More holiday reading

One of my other holiday books was Orhan Pamuk’s [amazon_link id=”0571275990″ target=”_blank” ]A Strangeness in My Mind[/amazon_link]. I love all his books – his ability to make real the characters of people so very different from the reader is extraordinary. Given the context of what’s happening now in Turkey, all the more reason to read this saga of family life from a village in Anatolia in the 1960s to Istanbul now. This is a love story, a reflection on family, but it sheds much light on the rural to urban shift, the clash of cultures, the effects of the deracination caused by migration, the corrosiveness of poverty, the tension between secular modernism and Islamic traditions.

[amazon_image id=”0571275990″ link=”true” target=”_blank” size=”medium” ]A Strangeness in My Mind[/amazon_image]

And I *loved* China Mieville’s [amazon_link id=”033053419X” target=”_blank” ]The City and The City,[/amazon_link] a random title picked for Son 2, who ignored it. I’ve read a couple of his others. This one is pure genius, an apt read for these increasingly nationalistic times.

[amazon_image id=”033053419X” link=”true” target=”_blank” size=”medium” ]The City & The City[/amazon_image]

As well as a few thrillers, of varying quality, I read Brooke Harrington’s [amazon_link id=”0674743806″ target=”_blank” ]Capital Without Borders[/amazon_link] and Ryan Avent’s [amazon_link id=”0241201039″ target=”_blank” ]The Wealth of Humans[/amazon_link] and will post reviews closer to their publication date.

Summer murder

One of the joys of being on holiday is of course the extra reading time. Among the thrillers and novels, I read Jill Leovy’s [amazon_link id=”1784700762″ target=”_blank” ]Ghettoside: A True Story of Murder in America[/amazon_link]. It’s a brilliant piece of reportage about the many murders of young black men in southern Los Angeles, mainly killed by other young black men.

[amazon_image id=”1784700762″ link=”true” target=”_blank” size=”medium” ]Ghettoside: Investigating a Homicide Epidemic[/amazon_image]

The book mixes in a gripping narrative a few individual cases – the dead youths and their families, the immediate events, the detectives working on the case – along with a wider analysis of both the sorry history of the high murder rate and the structures of society and policing that (she argues) largely account for it. Leovy’s fundamental point is that the apparent lawlessness of the ghetto is in fact the law of the streets filling the vacuum left by the absence of ‘normal’ law, and the state’s abdication of its monopoly of violence in such territories. She, like her few heroic detectives working hard to solve every case like any other murder, sees the absence of genuine law enforcement as the root problem.

As she writes: “Gangs could seem pointlessly self destructive, but the reason they existed was no mystery. Boys and men always tend to group together for protection. They seek advantage in numbers. Unchecked by a state monopoly on violence, such groupings fight, commit crimes, and ascend to factional dominance as conditions permit. Fundamentally, gangs are a consequence of lawlessness, not a cause.”

One of the eye-opening aspects of the book lies in its descriptions of how little resource the homicide divisions in the south of LA have been allocated, compared to policing fads such as visibly patrolling streets, or preventive schemes. This extended to under-manning, overtime bans (on murder cases!), not allowing detectives to take their cars home, and even stationery shortages.

Interestingly, the epilogue describes a recent steep reduction in the murder rate, albeit remaining many times higher than other parts of the city and state. Leovy argues that there have been a number of contributory factors including demographic change (fewer blacks and more Hispanics in the city itself) but highlights in particular a significant increase in social security payments to poor black people, specially men, and especially to people coming out of prison. Supplemental Security Income payments give individuals a crucially different set of incentives: “Money translates to autonomy. Economic autonomy is like legal autonomy. It helps break apart homicidal enclaves by reducing interdependence and lowering the stakes in conflicts.” It is easier to walk away from the calling in of tit for tat favours by other gang members. Leovy suggests the Affordable Care Act will reinforce this autonomy. The section briefly notes the high rate of imprisonment too – David Skarbek’s [amazon_link id=”0199328501″ target=”_blank” ]The Social Order of the Underworld [/amazon_link]is a great complement to this book, looking specifically at the interactions between gangs and the US penal system.

Still, Leovy concludes, it is important not to lose sight of the key lesson that too little policing and enforcement of the law is corrosive. Every desperately sad story in this book underlines the message.

