A readable, timely discussion of the world economic system.
Free markets are born of free societies. So why are our markets no longer free? Bad choices were made—therein lies the nub of Financial Times world trade editor Beattie’s excursus into economic history.
Progress, warns the author, is “fragile and reversible,” and there are no inevitabilities involved: Capitalism is neither intrinsically bound to fail nor predestined to succeed; the United States is not wealthy because of exceptionalism, Africa poor because of some sort of original sin. All these conditions turn on choices, some freely made, some made by custom and even accident. For instance, Beattie notes, in the 19th century Argentina had the opportunity to be as wealthy as the United States, with plenty of resources and land and millions of cows with which to feed a hungry Europe. What kept it from emerging as a major power was its rigid adherence to class and caste, with illiterate immigrants doing grunt work while the children of the aristocracy basked. Meanwhile in America, upward mobility was standard. Beattie writes that globalization is nothing new. The late-19th and early-20th-century market was global too, so that wheat farmed in Nebraska cost about as much in London as it did in Chicago and currencies were valued fairly evenly. There are many elements that fuel economic failures: inefficiencies and excessive waste, retreats from globalism, structural impediments (for example, it takes coffee beans a month to get across Africa, held up at one customs stand after another) and corruption. All these figure prominently in Beattie’s lucid exposition, which is often pleasingly arch, as when he likens a longshoreman’s union agitating against containerization to “bandits controlling the mountain pass.”
A readable, timely discussion of the world economic system.Pub Date: April 16, 2009
ISBN: 978-1-59448-866-5
Page Count: 340
Publisher: Riverhead
Review Posted Online: May 19, 2010
Kirkus Reviews Issue: Feb. 15, 2009
Occasionally wonky but overall a good case for how the dismal science can make the world less—well, dismal.
“Quality of life means more than just consumption”: Two MIT economists urge that a smarter, more politically aware economics be brought to bear on social issues.
It’s no secret, write Banerjee and Duflo (co-authors: Poor Economics: A Radical Rethinking of the Way To Fight Global Poverty, 2011), that “we seem to have fallen on hard times.” Immigration, trade, inequality, and taxation problems present themselves daily, and they seem to be intractable. Economics can be put to use in figuring out these big-issue questions. Data can be adduced, for example, to answer the question of whether immigration tends to suppress wages. The answer: “There is no evidence low-skilled migration to rich countries drives wage and employment down for the natives.” In fact, it opens up opportunities for those natives by freeing them to look for better work. The problem becomes thornier when it comes to the matter of free trade; as the authors observe, “left-behind people live in left-behind places,” which explains why regional poverty descended on Appalachia when so many manufacturing jobs left for China in the age of globalism, leaving behind not just left-behind people but also people ripe for exploitation by nationalist politicians. The authors add, interestingly, that the same thing occurred in parts of Germany, Spain, and Norway that fell victim to the “China shock.” In what they call a “slightly technical aside,” they build a case for addressing trade issues not with trade wars but with consumption taxes: “It makes no sense to ask agricultural workers to lose their jobs just so steelworkers can keep theirs, which is what tariffs accomplish.” Policymakers might want to consider such counsel, especially when it is coupled with the observation that free trade benefits workers in poor countries but punishes workers in rich ones.
Occasionally wonky but overall a good case for how the dismal science can make the world less—well, dismal.Pub Date: Nov. 12, 2019
ISBN: 978-1-61039-950-0
Page Count: 432
Publisher: PublicAffairs
Review Posted Online: Aug. 28, 2019
Kirkus Reviews Issue: Sept. 15, 2019
SEEN & HEARD
A readable, persuasive argument that our ways of doing business will have to change if we are to prosper—or even survive.
A well-constructed critique of an economic system that, by the author’s account, is a driver of the world’s destruction.
Harvard Business School professor Henderson vigorously questions the bromide that “management’s only duty is to maximize shareholder value,” a notion advanced by Milton Friedman and accepted uncritically in business schools ever since. By that logic, writes the author, there is no reason why corporations should not fish out the oceans, raise drug prices, militate against public education (since it costs tax money), and otherwise behave ruinously and anti-socially. Many do, even though an alternative theory of business organization argues that corporations and society should enjoy a symbiotic relationship of mutual benefit, which includes corporate investment in what economists call public goods. Given that the history of humankind is “the story of our increasing ability to cooperate at larger and larger scales,” one would hope that in the face of environmental degradation and other threats, we might adopt the symbiotic model rather than the winner-take-all one. Problems abound, of course, including that of the “free rider,” the corporation that takes the benefits from collaborative agreements but does none of the work. Henderson examines case studies such as a large food company that emphasized environmentally responsible production and in turn built “purpose-led, sustainable living brands” and otherwise led the way in increasing shareholder value by reducing risk while building demand. The author argues that the “short-termism” that dominates corporate thinking needs to be adjusted to a longer view even though the larger problem might be better characterized as “failure of information.” Henderson closes with a set of prescriptions for bringing a more equitable economics to the personal level, one that, among other things, asks us to step outside routine—eat less meat, drive less—and become active in forcing corporations (and politicians) to be better citizens.
A readable, persuasive argument that our ways of doing business will have to change if we are to prosper—or even survive.Pub Date: May 1, 2020
ISBN: 978-1-5417-3015-1
Page Count: 336
Publisher: PublicAffairs
Review Posted Online: Feb. 16, 2020
Kirkus Reviews Issue: March 15, 2020
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