There is already a growing pile of books about the 2008 financial crisis, the biggest catastrophe to hit the banking world since the Wall Street crash. My favourites so far have been Michael Lewis's The Big Short,  a brilliant account of the traders who saw the storm coming, and Matt Taibbi's Griftopia, for sheer shock and entertainment.  But with Too Big To Fail  the New York Times reporter Andrew Ross Sorkin may have given us the definitive history that historians will turn to in years to come.

Sorkin's book is in the grand tradition of American reportage. He documents in the most meticulous fashion every twist and turn that led to that manic week in September when no bank – not even Goldman Sachs – seemed safe and every day threatened to tip us into the financial abyss.

But he also has a fine eye for the colourful detail which brings the whole story alive – Hank Paulson throwing up in the Treasury wastepaper bin as the tension gets to him, then-New York Fed chief Tim Geithner running through Manhattan streets at 6 a.m, trying to clear his mind before another day of financial fire fighting.

And the portraits of the self-regarding titans of Wall Street are fabulous. Lehman's Dick Fuld, an intimidating presence who had earned his spurs as a single-minded trader, beginning to fall apart as his bank slides towards the precipice.  Jamie Dimon of Morgan Stanley losing his cool during talks with the crumbling insurance giant AIG: “This is amateurish, it's pathetic…. you guys need to get a handle on the numbers.”

And British readers will particularly enjoy this portrait of the Barclays CEO John Varley: “…soft spoken and courteous,  he wore suspenders every day.” (NB for American readers: suspenders in British English hold up ladies' stockings rather than men's trousers.)
 
These corporate moguls had been cocooned in a private world, where flying commercial rather than climbing aboard the private jet was seen as an unimaginable hardship. Now they were being dragged blinking into the light,  summoned to the New York Federal Reserve and to Washington as the crisis engulfed them.

On the other side of the table, the regulators – Paulson, Ben Bernanke,  Geithner – are painted more sympathetically, as well-meaning but increasingly helpless lifeboatmen, struggling to keep the banks afloat, while ducking the brickbats from Capitol Hill.

So how did it happen? Sorkin is perhaps better at reportage than analysis – he seems to have been hiding under the table at every crucial meeting. But one quote from the Bank Of England Governor Mervyn King at a bankers' dinner at the US Treasury seems particularly apt: “You are all bright people but you failed,”he tells them. “So the lesson is we can't let you get as big as you were, and do the damage that you've done or get as complex as you were.”

And that was six months before the fall of Lehmans. The bright people had plenty more failures ahead of them.

Rory Cellan-Jones can be found on Twitter as @ruskin147

The in-pile has been growing again and I don't know which of the following books to choose next:

Triumph of the City by Ed Glaeser – one of the most thoughtful and creative economists around, and a terrific subject too, what it means for the world to be more than half urban now. I like the fact that it includes cities from Manchester to Lagos. I've started this so it will probably be at the head of the queue. It has already been reviewed in The Economist and New York Times.

Getting Better: Why Global Development is Succeeding by Charles Kenny – an experienced development economist argues that there has been historically unprecedented progress and the world is a far better place than 60 years ago, even in countries where there seems to have been little economic growth.

Beyond Mechanical Markets: Asset Price Swings, Risk and the Role of the State by Roman Frydman and Michael Goldberg – which argues that financial markets are neither perfectly rational nor irrational but need to be explained with reference to imperfect information. Roman Frydman is speaking soon in London and I'm excited about hearing him.

Beyond the Corporation: Humanity Working by David Erdal – looking at the benefits of shared-ownership businesses (which don't pay their CEOs silly amounts of money because they are well-governed). I'm going to be reviewing this one for The Independent.

For all those interested in current events – and who isn't? – Yale University Press is offering a free download of chapters from some of its books on the region. It covers Algeria, Egypt and Yemen.

The featured books are:
Egypt on the
Brink: From Nasser to Mubarak Tarek Osman looks at the situation of
his fellow young Egyptians – tech-savvy and full of passion, but deeply
frustrated by the corrupt, economically stagnant Egyptian state.

Algeria: Anger of the
Dispossessed Martin Evans and John Phillips ask how long Algerians
will put up with their repressive military regime, whose only opposition
consists of intermittent al-Qaeda attacks.

Yemen: Dancing on the
Heads of Snakes Victoria Clark analyses the prospects for a country
with 40% unemployment, near-exhausted water supplies, and a long-running
rebellion in the southern provinces.

In my review here of Walter Russell Mead's God and Gold: Britain, America and the Making of the Modern World I forgot to mention how amusing it is, and stuffed with anecdotes that my magpie mind adores.

