Tag Archives: review

Angry Man

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Angrynomics by Eric Lonergan and Mark Blyth is a rip-roaring read, and I wish I’d been in the pub with them as they discussed the state of the world and how to set it to rights. Not that I wholly agree with them, although disagreeing would obviously be half the fun. Normally I hate dialogue formats, as they’re usually constructed as a kind of semi-polite Punch and Judy show, presenting polarised views that are never intended to be reconciled. Lonergan and Blyth – it even sounds like a Victorian music hall act – agree on the basics so they riff of each other here in a more positive way.

Their basic thesis is that there are two kinds of anger abroad in the world: moral outrage (good) and tribal anger (bad), both reactions to the way the global economy has affected people since 1989.

Increased inequality is part of the story, genuine economic grievance in the rust belt and its equivalents, and another part is the cynical exploitation of tribalism or identitarianism by some politicians. So Lonergan and Blyth wear their left-of-centre hearts on their sleeves. The dialogues then describe and discuss the economic aspects of the political changes amply described in the now-extensive ‘decline of democracy’ literature – the micro, the macro/monetary, inequality (including, importantly, intergenerational), technological change – concluding with what to do now.

One huge gap evident right at the start is a passing parenthesis that the expression of anger is a largely male phenomenon. The book never picks this up; there is surely an important gender aspect to the way work has changed.

I disagree with dating the anger phenomenon to the collapse of communism in 1989, which removed a coherent (albeit flawed) ideology to oppose neoliberalism. Surely the hinge was the crisis of the 1970s, Thatcher and Reagan, and the early 1980s recession. That was the start of de-industrialisation, and the scarring of people’s economic prospects for the rest of their lives, and their children’s. These sea changes take time and there is never a single moment. As the book notes, too little has been reformed since 2008/9, but my view is that looking back with the hindsight of 2030, the combination of the Financial Crisis and the Covid depression will prove to be another hinge. (The book pre-dates the pandemic.)

As for the proposals, I think they get the role of competition all wrong, blaming excessive competition in tech and telecoms – whaaaaat??? – for the race to the bottom in employment practices. Amazon reports low profits because it reinvests so much revenue in continuing world domination, not because it has scrappy margins due to competitors snapping at its heels. I understand little about current monetary and alternative proposals, but as a diehard microeconomist find it hard to understand how administered negative prices in a market dominated by the state (ie central bank) can function well. Regulate the financial sector firmly – a big yes. The book has an interesting idea about government auctions of collective data rights – like spectrum auctions – which answers my profound objection to the proposal ‘create property rights in personal data and sell them’, namely that the value in data is collective, is due to aggregation.

Anyway, my copy has a combination of big ticks and scrawls of ‘nonsense!’ in the margins. A very satisfying read.

 

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The invention of taste

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I’ve greatly enjoyed reading Arts and Minds, a history of the Royal Society of Arts (RSA) by Anton Howes. Established in 1754, the Royal Society for the Encouragement of Arts, Manufactures and Commerce, was one of the products of the Enlightenment, the “Baconian Project’ of accumulating and testing knowledge that might one day be useful. The book tells its story from the beginning in a London coffee house to its activities today (although I must admit to finding the earlier chapters more interesting than the recent history – perhaps because as a member for some years I’m more or less aware of it.)

The idea from the start was to encourage the development of practical innovations, rather than seek ‘pure’ scientific knowledge like the Royal Society – this division also reflected a social divide, with the humbler artisans uncomfortable in the more aristocratic circles of the latter. Awarding prizes for what you might term everyday innovations, including things with social but not necessarily market value. As Howes notes, the Society’s ‘premiums’ have sometimes been unfavourably contrasted with patents as being ineffective compared to intellectual property rights: “The Society of Arts was never supposed to compete with the patent system nor even to promote inventions. It was supposed to encourage things that would not otherwise have been done.”

