Financial Times 2023 Economic Books 10-18
https://www.ft.com/content/31ced0bb-cdb7-43ae-aeea-fbcac8d1b9cd
Mini, and by definition, unfair views the FT’s 18 best books on economics of 2023 based on the blurbs Martin Wolf has supplied. The first 9 are at:
(100) Financial Times 2023 Economics Books 1-9 (substack.com).
10 – 18 are here.
10. “Liberalism” by Alan Kahan (Princeton University Press) The roots of both the market economy and the democratic state lie in liberalism. In this remarkable book, Kahan recounts in persuasive detail the history of this transformative set of ideas. Today, as often before, liberalism confronts enemies, essentially because “The liberal project of creating a society where none need be afraid frightens those who think that some people and/or some groups ought to be afraid.” Liberals cannot concede on this. But they must, he suggests, add a moral/religious pillar to their more traditional political and economic ones.
“The liberal project of creating a society where none need be afraid frightens those who think that some people and/or some groups ought to be afraid” seems too facile to me and while I agree about adding a religions/moral dimension to the arguments for Liberalism, I suspect many will not.
11. “Ours Was the Shining Future: The Story of the American Dream” by David Leonhardt (Riverrun/Random House) Leonhardt demonstrates the failure of American capitalism to generate widely shared prosperity since 1980, labelling this the “Great American Stagnation”. The story is not narrowly economic. Life expectancy has, for example, fallen well behind levels in other high-income countries, while the life expectancy of those who did not go to college has actually fallen. Leonhardt, a senior writer for The New York Times, brings these realities to life. Partly as a result of the trends he describes, American democracy is at risk. This is an important book.
Definitely important. The key issue for the book, as with Brad DeLong’s “Slouching Toward Utopia,” is the diagnosis of what went wrong. From other writings of Leonhardt I think he subscribes to a nuanced view that a “neoliberal” experiment failed. The alternative view, though perhaps too close to “no true Scotsman,” is that the experiment (with the partial exception of the Clinton presidency) was captured by those who coud use it to promote those efficiency-increasing reforms that also transferred income up the SE scale and abandoned those that together with progressive tax increases would have transferred income down the SE scale. On either view, important anti-stagnationist reforms like taxation of net emissions of CO2, lower deficits and merit-based immigration were hardly within the Overton window.
12. “Visions of Inequality: From the French Revolution to the End of the Cold War” by Branko Milanovic (Belknap Press) Inequality is back, as a political topic and as a focus of study. In this fascinating book, Milanovic, one of the world’s most influential scholars of inequality, examines what leading economists of the past have had to say on this issue. He moves from Quesnay to Kuznets, via Smith, Ricardo, Marx and Pareto. At the end, he looks at the work of Thomas Piketty. Today, he argues, we have more theories, more data and a wider focus on both national and global inequality. We also have more concern. The field is duly booming.
There are enough dimensions and definitions of “inequality” for the field to boom for a long time.
13. “The Capitalist Manifesto: Why the Global Free Market Will Save the World” by Johan Norberg (Atlantic) Norberg is perhaps the world’s most effective defender of free-market capitalism. In this book he returns to the theme that “freedom of choice and competition” are the engines of economic progress. He is, of course, correct. Moreover, the evidence is also that more prosperous societies are in general happier ones. Yet what he says is far from entirely true. Not only are the social and political underpinnings of free markets hard to build, but their social and political consequences can be damaging: capitalism is good; unbridled capitalism is not.
One fears that this is the kind of book that will never be read by those who could most benefit from it, obscured for them by what “is far from entirely true.” The Capitalist Apostle Paul to the Progressive gentiles has not yet come along.
14. “My Journeys in Economic Theory” by Edmund Phelps (Columbia University Press) In this lovely little book, Phelps, a winner of the Nobel memorial prize in economics, describes his journey of intellectual creativity. He is famous for his contribution, with Milton Friedman, to the idea of the “natural rate” of unemployment. Subsequently, he became engaged in ideas of economic justice pioneered by the philosopher John Rawls, and so recommended wage subsidies. Most recently, he has focused on the idea that economic progress is the fruit of dispersed creativity. Societies that encourage this achieve “mass flourishing”; but those that do not do not.
