Best of Book Bits 2015 (Part III)

Here’s the third and final installment of The Capital Spectator’s year-end review, which recaps some of the memorable titles that have appeared in the weekly Book Bits column in 2015. For the full treatment, see Part I and Part II. Cheers!

Superforecasting: The Art and Science of Prediction
By Philip E. Tetlock and Dan Gardner
Review via Inverse
Phil Tetlock believes we can predict the future — we, us, anyone. In his new book, Superforecasting: The Art and Science of Prediction, the Wharton management professor and psychologist makes the case that futurists are skilled, not special. Normal people can make boggling accurate predictions if they just know how to go about it right and how to practice.
Tetlock backs up his crystal ball populism with data: He’s spent the better part of the last decade testing the forecasting abilities of 20,000 ordinary Americans in The Good Judgment Project on topics ranging from melting glaciers to the stability of the Eurozone, only to find that the amateur predictions were more accurate — if not more so — than those of the pundits and so-called forecasting ‘experts’ the media so often defers to.

Foolproof: Why Safety Can Be Dangerous and How Danger Makes Us Safe
By Greg Ip
Summary via publisher (Hachette/Little, Brown)
How the very things we create to protect ourselves, like money market funds or anti-lock brakes, end up being the biggest threats to our safety and wellbeing. We have learned a staggering amount about human nature and disaster — yet we keep having car crashes, floods, and financial crises. Partly this is because the success we have at making life safer enables us to take bigger risks. As our cities, transport systems, and financial markets become more interconnected and complex, so does the potential for catastrophe. How do we stay safe? Should we? What if our attempts are exposing us even more to the very risks we are avoiding? Would acceptance of danger make us more secure? Is there such a thing as foolproof? In Foolproof, Greg Ip presents a macro theory of human nature and disaster that explains how we can keep ourselves safe in our increasingly dangerous world.

Hubris: Why Economists Failed to Predict the Crisis
and How to Avoid the Next One

By Meghnad Desai
Review via Times Higher Education
Far from being finally tamed, as much of the economics profession liked to boast, boom and bust was just on hold for a while. As Desai argues, the idea of automatic equilibrium is a dangerous delusion. Disequilibrium, not equilibrium, is the natural order. “Capitalism is a dynamic system but it works through creating cycles and crises. It is a disequilibrium system.” In seeking an explanation for the post-2008 crisis, Desai turns to “long wave” theories, such as the one developed in the 1920s by the Russian economist Nikolai Kondratieff, that predict periodic turbulence rather than equilibrium. He suggests that 2008 was at the tail end of the upswing phase of a 40-year-long Kondratieff cycle that began with a downswing lasting from the early 1970s to the early 1990s.

The Little Big Number: How GDP Came to Rule the World and What to Do about It
By Dirk Philipsen
Summary via publisher (Princeton Unviersity Press)
In one lifetime, GDP, or Gross Domestic Product, has ballooned from a narrow economic tool into a global article of faith. It is our universal yardstick of progress. As The Little Big Number demonstrates, this spells trouble. While economies and cultures measure their performance by it, GDP ignores central facts such as quality, costs, or purpose. It only measures output: more cars, more accidents; more lawyers, more trials; more extraction, more pollution—all count as success. Sustainability and quality of life are overlooked. Losses don’t count. GDP promotes a form of stupid growth and ignores real development.

Failed: What the “Experts” Got Wrong about the Global Economy
By Mark Weisbrot
Summary via publisher (Oxford University Press)
Why has the Eurozone ended up with an unemployment rate more than twice that of the United States more than six years after the collapse of Lehman Brothers? Why did the vast majority of low- and middle-income countries suffer a prolonged economic slowdown in the last two decades of the 20th century? What was the role of the International Monetary Fund in these economic failures? Why was Latin America able to achieve substantial poverty reduction in the 21st century after more than two decades without any progress? Failed analyzes these questions, explaining why these important economic developments of recent years have been widely misunderstood and in some cases almost completely ignored.