Money and civilization: it’s complicated

William Goetzmann’s [amazon_link id=”0691143781″ target=”_blank” ]Money Changes Everything: How Finance Made Civilization Possible[/amazon_link] is exactly the kind of book I find relaxing to read before going to sleep. Apart from the fact that it’s too chunky to carry around, it is a panoramic historical sweep packed with interesting nuggets.

[amazon_image id=”0691143781″ link=”true” target=”_blank” size=”medium” ]Money Changes Everything: How Finance Made Civilization Possible[/amazon_image]

Money is hardly my Mastermind special subject, and I certainly don’t get emotional about it as so many commentators do. So I have no view about the criticism of the book by people like this reviewer, whose point seems to be that Goetzmann doesn’t agree with every word of David Graeber’s [amazon_link id=”1612194192″ target=”_blank” ]Debt[/amazon_link] . I’m certainly not going to opine about pre-history. However, Goetzmann is making a far more general argument, rather than a specific case about the role of debt in ancient society (& anyway I think that particular dyspeptic reviewer significantly misrepresents the book’s argument).

Goetzmann’s point is that there is an intimate inter-relationship between financial arrangements and instruments and other economic and social institutions. Indeed, he argues that this is causal and financial innovations made ‘civilisation’ (in the sense of social and political changes observed through history) possible. Intellectual innovations like writing or probability theory, and social innovations like the intermediation of individual savings into investment at scale, were driven by finance. Of course, the causality runs the other way round too: certain economic and social institutions were necessary for financial innovations to occur. “The joint development of financial tools and complex society was a process of give and take on many levels.” It’s complicated, folks! Simple accounts are probably wrong.

Goetzmann is certainly not a financial determinist. He writes: “Necessity is the mother of invention. … Financial technology is redundant, adaptive, and sometimes mercurial. The institutions we take to be sacrosanct, inevitable and indispensable probably are not. Given the random outcome of historical events, another set of institutions might have emerged to serve the same financial problems. Financial innovation is thus a series of accidents of history – the caprice of time, location and opportunity.” This seems absolutely convincing to me, rather than any Graeber-like projection of ideology onto the past. And – as Goetzmann notes – “In times of financial crises, society has tended to express a collective nostalgia for a pre-financial world.”

The book is broadly chronological, starting in ancient Mesopotamia, visiting China, mediaeval Europe, 18th century France and western Europe, back via Marx to China, then the 1920s, Keynes and the war, and a final short section on modern finance. There are all kinds of examples I didn’t know about – the Templars as bankers, the early example of corporate structure in the shape of Toulouse’s Honor del Bazacle. Like Jared Diamond through a different lens, Goetzmann sees the fragmentation and political competition of western Europe in mediaeval and early modern times as an important contribution to its subsequent reliance on capital markets. All very enjoyable, and I’d say essential for anyone interested in financial history.

Summer reading ctd.

I’m looking forward to having a couple of weeks in a place with no internet or 3G signal, and am piling up books to take. This includes a selection of detective fiction, this year:

[amazon_image id=”0552778362″ link=”true” target=”_blank” size=”medium” ]Linda, As in the Linda Murder: Bäckström 1[/amazon_image] [amazon_image id=”0755370007″ link=”true” target=”_blank” size=”medium” ]Vanished (Nick Heller 1)[/amazon_image] [amazon_image id=”1471137066″ link=”true” target=”_blank” size=”medium” ]Leaving Berlin[/amazon_image] [amazon_image id=”1782062084″ link=”true” target=”_blank” size=”medium” ]Extraordinary People: An Enzo Macleod Investigation (The Enzo Files)[/amazon_image]

Some serious fiction/non-fiction:

[amazon_image id=”0747596484″ link=”true” target=”_blank” size=”medium” ]The Suspicions of Mr. Whicher: or the Murder at Road Hill House[/amazon_image] [amazon_image id=”1784700762″ link=”true” target=”_blank” size=”medium” ]Ghettoside: Investigating a Homicide Epidemic[/amazon_image] [amazon_image id=”0571275974″ link=”true” target=”_blank” size=”medium” ]A Strangeness in My Mind[/amazon_image] [amazon_image id=”0099771810″ link=”true” target=”_blank” size=”medium” ]American Pastoral[/amazon_image]

A couple of forthcoming economics books, Brook Harrington’s [amazon_link id=”0674743806″ target=”_blank” ]Capital Without Borders[/amazon_link], and Ryan Avent’s [amazon_link id=”0241201039″ target=”_blank” ]The Wealth of Humans[/amazon_link].

