Summer books of 2020: Economics

Anne Case and Angus Deaton, Princeton University Press, RRP$27.95/£20

This book builds upon the seminal finding of the two authors that the mortality rates of middle-aged white Americans stopped falling in the 21st century and for the non-college-educated, in particular, have since been rising. The perversities of America’s profit-driven healthcare system do much to explain the rising death rate. The failings of modern American capitalism helped create the despair. Behind both the deaths and the despair is the role of money in US politics. This book is of the highest importance.

More: The 10,000 Year Rise of the World Economy

Philip Coggan, Profile Books, RRP£25

How did humanity transform the world over the last 10,000 years? Philip Coggan of The Economist provides a comprehensive and lucid account of this transformative achievement. At bottom, the transformation has been economic. Humanity has created an increasingly productive and also unprecedentedly global economy. These two achievements are closely related and behind both lies something powerful and wrongly unpopular: international trade.

Geoff Crocker, Palgrave Macmillan, RRP$59.99/£44.99

We live in an era of radical policy proposals, in response to the failure of important high-income countries to provide economic stability or economic security to the bulk of the population. Geoff Crocker offers a clear and simple proposal: the provision of a universal basic income funded by the creation of “sovereign money”. Whether or not one believes this is the right answer, it represents an important pole in today’s debate on the future of our societies and economies.

Alex Cobham, Polity, RRP$19.95/£14.99

What we do not count does not count. Alex Cobham’s book is built on this truism. He argues that those at the bottom and those at the top are left out of statistics. We have a limited knowledge of significant categories of disadvantaged people, including the homeless, the disabled and many aspects of the lives of women. But our statistics also ignore significant aspects of the lives of the very well-off, especially those who can conceal their wealth and incomes in tax havens. The call for more complete data is right and important even if one does not share the author’s radical goals.

George Curtis, Shepheard-Walwyn, RRP£10

George Curtis has a soft spot for Henry George. So do I. George famously argued that landowners are among the biggest gainers from economic progress. Yet they do not create that wealth. They benefit from the investments, ingenuity and labour of others. The answer, George suggested, was to transfer the increased value of land into the hands of the public. Curtis agrees with this proposal, as do I. It would not solve all our economic and social problems. But it would help.

Summer Books 2020

All this week, FT writers and critics choose their favourites. Some highlights:

Monday: Andrew Hill on business
Wednesday: Gideon Rachman on politics
Thursday: Maria Crawford on fiction
Friday: John Thornhill on technology
Saturday: Critics’ picks

Fred P. Hochberg, Avid Reader Press, RRP$28

Trade is not an arcane mystery. Nor is it a plot against hard-working people. On the contrary, it is a source of more varied, cheaper and more reliable goods and services. Hochberg is an enthusiast for trade, and rightly so. But he is an honest one. This book offers a clear and lively account of why trade is important, why the opposition to trade from the current US administration is foolish and, above all, what needs to be done to make trade work for the US and the US fit for trade.

John Kay and Mervyn King, Norton, RRP$30

The future is not calculable. To believe that it is to commit a dangerous intellectual mistake. Unfortunately, this error is all too characteristic of modern economics and especially of its view of the way financial decisions are, can and should be made. The right approach, argue these distinguished authors, is to accept that we do not live in a world of calculable risk, but of radical uncertainty. We do not even know what we do not know. They are right.

The Deficit Myth: Modern Monetary Theory and How to Build a Better Economy

Stephanie Kelton, Public Affairs, RRP$30/John Murray, RRP£20

Modern monetary theory has become a driving idea of the modern left. The government, proponents argue, can print as much money as it wants to fund whatever it wishes. The only constraint is excess demand and so inflation. This book by a prominent advocate is going to be influential. In my view, it is right and wrong. It is right, because there is no simple budget constraint. It is wrong, because it will prove impossible to manage an economy sensibly once politicians believe there is no budget constraint.

Matthew C. Klein and Michael Pettis, Yale University Press, RRP$28/£20

This is a very important book. Its central argument is that “A global conflict between economic classes within countries is being misinterpreted as a series of conflicts between countries with competing interests. The danger is a repetition of the 1930s, when a breakdown of the international economic and financial order undermined democracy and encouraged virulent nationalism.” Policies that generate high inequality and excessive private savings must end if economic stability is to be restored.

Grzegorz W. Kolodko, I.B. Tauris, RRP$21.66/£16.09

The rise of China is the greatest political and economic event of our era. Grzegorz Kolodko, a former finance minister of Poland, has produced a thoughtful, balanced and penetrating analysis of the global implications. He is particularly concerned by the desire of the US to turn China into an enemy. But, he notes, “China does not wish to turn other countries into foes . . . It’s astounding, but China seems to better understand what’s at stake at the current civilizational crossroads.” Alas, he is right.

