by William N. Goetzmann ‧ RELEASE DATE: June 1, 2016
For the numerate and fiscally wonky, an accessible survey that does a fine job of reallocating past, present, and future.
A financial economist’s view of credit, investment, speculation, and other matters of the pocketbook.
The study of finance is traditionally the finest layer of dust on the stack of arid tomes devoted to the dismal science. The Cyndi Lauper echo of the title aside, Goetzmann (Finance and Management/Yale School of Management; co-editor: The Origins of Value: The Financial Innovations that Created Modern Capital Markets, 2005, etc.) doesn’t exactly shift the discussion into pop territory. However, his book is more accessible than many in the field, positing that the instruments of finance have done more than their share to make civilized life possible. The author invites us to consider that a principal effect of finance is to travel in time: that is, finance “reallocates economic value through time,” linking present and future while also shifting the burden of risk to allow investors and states to do such things as build infrastructure. Finance also involves an increase in social complexity, requiring alphanumeric language for record-keeping and bureaucrats to keep track of things, so that finance is responsible for state-building. Among the earliest financial documents we have, writes Goetzmann, are clay tablets recording impossible debts denoted by absurdly gigantic numbers: “The ability to imagine and then to express such vast quantities,” he writes, “would not have been possible without the leap of mathematical abstraction in the Uruk period.” So, too, with Chinese record-keeping systems involving great quantities of grain offered in tribute by great numbers of people. Throughout, in perhaps an accidental theme, Goetzmann’s narrative offers numerous examples of the inequalities wrought by financial systems, whether the medieval practice of “tax farming” or the speculative schemes floated by a well-known Founding Father. Of considerable interest is the author’s brief closing look at future possibilities for financial regimes, such as a sovereign wealth fund to bolster some version of social security.
For the numerate and fiscally wonky, an accessible survey that does a fine job of reallocating past, present, and future.Pub Date: June 1, 2016
ISBN: 978-0-691-14378-1
Page Count: 576
Publisher: Princeton Univ.
Review Posted Online: April 10, 2016
Kirkus Reviews Issue: May 1, 2016
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by Abhijit V. Banerjee & Esther Duflo ‧ RELEASE DATE: Nov. 12, 2019
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
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More About This Book
SEEN & HEARD
by Rebecca Henderson ‧ RELEASE DATE: May 1, 2020
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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