For example, the origins of the Bank of America were new to me (pp141-143) – the Bank of Italy as it was known until 1930, founded by one A.P. Gianni, the self-taught son of Italian immigrants. Mead writes: “Gianni's business model was as simple as it was revolutionary.” It was – integrity. His customers trusted him and he chose customers whose character and judgment he trusted. What's more, his new bank provided financial services to ordinary people. Its innovations such as the long term self-amortizing home mortgage, municipal bonds, automobile credit served the great majority of the population – a contrast with the modern tendency for financial innovations to serve the better-off. Well-off customers can change their pension investments from their smartphones but people on low incomes living in the wrong postcode can't even get a current account.

I also laughed a lot at a chapter on the religious and doctrinal battles of the 17th century. Really. Mead's thumbnail sketch of Church of England pragmatism is funny, accurate – and aroused a sense of national pride. How marvellous that the poet John Dryden wrote a defence of the CofE in iambic pentameter! How characteristic of the national church not to worry overmuch about doctrine but to remain even now very firm about unseemliness in royal marriages.

Mead writes (p205):

“Deprived of the comforts of an absolute or closed philosophy, poor Nietzsche stared into the philosophical abyss and groaned with sick, fascinated horror: 'Nothing is true and everything is permitted.' That hasn't been the Anglo-Saxon response. English bishops saw this truth and saw not the slightest reason to leap into any abysses. .. Instead, they went on to set out the rules for finding Easter each year.”

There is much more entertainment. The book is a great read.

Whether one agrees with Mead's conclusion – in effect a Whig interpretation of history – that the open, sceptical, pragmatic Anglo-Saxon way points to progress and will ultimately triumph over other approaches is another matter. I think so but am not as sure as Mead. Having now seen both Eastern Europe in 1989-90 and the Middle East in 2011 choose traditional freedoms, perhaps my lifetime will also see the ultimate test: will China – as Ian Morris argues – become the world's dominant power? Can it do so without permitting any of the classic liberal political freedoms? Is a dynamic, open market economy compatible with authoritarian politics and repression of speech?

I've been in the mood for the grand sweep of history – no wonder with the images on TV so reminiscent of 1989 – and catching up with a book published a few years ago, Walter Russell Mead's God and Gold: Britain, America and the Making of the Modern World. He makes almost the opposite argument to the one made by Ian Morris in his Why the West Rules For Now, which I reviewed here recently. Whereas Morris says that in the grand scheme of human history there is relatively little difference between the trajectories of West and East, but the East may soon overtake the West for a few centuries, Mead's is an argument about Western supremacy.

Specifically, he means Anglo-Saxon supremacy. This is not a national or ethnic marker, but rather a cultural one, a liberal, pragmatic, open mindset. (He and I use 'liberal' in the British/Enlightenment sense, not the politicised American one.) From the days of William and Mary, the policy of building British maritime power and the British Empire created a virtuous circle between trade, economic dynamism, financial innovation and military success. When British dominance slipped, American imperial power (albeit with a small 'i') took its place. Mead also weaves in the sense of moral superiority displayed by the two free-trading, financially free-wheeling liberal democracies. In each war, whether against Napoleon or Hitler, God was on the side of gold. “That God is a liberal has been the great fundamental conviction of the English-speaking powers since the English reformation, and, if history is the mirror of Providence, they were right.”(p81)

An important strand of Mead's argument is that economic strength built on trade and command of the oceans has led to military success: “The Anglo-Americans' enemies all go bankrupt.” (p111) He claims the Anglo-Americans or international WASP tendency – the Australians, New Zealanders and Canadians are included – have never lost a proper war. Military defeats are all painted as temporary setbacks.

This irked some reviewers when the book was first published – What about Iraq? asked Johann Hari in the New York Times. Another question now might be, what about the crash? It's harder than in 2007 to paint the global financial markets as the pinnacle of Anglo-American capitalism. Mead has fun (p127ff) pointing out the number of times pundits have cried wolf over the impact of ever-climbing national debt. He notes that Britain's national debt stood at 268% in 1822, but it could bear the burden and prosper. I'm not so confident about the ability of either the UK or US to bear the burden now, as the baby boom ages and productivity growth slows back down to a crawl.

On the other hand, we might also ask, What about Tunisia, Egypt, Bahrain, Libya, Yemen etc etc? Liberal democracy might well, it seems, be a lasting global legacy of the Anglo-American order. It's a question the Chinese authorities will be asking themselves in the centuries-old dance of civilisations.

God & Gold is a beautifully-written book and full of facts and arguments both compelling and provocative. If it won't risk a clash between the Anglos and the Americans, I'd describe it as just my cup of tea.