Eric Lonergan and Mark Blyth, Agenda Publishing, RRP$16.95/£12.99

We live in angry societies. This book, built around lively dialogues between the two authors, explains why that should not be surprising, given what has happened over the last few decades. Crucially, it also explains that such anger can be expressed in two different ways, as a morally anchored demand for the righting of wrongs or as an identity driven demand for punishment of the “other”. The authors explain how to deliver the former. Unfortunately, the latter seems to be winning.

William A. Macdonald, McGill-Queen’s University Press, RRP$37.95

The theme of this book is the necessity of mutual accommodation if civilised societies are to endure. The author, a Canadian lawyer and adviser to business and government, argues that a commitment to co-operation, compromise and inclusion is the core Canadian value. It has allowed an increasingly diverse country to function successfully. Above all, he argues, this is the only possible basis for a successful world order in today’s difficult and threatening era.

Thomas Piketty, Belknap Press, RRP$39.95/£31.95

Only Thomas Piketty would dare to write a book of more than a thousand pages in the confident expectation that it will become a bestseller. Whether it will be well read, too, is more doubtful. Nevertheless, this is an immense work of scholarship on the history of inequality. It also contains a penetrating analysis of contemporary politics, especially the failures of what Piketty calls the “Brahmin Left”, along with a radical new programme of socialist egalitarianism.

Robert Skidelsky, Yale University Press, RRP$25

This is an important and fundamentally correct critique of the core methodology of economics: individualistic; analytical; ahistorical; asocial; and apolitical. What economics understands is important. What it ignores is, alas, equally important. As Skidelsky, famous as the biographer of Keynes, notes, “to maintain that market competition is a self-sufficient ordering principle is wrong. Markets are embedded in political institutions and moral beliefs.” Economists need to be humbler about what they know and do not know.

Gene Sperling, Penguin, RRP$28

Gene Sperling, chief White House economic adviser to presidents Clinton and Obama, addresses a central question: what is the goal of economic policy? His answer is “economic dignity”. By this, he means the capacities to care for family while being also able to engage in family life, “to pursue purpose and potential”, and, finally, to work without suffering abuse, domination or humiliation. Sperling thus sets out a socially inclusive form of dignity against the exclusive dignity that may be derived from race, religion or some other signifier of division. It is a noble aspiration.

A World Without Work: Technology, Automation and How We Should Respond

Daniel Susskind, Allen Lane, RRP£20

Daniel Susskind of Oxford university has written an important book on a vital topic: the future of work. He is both an optimist and a pessimist. He believes humanity is on the way to becoming unimaginably prosperous. But many human beings will become as economically irrelevant as horses — once valued for “horsepower”, after all — are today. If he is right, huge questions about the distribution of income, access to power and ability to live meaningful lives will arise. I hope he is wrong. But we need to be prepared.

Pavlina R. Tcherneva, Polity, RRP$12.95

Radicals currently have two big proposals to fix the ill of economic insecurity. One is a universal basic income (on which see Geoff Crocker’s book). The other is a jobs guarantee. Pavlina Tcherneva sets out the case for the latter guarantee, in detail. This is, she argues, to be introduced in conjunction with a “Green New Deal”. One does not have to agree with her argument to recognise that this book is both important and timely.

Trade and American Leadership: The Paradoxes of Power and Wealth from Alexander Hamilton to Donald Trump

Craig VanGrasstek, Cambridge University Press, RRP£30.99

Craig VanGrasstek of Harvard’s Kennedy School provides a masterly overview of US trade policy. The international order created by the US after the second world war was, he argues, a great success. Today, however, “an overreaction against the perceived excesses of globalization” threatens to overturn the foundations of that order. Yet “the radically anachronistic policies” of the Trump administration “are unlikely to deliver prosperity or strength. They instead threaten to render the US economically impotent and politically impoverished.”

Fully Grown: Why a Stagnant Economy is a Sign of Success

Dietrich Vollrath, The University of Chicago Press, RRP£27.50

Why has the growth slowed in the high-income countries, notably the US? Is this a sign of failure or of success? Vollrath, who teaches at the University of Houston, argues that it is the latter. Thus, the main reasons for the slowdown in the early 21st century are demographic — smaller family sizes and ageing — and the shift from goods to services. The failure to accelerate the overall rate of growth of productivity in services is striking. Given that reality, Vollrath is right.

What are your favourites from this list? And what books have we missed? Share your suggestions in the comments below

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