It has taken me a while to read Ian Morris's magnificent Why The West Rules for Now – all 650+ pages of it. Although there's plenty in it to debate and challenge, his general hypothesis is persuasive and it's a terrific read.

Morris's argument goes like this: human social development is the result of an interplay between the upward pressure arising from our ever-evolving biological nature, on the one hand, and on the other hand the challenges posed by geography (mainly changes in climate) and the increasing complexity of social organisation. Like all living beings, we need to extract energy from our environment. Until the Industrial revolution, there were firm limits to our ability to do so. The earlier episodes in history when humankind had taken giant strides in social development had resulted from social innovations such as farming, urbanisation, centralised organisation in empires and nation states. Since around 1800, technological innovation has been the main driver. There is no guarantee of continuing progress. For lengthy periods in the past, human development has gone into reverse – both West and East had their long Dark Ages. But Morris is somewhat optimistic about our collective ability now to avoid that kind of catastrophic setback, when it took half a millennium for the level of development to return to its starting point.

He also discusses at length the dynamics of the process. There is a paradox of development: progress creates its internal tensions including population pressure and the challenge of organising an increasingly complex society. And there are advantages to backwardness: areas on the periphery are more inventive if they are economically marginal or face a less favourable environment. These dynamics mean that history is not 'locked in' – the West has not always been more highly developed than the East (for five centuries from around 1250 to 1750 it was the other way round). Besides, looking over the long sweep of history to 10000 BCE, the paths of East and West are strikingly similar – the people and the processes are the same everywhere. (See my earlier posts on measuring the level of development and on the earliest periods of human history.) However, the dynamics are also very slow so short-term reversals are unlikely.

This book sits firmly in the tradition of authors such as Jared Diamond in Collapse or Joseph Tainter. One grumpy review (by George Walden in the Guardian) has dismissed Morris's argument as completely overlooking the role of culture and ideas. That isn't correct. Rather, Morris sees these are the result of the geographic and biological conditions facing any given society. Conventional historical arguments, he suggests, explain why the Industrial Revolution centred on Manchester rather than Lille (p500) – British politics and institutions, its command of the seas, the character of its inventors. But the broader forces mean there would have been an Industrial Revolution about then somewhere in northern or western Europe. He says: “Intellectuals ask the question that social development forces onto them: each age gets the thought it needs.” (p476). I'm not sure this would satisfy Walden either, but it seems completely persuasive to me – ideas and culture do not emerge in a vacuum but are themselves shaped by society. They in turn shape the resilience of the society to fresh organisational or environmental challenges, and the evolution of ideas and culture helps explain why a second period of Dark Ages did not follow the turmoil of the 16th century, its mini-ice age and widespread war and disease.

I don't think Why the West Rules For Now is a substitute for more conventional cultural or political accounts of history. Rather, it has a different focal length. I highly commend it.

Oh, and the '….For Now' part? Morris predicts that current long term trends indicate the East will overtake the West once again in its level of social development in 2103 or thereabouts. The 22nd century will be the Chinese century. He's careful not to claim this is inevitable. He notes the global challenges which could add up to a serious threat to everybody's level of social development, not least climate change – the world faces another 'hard ceiling' of the kind which led to the collapse of the Dark Ages. The book concludes: “The next 40 years will be the most important in history.” In the face of an account of 15,000 years or so of history, that's pretty sobering.

The cover image of the new UK edition of The Road From Ruin: A New Capitalism for a Big Society features landmarks of the City of London skyline such as the Lloyds Building and the Gherkin. My assumption is that they symbolise the ruin rather than the hope for a better capitalism, but at a fascinating discussion of the book I attended last night with the authors – Matthew Bishop of The Economist and Michael Green – it was hard to move on from the question of the banks and bankers.