Over the decades, the interests of the Society changed, with the arts sometimes to the fore, and at other times industrial design or agricultural improvement. There was a patriotic flavour to this: part of the aim was to ensure Britain stayed ahead of the French, whose superior design skills were recognised early on.”Britain of course had many eminent artists and scientists- some of the best in the world – but it needed to diffuse science and design more widely throughout its population. French manufacturers of all kinds seemed to have superior taste; many of their working classes were provided with scientific training.” The Society played a key role in the 1851 Great Exhibition, showcasing the inventive triumphs of the world but particularly of Britain, but also aiming to educated the British public to have more sophisticated tastes in the items being purchased. The outcrop of Prince Albert-inspired and encouraged museums in South Kensington were by-products. The Society has long played a significant role in technical education, as well as encouraging designers through prizes and competitions.

I ended up concluding that the RSA is a very British institution in some ways – formed with strong central values and aims yet highly adaptable to changing needs, cherishing both tradition and innovation, an essential piece of the establishment jigsaw and yet often under-appreciated by “the elite”. The book is clearly a labour of love, and is packed with interesting bits of information: today’s nugget, highlighted on Twitter by the author, is that the rotation of modern sculptures on the 4th ’empty’ plinth in Trafalgar Square is due to Prue Leith, better known now as a judge on the Great British Bake-Off but previously an effective campaigner via the RSA for healthier and better eating in Britain. I’m an RSA Felloe (=member) too, so am fond of the organisation, but anybody interested in the process of invention, diffusion and changing tastes will greatly enjoy reading this.

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Globalisation past and future

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Sitting in quarantine in my office is the Piketty tome, Capital and Ideology, the book that’s so ridiculously massive it arrived with its own tote bag. I’d got far enough in to it to reach the long historical section, to which my first reaction was he didn’t need to show us all his workings in such immense detail.

Another economist who has turned to history is Jeff Sachs in his latest, The Ages of Globalisation: Geography, Technology and Institutions. Sachs has long been alert to the implications of geography for economic outcomes; in this book he adds a very long historical perspective. So long that we start in paleolithic times at 10,000 BCE. The narrative is framed in terms of seven ages: paleolithic, neolithic, equestrian (domestication of horses), classical (Rome/Han China, ocean (start of European empires), industrial and digital.

There has been a trend towards these long-perspective books in recent times: Ian Morris’s Why the West Rules (For Now), Jared Diamond’s Guns, Germs and Steel and Collapse, James Scott’s Against the Grain, the dreadful Sapiens by Yuval Noah Harari. If you have read a number of these, then much of the ground covered in Sachs’s book will seem familiar; there’s only so much that is known about paleolithic times. Its great merit – especially if you haven’t read any of the others – is that it’s concise, and sends the interested reader to other sources. It doesn’t need its own tote bag, and Sachs wears his own extensive reading lightly. He’s a very clear writer, too, and the book has some lovely (colour) charts and maps.

The pitfall of taking this synoptic approach is that a lot hangs on the narrative thread and underlying argument. Sachs’s seven ages work quite well in this regard, and do include sections on China, India, and the Islamic world. The argument in this book – a bit like Martin Sandbu’s new book, The Economics of Belonging, which I am reviewing for another publication – is that we shouldn’t be turning our back on globalisation. It can be made to work better for the many, not just the few, if we take the SDGs and international organisations seriously and reform the latter.

I’m sceptical that reforming the UN will fix anything. One of the earlier threads that gets lost in the final ‘what to do’ chapter is the way technologies shape what is feasible in terms of governance as well as shaping the form of economic globalisation that occurs. Still, it’s a good thing there are still some advocates for globalism rather than nationalism, and for the global public good. It’s a pre-pandemic book but post-publication events suggest this is the time to argue for at least some parts of the international order to be strengthened.

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Enlightened liberalism: a reckoning

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I’ve torn myself away from Twitter, horrified by the disintegration of the United States, the end point of its years of institutional racism and grotesque inequality, fuelled by Trump. George Packer’s brilliant article in The Atlantic a few weeks ago captured it: “We are Living in a Failed State.”