[amazon_image id=”0674743806″ link=”true” target=”_blank” size=”medium” ]Capital Without Borders: Wealth Managers and the One Percent[/amazon_image] [amazon_image id=”0241201039″ link=”true” target=”_blank” size=”medium” ]The Wealth of Humans: Work and its Absence in the Twenty-first Century[/amazon_image]

I will need a couple of others just in case – suggestions welcome.

Of the books I’ve read recently, if anybody wants recommendations, Sam Bowles, [amazon_link id=”B01EUYN5GM” target=”_blank” ]The Moral Economy[/amazon_link] and two books on GDP, Phillip Lepenies [amazon_link id=”B01EB74DFU” target=”_blank” ]The Power of a Single Number[/amazon_link] and Ehsan Masood’s [amazon_link id=”1681771373″ target=”_blank” ]The Great Invention[/amazon_link] are all good reads. I enjoyed [amazon_link id=”1782111239″ target=”_blank” ]The Lonely City[/amazon_link] by Olivia Laing and [amazon_link id=”0553418084″ target=”_blank” ]Street of Eternal Happiness[/amazon_link] by Rob Schmitz. Francis Spufford’s [amazon_link id=”0571225195″ target=”_blank” ]Golden Hill[/amazon_link] is a terrific novel. And yesterday I pointed to my two recommendations for Nature’s summer reading section but all of the books nominated there are great.

[amazon_image id=”0300163800″ link=”true” target=”_blank” size=”medium” ]The Moral Economy: Why Good Incentives are No Substitute for Good Citizens (Castle Lectures Series)[/amazon_image] [amazon_image id=”0231175108″ link=”true” target=”_blank” size=”medium” ]The Power of a Single Number: A Political History of GDP[/amazon_image] [amazon_image id=”1681771373″ link=”true” target=”_blank” size=”medium” ]The Great Invention: The Story of GDP and the Making (and Unmaking) of the Modern World[/amazon_image]

[amazon_image id=”B014RK0QF2″ link=”true” target=”_blank” size=”medium” ]The Lonely City: Adventures in the Art of Being Alone[/amazon_image]  [amazon_image id=”1444791052″ link=”true” target=”_blank” size=”medium” ]Street of Eternal Happiness: Big City Dreams Along a Shanghai Road[/amazon_image] [amazon_image id=”B01FQVWXPW” link=”true” target=”_blank” size=”medium” ]Golden Hill[/amazon_image]

Summer reading – a prelude

It’s summer reading lists season & I think I’ll do one here at the weekend for all the saddo folks who (like me) will be taking some economics books away for the summer. Meanwhile, here’s the one from Nature which includes my recommendations: Robert Gordon’s [amazon_link id=”0691147728″ target=”_blank” ]The Rise and Fall of American Growth[/amazon_link], not because I agree with it (I don’t), but because it’s asking the right questions in a compelling way; and James Bessen’s [amazon_link id=”0300195664″ target=”_blank” ]Learning By Doing[/amazon_link], essentially about the same questions (and I do agree with it).

[amazon_image id=”0691147728″ link=”true” target=”_blank” size=”medium” ]The Rise and Fall of American Growth: The U.S. Standard of Living since the Civil War (The Princeton Economic History of the Western World)[/amazon_image]  [amazon_image id=”0300195664″ link=”true” target=”_blank” size=”medium” ]Learning by Doing: The Real Connection Between Innovation, Wages, and Wealth[/amazon_image]

I’ve been thinking a lot about productivity and GDP measurement, and am doing a paper on why the effect of digital is far more pervasive than much of this work recognises. Just recently I re-read after a very long time a 1994 AER paper by Zvi Griliches, Productivity, R&D and the Data Constraint. Zvi was one of my econometrics teachers when I was at Harvard, and a lovely man although terrifyingly clever (at least to a not very confident PhD student). The paper concludes:

“Knowledge is not like a stock of ore sitting there waiting to be mined. It is an extremely heterogeneous assortment of information in continuous flux. Only a small part of it is in use to someone at a particular point in time, and it takes effort and resources to access, retrieve and adapt it to one’s own use. Thus models of externalities must perforce be models of interaction between different actors in the economy. … Our measurement frameworks are not set up to record detailed origin and destination data for commodity flows and less so for information flows.”