Three out of three isn’t bad. Although today we have better theories of inflation unemployment, Einstein did not devalue Newton.
15. “Making Sense of China’s Economy” by Tao Wang (Routledge) This is an indispensable book for those trying to understand the Chinese economy. The author grew up in mainland China and is currently chief China economist at UBS investment bank in Hong Kong. Her analysis is well-informed and penetrating. She concludes that China’s annual rate of growth is likely to average 4-4.5 per cent between 2021 and 2030, a marked drop from the 8 per cent achieved from 2010 to 2019. But it could even be as low as 3 per cent, as domestic and external constraints interact. It is very unlikely to exceed 5 per cent.
With an almost stagnant population, even 3% p.a. means an almost 25% increase in GDP per capita. We should hope that China uses that wealth to improve living standards and not geopolitical adventures.
16. “Revitalizing the World Trading System” by Alan Wolff (Cambridge University Press) Wolff, former deputy director-general of the World Trade Organization, has written the definitive guide to the past, present and possible future of the multilateral trading system. Somewhat surprisingly, given rising hostility to the WTO and trade itself in the US, his own country, and the lack of enthusiastic support elsewhere, notably including China and the EU, he is optimistic: “Autarky cannot be achieved. There can be no decoupling of major economies except at unacceptably high cost.” The WTO is the only place where the needed international co-operation can be sustained because it, like trade itself, is global.
International trade negotiations, ostensibly about negotiations, give and take between countries are more essentially, internal negotiations of some potentially exporting sectors with some import-competing sectors. Only the international setting however can mobilize potential exporters as a counterweight to import compoeting sectors. Two factors have soured the US (i.e. US exporters) on trade agreements. a) The WTO framework was not strong enough compel China to follow through with opening up to manufactured imports instead of only investment. b) US macroeconomic policy, secularly high deficits, attracted capital flow to the US overvaluing the exchange rate, discouraging exports and spurring competing imports. The US is unlikely to soon engage in multilateral trade agreement including China.
17. “Age of the City: Why Our Future Will Be Won or Lost Together” by Ian Goldin and Tom Lee-Devlin (Bloomsbury Continuum) “In 1800,” note Oxford’s Goldin and The Economist’s Lee-Devlin, “there were 1bn humans sharing our planet, roughly 70m of whom inhabited cities. Today, global population is 8bn, with over 4.5bn people living in cities.” This then is a 6,300 per cent increase in the globe’s urban population. By the end of this century, the urban population may have doubled again. Cities are arguably our most extraordinary creation. They are sources of dazzling creativity. They are also places of vast inequality. This fascinating book explains the challenges they pose and what needs to be done to make them work better for all their inhabitants.
Cities are where all the exceptions to Econ 101 are concentrated. There are intense spillovers of technology (Silicon Valley) economies and diseconomies of scale, especially in transportation and other infrastructure, congestion externalities and public services like roads and street that are difficult to price. Uban crime is of a different scale. If the book can explain “the challenges cities pose and what needs to be done to make them work better for all their inhabitants,” it will be very good indeed..
18. “Techno-Feudalism: What Killed Capitalism” by Yanis Varoufakis (Vintage) Varoufakis is a remarkable combination of analyst and dreamer. In this book, the former Greek finance minister asserts that something new, which he calls “techno-feudalism”, has replaced the traditional capitalist economy. In this new economy, the great tech monopolies, ubiquitous owners of “the cloud”, are seen as feudal lords, charging the rest of us “cloud rents” for the right to access what they own. Surely, this is not altogether wrong. Whether his proposals for transforming this new system into a modern utopia make sense is another matter. But, as always, Varoufakis makes his readers think. That is an important achievement.
This seems to miss the really important source of “tech” power: network effects. It’s relatively easy to create competition for cloud storage or computing. The continuing existence of Twitter/X in the face of massive mismanagement and deterioration of the servile shows the power of winner take all in specific information domains.
[Standard bleg: Although my style is know-it-all-ism, I do sometime entertain the thought that, here and there, I might be mistaken on some minor detail. I would welcome what the diplomats call “a frank exchange of views.”😊]