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How to Run the Economy as If the Future Matters

by Diane Coyle

Pub Date: March 1st, 2011
ISBN: 978-0-691-14518-1
Publisher: Princeton Univ.

A grim view of the economic future and suggestions on how to sway the outcome, one penny at a time.

In this highly informed analysis, British economist Coyle (The Soulful Science: What Economists Really Do and Why It Matters, 2007, etc.) posits as a given that “more money makes people happier because it means they can buy more.” For readers who agree, it follows that national economies must continue to grow to avoid collective misery or worse. But how, the author asks, can they grow while dealing responsibly with future generations when they have already become fiscally, environmentally and socially unsustainable? No clear answers emerge here, and Coyle states frankly that outcomes are difficult to predict. What is clear, she suggests, is the inevitable breakdown of trust essential for national and global economies to run smoothly and growing inequities that violate even rudimentary concepts of fairness. Add to this an abiding loss of faith in institutions that don’t seem up to the challenge and the devastating trend of borrowing for social programs that is creating insurmountable future debt. Even with adjustments, what lies ahead is more work, less play and fewer holidays; reduced pensions and public services; and the necessity of more personal saving and less consumption. Coyle calls for steps including new and better economic measurements, a longer time frame for economic decision-making that takes into account future costs and impacts and government policies which enforce personal saving and business investment. There’s much to digest here, so the author’s tendency to repeat herself turns out to be helpful. Tough trekking but well worth the journey for this top-rank economist’s view from the summit.