A miscellany of reading

The weeks shoot past, and here I am again doing a catch-up – I blame the end of term, and a week of lectures at the University of Bayreuth, as well as general day job activities. Anyway, I’ve read a few excellent – and varied – economics books along with a selection of fiction.

First up, Ben Chu’s Exile Economics. This is an excellent overview of the changing global order, and the turn from globalisation to autarky (or ‘exile economics’, even if more in rhetoric than reality even now. The book begins with the intellectual and political origins of this turn, braiding together events like the financial crisis with the multiple strands of thinking that make up modern Trump-style autarky. Successive chapters then use a particular theme as a lens on the shift from acceptance of global interdependence to the idea of self-reliance: for example, food, energy, people, medicine.

The final chapter is bravely titled “The Future”. It ends with a telling story about the young Ben Chu visiting China with his family for the first time, in 1985. He was shocked by the low standard of living of his relatives in Guangzhou – a standard utterly transformed for the better by globalisation. But the vulnerabilities and economic failures created by globalisation are clear. It has failed to deliver for many people, as opposed to corporates. Some countries have certainly seen a hollowing out of their production capabilities in important sectors. Yet – he writes – “When I began researching this book I was sceptical of the case for dismantling global supply chains. Now my sense is that anyone who advocates it … has simply not examined these supply chains closely enough.” The book ends with a plea for policymakers to focus on developing economic strengths rather than on weakening interdependencies. We will see. A really interesting read, enlivened by the author’s reporting and a lovely writing style.

71IfNiLs87L._AC_UY327_QL65_I suppose Hilary Cottam’s The Work We Need could be read as an antidote to the casualties of the globalised economies. Its question is how to redesign the future of work, particularly for those in low-paid or insecure or unpleasant or disrespected jobs and communities. The book draws from a series of community events she organised in the UK and US, Imaginings. These events asked participants to redesign their working lives. What form would work take, and what would be needed to enable change? Six themes emerged, getting a chapter each: Basics – enough to live on; Meaning; Care and repair; Time; Play; and Place. The chapter on time was particularly interesting to me, as I’ve been for a while thinking about the use of time as a better way of accounting for what’s happening in the economy. It crops up in discussions about hybrid work and the four day week. Digital platforms torpedo workers’ control over their time.

The Work We Need is an inspiring book, and it does end with a call for a radical rethink of how the world of work – and therefore most people’s days – is organised. A chapter on ‘The Just Transition’ makes the case for the scope for intellectuals, enlightened intellectuals and governments to bring about a shift. It’s an optimistic end; Hilary writes: “Injustice is acute, divisions between geographies are deep, political populism grows and the lived realities for many are painful.” She sees this as evidence for a turning point. I applaud the optimism – but it does seem a world away from the prevailing conversation about work, namely how many jobs will be eaten by AI.

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Something completely different: A Modern Economic History of Japan by Russell Jones. The author wrote an excellent modern economic history of the UK a while ago, The Tyranny of Nostalgia. This new book is just as interesting, beginning with a bit of the prewar history but focusing on the postwar era to Abenomics. It takes a macroeconomic perspective, so most of this was new to me, as the little I know about Japan concerns industrial policy, the supply side. Russell Jones spent years working in Japan and this shows in his sensitivity to the way the country’s history shaped modern policy choices. I don’t feel qualified to comment on the analysis, as a very much non-macro person, but I learned a lot.

81wSs3lhNUL._AC_UY327_QL65_Transitioning from economics to my broader reading, I polished off Fiona Hill’s memoir There is Nothing For You Here. She grew up in a working class family in the north east of England and ended up as a Russia expert, a scholar at Harvard and a Washington insider, working – albeit briefly and not happily – for the first Trump administration. So it’s a fantastic read as a personal saga. The point of the book, though, is how to begin to tackle what has gone wrong for the past 40 years and more for the kind of community she grew up in, and thus how to tackle some of the root causes of divisive populism.

Finally, some other reads in between:

Challenger by Adam Higginbotham. Utterly gripping account of the technical, organisational and personality contributors to the tragedy of the 1986 launch explosion.

Paper Cage by Tom Baragwanath – a very readable thriller set in a Maori community.

