Recommended econ reading for the new year that are actually readable & contrary to the mainstream December 28, 2011Posted by Larry in economics.
Below are both books and articles you can find on the net. On second thought, if you couldn’t find it on the net, what would be the point of recommending it.
Let me begin with a book that is both entertaining and enlightening about the current crisis – The Global Minotaur by Yanis Varoufakis (2011). He is scathing about the Euro crisis and who to blame which is summarized nicely in his parable of the ant and the grasshopper to which he gives his own twist: “Never Bailed Out“.
Extremely readable accounts of how to look at the economic system in general are by the late Robert Eisner. They are the following:
The Misunderstood Economy: What Counts and How to Count It (1994). This trashes what has become the standard view of how the economy works.
How Real Is The Federal Deficit? by Robert Eisner (1986). This is essential reading given the bullshit that is promulgated practically every day by dim economists and the mainstream media. A sovereign country with sovereign control over its own currency which has a floating exchange rate with other currencies has no deficit problems with respect to its own debts, and that includes social security, national health costs, education, or anything else like these. While about the US, the argument applies with equal relevance to the UK. The Eurozone, with its Euro, is in a different position, as none of the countries in the EMU have their own currencies, having relinquished them to use the Euro.
The Great Deficit Scare and Other Economic Myths by Robert Eisner (1997). This is a short but sweet account of the economic mythologies that virtually completely surround us.
Now for others.
Debunking Economics by Steve Keen (2nd ed: 2011). A definitively scathing attack on the neo-classical world view that underlies much current economic policy recommendations. He shows in exquisite detail what bollocks it all is. So, when a government official or economist suggests a remedy for an economic malady, ask yourself: what are the probable assumptions behind this particular set of recommendations. Keen argues that it is likely that you will discover neo-classical assumptions hidden within the verbiage, which in his view completely invalidates the advice.
“The Big Lie” by Michael Thomas (2011) in the Daily Beast. Brilliant invective against the bankers and politicians, the latter of whom he considers the greater malefactors, by an ex-banker who admits that his daily job consisted of lying to customers.
“Slash and Burn Capitalism” by George Monbiot (2011). This is one of his blog posts that castigates Osborne et al.’s approach to the environment using the economic crisis as an excuse for a particularly despicable kind of cronyism.
If you would like to know more about what Keynes said but find his expositional style a little offputting, then do give The Economics of J. M. Keynes by Dudley Dillard (1948) a try. Or you can have a gander at the shorter Keynes: The Return of the Master by Robert Skidelsky (2010).
More historical works are these:
A beautifully written account of the events leading up to the Great Depression and the four bankers who participated in and tried in their own ways to prevent catastrophe but failed, primarily because of the actions they themselves took, is Liaquat Ahamed’s Lords of Finance: 1929, the Great Depression, and the Bankers Who Broke the World (2010).
If you think that the industrial revolution and its aftermath was a paragon of entrepreneurial competence, you might like to rethink this. A blistering account of the US railroad bonanza and its accompanying disasters is Railroaded: The Transcontinentals and the Making of Modern America by Richard White (2011). An appropriate response to this account is OMG! How could they have been so stupid? All I will say is: think of Larry Summers and what an idiot he is yet how lauded he is by many.
I would guess this is enough to go on. Should you get through this list, you will understand our present plight better than most. You can then decide for yourself whether Osborne, Geithner, et al. are either incompetent or venal. Certainly, what they are doing and saying is not in the interests of the majority.
On that note, I wish you a happier, and hopefully more prosperous, new year. Though I wouldn’t count on either.
A little addendum:
For complementary histories of financial misdeeds and the like, which complement Ahamed:
Bethany McClean & Joe Nocera, All the Devils are Here: The Hidden History of the Financial Crisis (2010);
Edward Chancellor, Devil Take the Hindmost: A History of Financial Speculation (1999).
For the best book on the Irish crisis that takes no prisoners, you can do no better than Fintan O’Toole’s Ship of Fools: How Stupidity and Corruption Sank the Celtic Tiger (2010 ed. with an added postscript).
Who not to read:
Krugman is excellent on the politics of the financial crisis but goes astray on the macroeconomics of it. For example, he thinks the standard demand-supply curves are good pedagogical tools for introducing students to how the economic system in the large works. They aren’t. And he still thinks that you can use an analogy between a household and the government to illustrate deficit spending and the like. The analogy is completely inapplicable. For these reasons, among others, I am unable to recommend Krugman unreservedly. That said, he should not be avoided.
Read nothing by the IMF. Their recommendations are inevitably disastrous for those they are supposedly helping. They have no idea what they are doing.
Avoid Olivier Blanchard. He is wedded to a kind of neo-classical view of the economic world and thereby goes astray.
Do not believe anything about the economic situation put out by either the UK or US governments. It is either deliberate misinformation or the consequence of incompetence. Geithner, for instance, is a failed regulator. And so far, a failed Treasury Secretary. A sterling record. He is either a liar or doesn’t have a clue. Take your pick. Osborne has been conspicuous by his unblemished record for getting things so wrong you woudn’t think we and he lived in the same world. And in a strong sense, we don’t. Danny Blanchflower doesn’t think Osborne knows what he is doing. Bill Mitchell thinks that it is likely that Osborne and his clique know precisely what they are doing, which is screwing us over for their own benefit. Again, take your pick.