Book Bits |8 October 2016

Messy: The Power of Disorder to Transform Our Lives
By Tim Harford
Review via Publishers Weekly
Journalist Harford (The Undercover Economist) explores the counterintuitive theory that disorder is at the heart of innovation. His evidence includes the creative genius inspired by the randomness of record producer Brian Eno’s Oblique Strategies and the rich history of MIT’s hastily assembled Building 20. In the business world, Amazon’s Jeff Bezos is extolled for the risk taking that carried the company through the dot-com bust. The book also examines what goes wrong in a system that is too organized.

Prosperity for All: How to Prevent Financial Crises
By Roger E. A. Farmer
Summary via publisher (Oxford University Press)
In the aftermath of the 2008 financial crisis, economists around the world have advanced theories to explain the persistence of high unemployment and low growth rates. According to Roger E. A. Farmer, these theories can be divided into two leading schools of thought: the ideas of pre-Keynesian scholars who blame the recession on bad economic policy, and the suggestions of “New Keynesian” scholars who propose standard modifications to select assumptions of Keynes’ General Theory. But Farmer eschews both these schools of thought, arguing instead that in order to mitigate current financial crises-and prevent future ones-macroeconomic theory must become attuned to present-day conditions. Governments need to intervene in asset markets in a manner similar to the recent behavior of central banks, and principal actors in the international economy need to pursue financial stability. The primary mechanism for securing such stability would be for sovereign nations to create sovereign wealth funds backed by the present value of future tax revenues. These funds would function along the lines in which exchange-traded funds currently operate, and in time, they would become the backbone for stabilizing financial markets.

Failing in the Field: What We Can Learn When Field Research Goes Wrong
By Dean Karlan and Jacob Appel
Summary via publisher (Princeton University Press)
All across the social sciences, from development economics to political science departments, researchers are going into the field to collect data and learn about the world. While much has been gained from the successes of randomized controlled trials, stories of failed projects often do not get told. In Failing in the Field, Dean Karlan and Jacob Appel delve into the common causes of failure in field research, so that researchers might avoid similar pitfalls in future work. Drawing on the experiences of top social scientists working in developing countries, this book delves into failed projects and helps guide practitioners as they embark on their research. From experimental design and implementation to analysis and partnership agreements, Karlan and Appel show that there are important lessons to be learned from failures at every stage. They describe five common categories of failures, review six case studies in detail, and conclude with some reflections on best (and worst) practices for designing and running field projects, with an emphasis on randomized controlled trials. There is much to be gained from investigating what has previously not worked, from misunderstandings by staff to errors in data collection.

Crude Nation: How Oil Riches Ruined Venezuela
By Raúl Gallegos
Summary via publisher (Nebraska University Press)
Beneath Venezuelan soil lies an ocean of crude—the world’s largest reserves—an oil patch that shaped the nature of the global energy business. Unfortunately, a dysfunctional anti-American, leftist government controls this vast resource and has used its wealth to foster voter support, ultimately wreaking economic havoc. Crude Nation reveals the ways in which this mismanagement has led to Venezuela’s economic ruin and turned the country into a cautionary tale for the world. Raúl Gallegos, a former Caracas-based oil correspondent, paints a picture both vivid and analytical of the country’s economic decline, the government’s foolhardy economic policies, and the wrecked lives of Venezuelans.

How Bad Writing Destroyed the World: Ayn Rand and the Literary Origins of the Financial Crisis
By Adam Weiner
Summary via publisher (Bloomsbury)
Literature can be used to disseminate ideas with devastating real-life consequences. In How Bad Writing Destroyed the World, Adam Weiner spans decades and continents to reveal the surprising connections between the 2008-2009 financial crisis and a relatively unknown nineteenth-century Russian author. A congressional investigation placed the blame for the financial crisis on Alan Greenspan and his deregulatory policies-his attempts, in essence, to put Ayn Rand’s Objectivism into practice. Though developed most famously in Rand’s Atlas Shrugged, Objectivism sprouted from the Rational Egoism of Nikolai Chernyshevsky’s What Is to be Done? (1863), an enormously influential Russian novel decried by the likes of Fyodor Dostoevsky and Vladimir Nabokov for its destructive radical ethics. In tracing the origins of Greenspan’s ruinous ideology, How Bad Writing Destroyed the World combines literary and intellectual history to uncover the danger of hawking “the virtues of selfishness,” even in fiction.