Fortress of Evil by Javier Cercas – final book in the Tera Alta trilogy; I loved these.

On The Calculation of Volume I by Solvej Balle. Weird. A sort of groundhog day tale of nothing happening. Not my cup of tea.

Gabriel’s Moon by William Boyd. Excellent accidental spy romp.

A Case of Matricide by Graeme Macrae Burnet. Another part three of a trilogy, the dark side of dull small town life in France. I enjoyed them but they might be an acquired taste.

Broken Threads by the wonderful Mishal Husain. Another page turner, a family memoir covering the end of British empire in the Indian subcontinent and the horrors of the 1947 partition.

 

Businesses and economists

I’ve been reading an interesting little book, Price Setting by Truman Bewley. He did something that’s still quite unusual for economists (despite the excellent work by Stefanie Stantcheva): asking people what they think. In this case, it was asking hundreds of American businesses over a period of years how they set prices.

Most of the book consists of direct quotations from interviewees across a range of industries: manufactures, restaurants, construction, feed grains etc. Two types of price setting emerged. Sellers of highly differentiated products seldom cut prices, on the basis that demand is relatively inelastic, and it upset their customers too much to raise prices so better not to get into the position of needing to do so. Sellers of commoditised products vary prices substantially, but are increasingly turning to ‘formula based pricing’ such as indexation to a specific spot price or a price series published by trade organisations.

Nobody ever referred to monetary policy and the Fed. Nor did they talk about their decisions in terms of cost based pricing and stable marginal variable costs. Bewley states: “Marginal variable costs of manufacturing firms tend to remain constant or to decline as a function of output until capacity is reached, at which point marginal variable costs rise abruptly.” He calls this counterintuitive, although it doesn’t seem so to me, when you think about vintages of capital and capacity utilisation patterns.

In fact there’s a rather endearing tone in the book of a Martian explorer trying to explain humans to his fellow Martians in their own Martian language; businesses just don’t think in standard economic concepts so what they say needs translating. Similarly with productivity and no doubt other concepts too.

Although another way of thinking about it is that the margins economists assume are the important choice variables are not; other margins (quality, technology…) may be more important. When I was on the UK Competition Commission and we asked about price setting, the answer was almost always ‘what the market will bear’ and other variables preoccupied the management – although clearly this was a sample who found themselves in a competition inquiry.

Screenshot 2025-06-10 at 08.56.27Anyway, kudos to Truman Bewley for embarking on this interplanetary exploration. It’s the kind of book economists (including macro types) should read before they pick up their modelling pencils.

 

What I’ve been reading

A bit of a catch-up.

Last weekend we went to the Hay Festival and heard Rebecca Solnit in conversation with James Rebanks. So I read her latest book of essays, No Straight Road Takes You There. I think it’s one of her best essay collections – suprisingly comforting. The intro title sort of sums it up: “In praise of the indirect, the unpredictable, the immeasurable, the slow and the subtle.” When asked about how to respond to These Times, her answer was: do what you can, save what you can. Nothing is inevitable but there isn’t an easy direct route to better outcomes than look likely at the moment.

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We also heard at Hay Javier Cercas talking to Kirsty Young about his Terra Alta detective series. The first one, Even The Darkest Night, was fantastic, I’ve been saving the second, Prey for the Shadow, and the third (of a trilogy), Fortress of Evil, is just out. Highly recommended – and Cercas was very funny and charistmatic.

I just finished Daniel Dennett’s memoir, I’ve Been Thinking. I loved this, very readable and lots of inside-the-academic world gossip and insight. One of the highlights of my life to date was when – on one of only two times I’ve endured Davos – he came to hear me talk about GDP.

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I also enjoyed Doyne Farmer’s Making Sense of Chaos: A Better Economics for a Better World, now in paperback. As anybody who knows his work would expect, it focuses on complexity and agent-based modelling for the better economics. It’s a very clear explanation of their merits, and the demerits of standard macroeconomic forecasting. I’m not a complete convert but perhaps I should be: two brilliant young researchers he refers to a lot in the book are former Bennett Institute postdoc Penny Mealy and our current research affiliate Maria Del Rio Chanona. If they think this is the way to go, I don’t want to disagree with them.

