Books at a workshop

An interdisciplinary workshop about capitalism was always going to generate an eclectic mix of books referred to; I always like to make a note of what crops up. So at The New Institute this week, the focus was Colin Mayer’s important recent book Capitalism and Crises, which centres on his proposal that profit maximisation should continue to be the aim of private companies but profit much be redefined to be net of the cost of any damages inflicted on the rest of society (including workers but not rival businesses in competitive markets). He argues that UK corporate law is already capable of this interpretation.

In the other talks, these other books mentioned make up a pretty good capitalism reading list – although I might have missed a few:

The End of Enlightenment by Richard Whatmore

Sense, Nonsense and Subjectivity  by Markus Gabriel

Capitalism and the Market Economy by Jonathan McMillan

Stabilising an Unstable Economy by Hyman Minsky

The Ethics of Capitalism by Daniel Halliday and John Thrasher

Noise by Daniel Kahneman

A Moral Political Economy by Federica Carugati and Margaret Levi

The Corporation in the 21st Century (forthcoming) by John Kay

The Coming of Managerial Capitalism by Alfred Chandler

Competition Overdose by Ariel Ezrachi and Maurice Stucke

Ecological Economics and the Ecology of Economics by Herman Daly

├ľkoliberal by Philipp Krohn

Governing the Commons by Elinor Ostrom

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The public option

I’m on my way to a workshop at The New Institute in Hamburg, where I will talk about the scope for a public option in (especially) digital markets. As preparation, I’ve read a recent short (and moderately technical) book surveying the literature on ‘mixed oligopoly’ by Joanna Potoygo-Theotoky; these are oligopolistic markets with a mixture of private and public provision, where the public competitor has a broader objective function than profit maximisation – such as social welfare broadly, or ESG motivations, or universal service obligations. The basic idea is that by having a different objective function, the presence of the public provider acts as a regulatory function; private firms will choose a lower price/higher quantity or will select to compete on a different level of quality.

I’m most interested in the latter area, where the formal results can go both ways. Public firms can either decide to offer a ‘basic’ package to deliver universal service or can offer a higher quality package than the private sector. Think of public schools vs private schools providing great sports fields and additional subjects in the former case, or public broadcasters ensuring provision of children’s programmes or religious programmes in the latter case. Given the concentration in digital markets and the limited tools governments other than the US and China have to affect the behaviour of Big Tech, provision of a public option in some domains is worth thinking about.

The book, Mixed Oligopoly and Public Enterprises, is a very nice survey and introduction to the mixed oligopoly literature, much of it focused on the price and quantity decisions and the optimal mixture of private and public, but covering some more recent literature on issues like R&D, quality and ESG standards. It also ends outlining a fascinating research agenda – introducing issues of motivation of employees, and even wider objectives such as creating jobs and reducing inequality.

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Homo Numericus

I’m at the tail end of finalising the draft of my next book, with an end-June deadline, so my reading recently has mainly been fiction, to rest the brain. I enjoyed the international Booker winner Kairos by Jenny Erpenbeck, and Annie Ernaux’s The Years, but not so much The Wren, The Wren by Anne Enright, whose characters just didn’t interest me. Aleksandar Hemon’s The World and all it Holds is magnificent. Noreen Masud’s A Flat Place is an amazing memoir.

Anyway, my new book will be called The Measure of Progress: How Do We Count What Matters? and will be out from Princeton in 2025.

Meanwhile, I have taken advantage of a rare sunny day to sit in the garden at the weekend and read Daniel Cohen’s final book, Homo Numericus: The Coming Civilization. I first met Daniel, who died in 2023, when I was in graduate school and he was down the road visiting MIT. He was brilliant, boundlessly enthusiastic, energetic, and warm. A co-founder of the Paris School of Economics, he wrote many successful popular economics books.

Homo Numericus is a broad reflection on the impact of the digital revolution on human society and life – so right up my street. It’s broadly pessimistic about what has happened so far – the inequality, surveillance, digital addiction, a familiar set of issues. The book then discusses what these imply for human behaviour and societal outcomes. For example, how does digital surveillance sit with increased individualism and individual choice?

It does end with a short conclusion that tries to sound an optimistic note about the potential for a less hierarchical, more co-operative society. I’m not sure it’s persuasively optimistic – the tone of the book is more that the contradictions of digital capitalism will not end well. As he writes, “Will modern societies be able to stop before they reach the abyss? As Georges Bataille said in his book The Accursed Share, societies always tend to go all the way to the end of their possibilities.”

Anyway, as in all his books, the range of Daniel’s thought and ideas is impressive and stimulating. It’s a shame the translation is so poor; I read the book in French first and the elegance of the writing is not well served by a very literal translation that sometimes sounds like AI had a role: “The porridge has an amusing taste.” Surely, “The porridge tastes funny”? But don’t let it put you off if you’re after a stylish, brief overview of the digital society and its human consequences.

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Reading on the go

I’ve been travelling, including a week of holiday, so my reading has leant more towards fiction than usual. (Tokyo – my first trip, highly recommended, loved the TeamLab exhibitions.) Among the non-fiction, though, were two excellent (non-economics) books: Philip Ball’s The Modern Myths (about exactly that – how Frankenstein, Dracula etc gained mythical status) and Christopher Clark’s Revolutionary Spring (about the revolutions across Europe in 1848).

Before getting fully back into the swing of economics reading, I just finished my colleague Martin Rees’s If Science is to Save Us. For somebody who worries a lot about existential risk, Martin is a sunny, cheerful person, and it’s an optimistic book reflecting on recent experience (especially during the pandemic) of the intereaction between science and policy. I found his chapter ‘Science Comes Out of the Lab’ particularly interesting as it includes some of Martin’s experiences including participation in the Pugwash conferences. He argues that the UK establishment is too much more secretive than the US establishment, to the detriment of both science and policy. It’s well worth a read for those interested in science policy.

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Uber goes to Washington

Uber arouses strong opinions, for some good reasons. The trouble is – for those who strongly dislike the company’s treatment of its drivers – that it offers a service users and even some drivers seem to like a lot. That tension is at the core of Disrupting DC: The Rise of Uber and the Fall of the CIty by Katie Wells, Kafui Attoh and Declan Cullen. While the authors are clearly Uber critics, they acknowledge that the interviews on which the book is partly based reveal both sides of the coin. The account it contains of how Uber interacted with policymakers in DC is interesting too, playing into the city administration’s desire to embrace innovation.

However, the key point, is that Uber’s opportunities stem from cities’ failures. I can remember the shock I experienced trying to take taxis even in central DC or to and from the airport back in the 1980s, when it seemed more like a developing country. In many cities Uber has prompted other tax companies to improve their service. Of course Uber – like many fintechs – is taking advantage of opportunities for regulatory arbitrage (and some regulation is good and necessary, other regulations not so much) but also of the failure of cities to provide other infrastructure. Its opportunity to claim to provide a less biased and more responsive means of public transport depends on the absence of good public transport.

The chapters are written by different authors so it’s a slightly disjointed read. I found the chapter on data interesting given my own work in this area – it beats me why regulators don’t require data access when they do any deals with private companies. But all round, worth a read as an interesting and nuanced Uber case study.Screenshot 2024-04-21 at 13.00.47