Have they shown enough contrition about their role in the crisis? Could we not move on from obsession with bonuses (this from the bankers present)? Were bankers, in their co-ordinated claims at Davos that things are back to normal, in denial of reality? Why was popular hatred of the bankers more acute in the UK than elsewhere? Apart from the fact that the damage done by bail-outs to the UK's public finances is worse than any other large OECD economy, and apart from the fact that in Northern Rock we had the first and only classic bank run of modern times, and apart from the extreme disparity between bankers' bonuses and average pay in the UK (second only to the US), who could say?

Setting aside the sarcasm, the answer is to be found in the subtitle of the book – the reason for the heightened political salience on this side of the Atlantic lies, it seems to me, in the fact that we have a government which is more or less explicitly reshaping the role of the state in society. At this stage, what voters see are cuts to public services and higher taxes, which makes the continuing subsidy to banks and the outrageous bonuses so toxic – all the more so when leading bankers with catastrophic timing try to persuade the public that it's time to move on. I rather think the bankers will find themselves unable to move on from the debate about their culpability for a while yet.

However, there is much more to this book than diagnosis of the crisis and the banking system. The authors argue for an updated popular capitalism, with stronger connections between individuals and business in general. They argue ardently that institutional investors need to rethink their role and aim for a longer-term perspective. This is partly a matter of principles and values, and partly a matter of changing seemingly dull technicalities such as the nature of their fiduciary duties. I'm sure this is correct, and indeed the short-termism of investment in the UK has been part of the diagnosis of our flawed version of capitalism since at least Will Hutton's 1995 The State We're In, or possibly the 1980 Wilson Committee report into financial institutions and 1931 Macmillan Report.

Developing a long-term perspective is the key challenge of our times – it's what my forthcoming The Economics of Enough is also about, albeit from a different angle. I argue that having a sufficiently long time horizon in taking decisions is the only way of bringing about sustainability in its broadest sense. So of course I wholeheartedly agree with this theme in The Road From Ruin. The discussion about the book centred on two themes: the need for business and political leaders to take personal responsibility for reinvigorating the sense of (moral) value in what they do; and the importance of transparency as both a lever or process for reform and as a source of legitimacy, so badly needed given the low levels of trust in key social and economic institutions. Anyway, read this timely and clear book for the authors' more detailed agenda. I should add that there is a prior US edition for American readers. It was reviewed in the FT, Strategy & Business and elsewhere earlier this year.

A column on vox by Matthew Luzzetti and Lee Ohanian celebrates the 75th anniversary of the publication of The General Theory of Employment, Interest and Money. They argue that the reason it proved such an influential book was in large part because it was published in the right place at the right time, for three main reasons:

“Macroeconomic time series from the 1940s through the 1960s conformed
qualitatively to patterns predicted by the General Theory
(even though the driving forces behind the US economy at this time may
have been very different than the forces stressed by the Keynesian
model);

Simultaneous equation econometric developments made around this time
elevated the Keynesian model to a quantitative enterprise;

And perhaps most important, the General Theory was
published during the Great Depression when there was enormous demand for
new ideas to understand chronic depression.”

I remember, the one time I tried to read it cover to cover, struggling to make sense of the book. Although it's written in beautifully clear English, I could only speak the language of the neoclassical synthesis of the 1970s, and the concepts were alien. Looking back at it now – although not re-reading it cover to cover – the striking thing is how much of its time the book is. The international trade sector and global capital markets are absent. So although the vox column concludes, rightly, that the concept of aggregate demand management will always be with us now, at least in times of recession, I'm sceptical about the modern relevance of The General Theory.

However, as economists need to become much better educated about the intellectual history of their own discipline, that's no excuse for not reading it if you haven't already.

The news of Daniel Bell's death this past week sent me back to his books, two of which – The Coming of Post-Industrial Society and The Cultural Contradictions of Capitalism – I re-read recently for my own forthcoming book, The Economics of Enough.

Previously on this blog I've noted the prescience of Bell's argument, in Post-Industrial Society, that the main political faultline of modern times would be the tensions between the technocratic management of a complex economy and the ever-growing pressures for populist democracy.