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Also, some novels:

The Cafe with No Name by Robert Seethaler, a decent enough read but disappointing after I’d seen so many glowing reviews

Measuring The World by Daniel Kehlmann, tremendous, an absolute page-turner, which is surprising when you realise it’s about two 18th century German scientists

The power of ideas

Some years ago I read Masters of the Universe by Daniel Stedman-Jones, a history of the Mont Pelerin Society with a focus on how it came to have such a profound influence on policy, first in the UK and US through Thatcher and Reagan, and subsequently on the whole western world. It made a big impression on me, opening my eyes to the Milton Friedman assertion about how important it was to make sure the ‘right’ ideas were around, in the air, when a moment of crisis created political opportunities. The Mont Pelerin economists had kept the free-market faith from 1945 onwards, working at building their institutional network (mainly via Chicago) and seeding their ideas.

I’ve now read The Great Persuasion by Angus Burgin, which covers the same history from a slightly different perspective. Its emphasis is less on the practical politics, more on the evolution of the ideas of the Society’s members (including its internal rifts). One of the same points about Hayek and his colleagues jumps out, though: “In adopting this strategy [avoiding policy engagement], they demonstrated an extraordinary faith in the capacity of abstract ideas to generate substantive political change,” Burgin writes.

Indeed Milton Friedman, a great communicator, was one of the first leading lights to embrace public engagement much more actively – his most influential article was probably a New York Times essay, on maximising shareholder value, still distorting our economies. The book also underlines how much the core ideas of the Society shifted over time, from an initial postwar insistence on the importance of government and rebuttal of ‘Manchester’ laissez faire, with the shift from Europe to Chicago and the growing influence of right wing American donors – and of the dominance of economists as opposed to philosophers.

The two books are good complements, along with Quinn Slobodian’s books on neoliberalism. I haven’t yet read his latest, Hayek’s Bastards, but the earlier Globalists is well worth a read.

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Turn Left

I’ve been letting these posts about my reading slip recently, for reasons of general busy-ness. The last thing I want to do of an evening or lunchbreak is more sitting at my screen, especially in such lovely sunny weather. Still, time to return with a recommendation for a lovely memoir. It’s Turn Left by Illah Nourbakhsh, a computer science professor at Carnegie Mellon.

The book isn’t about computers and AI, or very little. It is the story of an immigrant from Iran to the US at a young age, and the book begins with how – interesting – his original nationality makes it to fly in and out of the US (this was written well before Trump). There follows what is in many ways a classic immigrant tale – the navigation between two cultures, striving for and achieving success – and it’s a beautifully written story. Nourbakhsh writes: “Every immigrant who has lived here for decades spends much of their time in a self-constructed bubble, with friends and collagues who almost never bring up the whole immigrant thing. But the boundary moments are an exception, when we operate outside our constructed social networks and suddenly become immigrants again.”

However, the book does end with his work in the CREATE Lab at Carnegie Mellon, whose motivation he describes as follows: “I was constantly troubled by the collision of complex ideas [in this case about autonomous vehicles] and what I saw as the technologists’ Achilles heel: a total lack of reflection regarding systems-level change and unintended consequences.” The CREATE Lab for community robotics was established to counter such techno-optimism; it takes on technology projects co-produced with the community – although as he points out, funders tend to want big and shiny tech projects rather than community-scale ones.

One example is a community project to measure illegal emissions of pollutants from a factory; the data gathered through sensor systems and analysis, linking the plant to local asthma and cardiovascular disease, eventually led to its closure. Nourbakhsh writes: “This is a story of community empowerment – of rebalancing the broken power structures in our society that provide privilege, expertise and believability to corporations and government over the people. It is totally unacceptable that rebalancing such inequity requires years of work and foundation funding for a technology lab in a university; but that is the fight we choose to embrace.”

Cue loud cheers. I thoroughly enjoyed reading this book. I love its author’s philopsophy of life – it ends with the idea of ‘left turns’, the unanticipated changes of direction in career or life; or there’s the imperative to “move at the speed of trust,” without breaking things. I read the book in proof last autumn; it makes for poignant reading now the rich and powerful have tipped the balance back in their own favour in the US. But all the more important to have reminders like this about the right direction.

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