How did this come about? Well, The Light that Failed: A Reckoning by Ivan Krastev and Stephen Holmes seems like a pretty good diagnosis of how modern democratic liberalism has come to an end since 1989. The book starts with Eastern Europe, and moves on to Russia, China and finally the US. It uses the device of imitation: the post-Communist countries of eastern and central Europe wanted to be like the West in its idealised, peak-End of History image. They wanted to modernise, ‘normalise’, and become just like the countries of the EU. Yet the 1989 revolutions imitating liberalism have ended up in illiberal counter-revolutions, for there was a chasm between the ideal and the reality. “If we examine the gap between Western expectations and Eastern realities after Communism, we can discover an important source of the mental stress created in Central and Eastern Europe by a revolution aimed at importing ot imitating a foreign version of normailty.” I take this to allude to the importation of western economic and political institutions without consideration of local history and realities. Much has been written about the naive and ultimately counterproductive economic ‘shock therapies’ of the early 1990s.

Moving on to Russia, the authors argue that Putin’s imitation of the west has taken an aggressive, sarcastic turn – “ironic mimicry and reverse engineering of American hypocrisy.” His aim in interfering in elections and setting bots and trolls to run amok on social media is to dishearten and confuse, sow discord. “The West has started to resemble Putin’s Russia more than we are ready to acknowledge,” they write.

As for Trump, they argue that the irreversible damage he has caused to American democracy has involved deploying a populist gambit, corroding trust “not by lying but by telling truths selectively, especially half truths with which liberals are inclined to agree – globalization has only served the financial elite, US troops should not be entangled in Syria or Afghanistan, ‘the system’ is unfair. “The Trump movement fits into a global culture of grievance and victimhood,” the same culture exploited by Orban in Hungary, or indeed the authoritarian populists of western Europe such as Le Pen or Farage.

This an essential and sobering read. This is far from my expertise, but it seems to me to capture something essential about the political psychology about the past 30 years. The book ends by presenting today’s situation as a fork in the road: tragedy or hope. Is there hope for a chastened liberalism? It’s certainly worth working for it, and in a different frame of mind one can certainly see this book as a polemic that ignores countervailing forces. But today’s images and headlines, in the context of a global health emergency and economic catastrophe, make it hard to feel optimistic.

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Top down *and* bottom up

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Charles Stafford’s plea in Economic Life in the Real World: Logic, Emotion and Ethics, is for his fellow anthropologists to take more seriously the methodologies of two other disciplines, economics and psychology. I learned a lot about anthropology from this book, including how much anthropologists disdain economics (I fear we return indifference, on the whole).

Stafford’s argument, in a very interesting and readable book, is that the approaches are complementary: anthropologists focus on the most micro of details, while both economics and psychology are interested in generalisation about human behaviour. Intriguing to see these two bracketed together when psychology has – during the behavioural rvolution – been portrayed as a more realistic version of choice than that (assumed to be) assumed by economists – of course economists have always known that the rational choice version is not ‘realistic’.

He writes: “As a matter of routine, anthropologists accuse economists of being obsessed with ‘individual rational choosers’, but it is surely anthropolgists who are obsessed with detail.” There’s a bit of a paradox here: economics does apply methodological individualism on the whole, and easily overlooks social influences (though not entirely). Yet our concern is with outcomes at aggregate as well as individual levels. Economics is certainly universalist. It was interesting to see psychology being put in the same camp, as a universalist approach.

The plea is therefore for anthropologists to recognise that human psychology is at the heart of economic agency – it isn’t all about historical and cultural context. There is a nice chapter analysing the pros and cons of Robert Lucas’s approach to human capital and economic development, confrinted with the way people in a Taiwanese village think about the education of their children. The book ends too by pointing out that while anthropology resists quantification at all costs, the people whom the author had spent time with during his fieldwork considered numeracy and quantification to be important, not least for their economic lives.

There is surely an interaction between general human characteristics and cultural specificities. Both approaches are needed for a rounded understanding of society. I am particularly interested in the possibility for qualitative methods to inform causal inference, given that empirical identification of statistical relationships in complex systems of economic interactions is pretty much impossible. Identification needs to come from outside the model, rather than by torturing statistical correlations with dubious ‘instruments’.

Anyway, I enjoyed reading this book and welcome the anthropo-econo debate.

51Mcz+Z4MHL._SY344_BO1,204,203,200_I’ve also nearly finished Jeanette Winterson’s Frankisstein, which is terrific.