In The Economics of Enough, it's the Cultural Contradictions that plays a larger role. Bell, usually thought of as a right-wing commentator, writes in a 1978 foreword:

“….I am a socialist in economics. For me, socialism is not statism, or the collective ownership of the means of production. It is a judgment on the priorities of economic policy. It is for this reason that in this realm the community takes precedence over the individual in the values that legitimate economic policy.”

He goes on to argue for a minimum income, adequate health care and security of employment. As the Guardian's obituary put it: “He is best remembered as the author of The End of Ideology (1960), and
as one of the last of the New York intellectuals who travelled the
distance from the leftism of the 1930s to the neoconservatism of the
1970s-80s and the uncertain middle ground beyond.”

The thread I pulled out of the book this time concerns the tensions between three different sets of values or priorities in capitalism: individualism and self-realisation; equality or fairness; and efficiency and growth. There are trade-offs and in fact only two of the three can be policy targets at any one time. Bell suggests the focus in modern economies on growth and individualism means a sacrifice on the equality front, a lack which was formerly addressed by the Protestant work ethic. Without an external moral imperative containing behaviour, he suggests, the growing inequality in society would at some stage become intolerable. Again, how prescient that looks now. This 'trilemma' is a source of constant dynamics in a capitalist economy.

For more about how I link this to our current situation and policy prescriptions, you'll have to read the Overview and Chapter 7 of my book – it can now be pre-ordered from Amazon UK or other retailers!

Back to Bell – there's no shortage of obits. I like his self-description in this one from the Boston Globe: “I specialize in generalizations.” Excellent ones also in Slate and The New York Times.

It must be seasonal: there are lots of new books of interest just out, and lots of reviews.

The first batch on the BP oil spill in the Gulf of Mexico are out. Blowout in the Gulf by William Freudenberg and Robert Gramling (MIT Press) and In Too Deep by Stanley Reed and Alison Fitzgerald (John Wiley). There's also of course the official report from the National Commission on the BP Deepwater Horizon Spill, Deep Water: The Gulf Oil Disaster and the Future of Offshore Drilling. The latter two are reviewed by Ed Crooks in the Financial Times. He says they reach the same conclusion – that deep water drilling will be needed – via different analyses. The blurb for the Freudenberg and Gramling book says, interestingly: “They note that—both in the Gulf of Mexico and
elsewhere—we have been getting into increasingly dangerous waters over
recent decades, with some in the industry cutting corners and with most
federal regulators not even noticing. In the process, the actual owners
of the oil—American taxpayers—have come to receive a lower fraction of
the income from the oil than in almost any other nation on earth.”

The political and social implications of the internet are another prominent current theme. Anybody interested in this subject can't have failed to notice the widely-reviewed book by Evgeny Morozov, The Net Delusion: How Not to Liberate the World. The political impact of Twitter, Facebook etc have been a big subject of discussion – not least on Twitter and Facebook – during the recent events in Tunisia and Egypt. Malcolm Gladwell caused online outrage by claiming in an essay (Small Change: Why the Revolution Will Not Be Tweeted) that social networks weren't changing anything. Morozov thinks things are changing but isn't optimistic about the outcomes. I haven't yet read the book – there are tons of reviews already though, including the FT and Guardian, Charlie Beckett's excellent blog, and The Economist.

Alongside The Net Delusion there are two other sceptical to pessimistic analyses: Sherry Turkle's Alone Together: Why We Expect More from Technology and Less From Each Other, and a volume edited by John Brockman, Is The Internet Changing the Way You Think. They're covered in the same FT review. This is a burgeoning literature.

Other titles I picked up in my morning's reading were: Consumptionomics: Asia's Role in Reshaping Capitalism and Saving the Planet by Chandran Nair (why Chinese consumers shouldn't aspire to consumer goods as the economy develops) (NB publishers – that's enough 'somethingonomics' titles, thanks); The Future of Power by Joseph Nye; How To Run The World by Parag Khanna; and – completely different – Edgelands: Journeys Into England's True Wilderness by Paul Farley and Michael Symmons Roberts.