prediction business. “It has to be understood that economists will always be more comfortable identifying the factors likely to lead to a crisis than predicting whether it will occur, or on what date,” he says. “Just as a physician will be more comfortable identifying factors that might cause an illness or a heart attack than in saying exactly when they will occur.”

Economics also can’t help us make judgments about the society we should value, or the nature of the common good. There are major disparities of attitudes towards redistribution, for instance, and these are personal value judgments that differ in huge, incompatible ways. Sixty per cent of Americans, for instance, including a large proportion of the poor, say that poor people are that way because they are lazy or lack determination. Only 26 per cent of Europeans think so. Similarly 29 per cent of Americans believe that poor people are caught in a poverty trap, compared to 60 per cent of Europeans. Those beliefs have major impact on policy, but they are not for economists to reconcile.

Most importantly, Mr Tirole argues, economists have a responsibility to make their work interesting, practically relevant, and to engage the public with it. In turn, the public have a responsibility to engage with it. It might stop economic common sense being unanimously ignored as they were in populist uprisings against remainers and Clintonites in the last year, notes Mr Tirole.

Economics is like any culture or art, he says. “We like it more the better we understand it.”

Economics For The Common Good (Princeton University Press)_ by Mr Jean Tirole is out now_