Book Bits | 16 September 2017

Windfall: How the New Energy Abundance Upends Global Politics and Strengthens America’s Power
By Meghan L. O’Sullivan
Summary via publisher (Simon & Schuster)
Windfall is the boldest profile of the world’s energy resources since Daniel Yergin’s The Quest. Harvard professor and former Washington policymaker Meghan L. O’Sullivan reveals how fears of energy scarcity have given way to the reality of energy abundance. This abundance is transforming the geo-political order and boosting American power. As a new administration focuses on raising American energy production, O’Sullivan’s Windfall describes how new energy realities have profoundly affected the world of international relations and security. New technologies led to oversupplied oil markets and an emerging natural gas glut. This did more than drive down prices. It changed the structure of markets and altered the way many countries wield power and influence.

The Infidel and the Professor: David Hume, Adam Smith, and the Friendship That Shaped Modern Thought
By Dennis C. Rasmussen
Review via Times Higher Education
The friendship between David Hume and Adam Smith – which lasted for more than two decades, from 1750 to 1776, the year of Hume’s death – is undoubtedly one of the most interesting and productive intellectual partnerships in the history of modern thought. It is somewhat surprising that it should not have received more attention from scholars.

World Without Mind: The Existential Threat of Big Tech
By Franklin Foer
Review via The Economist
A rising figure in the cohort of tech-company critics is Franklin Foer, a journalist at the Atlantic. His new book “World Without Mind” decries society’s capture by big technology companies, mainly Amazon, Facebook and Google. His criticisms are wide-ranging, but centre on the idea that they have become monopolies. Their dominance has gutted the financial health of publishers and music companies. He even charges tech firms with having bruised democracy: they serve up information based on opaque algorithms, suggesting what people should think, and so supplanting individual thought. Mr Foer compares tech’s lack of transparency to Italy, “where it’s never entirely clear how power really operates”.

The Color of Money: Black Banks and the Racial Wealth Gap
By Mehrsa Baradaran
Summary via publisher (Belknap Press/Harvard University Press)
When the Emancipation Proclamation was signed in 1863, the black community owned less than one percent of the United States’ total wealth. More than 150 years later, that number has barely budged. The Color of Money pursues the persistence of this racial wealth gap by focusing on the generators of wealth in the black community: black banks. Studying these institutions over time, Mehrsa Baradaran challenges the myth that black communities could ever accumulate wealth in a segregated economy. Instead, housing segregation, racism, and Jim Crow credit policies created an inescapable, but hard to detect, economic trap for black communities and their banks.

The Hacking of the American Mind: The Science Behind the Corporate Takeover of Our Bodies and Brains
By Robert H Lustig
Review via Kirkus Reviews
Lustig (Pediatric Endocrinology/Univ. of California, San Francisco; Fat Chance: Beating the Odds Against Sugar, Processed Food, Obesity, and Disease, 2012, etc.), the chief officer of the nonprofit EatREAL, has written widely on the obesity epidemic, particularly among younger Americans. Here, branching out into realms such as neuroscience, sociology, and even theology, he looks at the reward system whereby the brain lives and dies via serotonin, cortisol, and dopamine, chemicals that drive us to have that one piece of cake too many—or to smoke, snort cocaine, stare into our cellphones, and watch game shows. Medical specialists treat effects, he argues, whereas we should be looking into root causes: not just the chemistry of the brain, driven to seek reward and vulnerable to falling into addiction, but also the economic machine that creates vast industries devoted to choking processed foods with reward-delivering sugar and putting an opioid-supplying pharmacy on every street corner. That economic machine is massively parasitic and spectacularly successful.

Behavioral Economics for Cost-Benefit Analysis: Benefit Validity When Sovereign Consumers Seem to Make Mistakes
By David L. Weimer
Summary via publisher (Cambridge University Press)
How should policy analysts assess ‘benefit validity’ when behavioral anomalies appear relevant? David L. Weimer provides thoughtful answers through practical guidelines. Behavioral economists have identified a number of situations in which people appear not to behave according to the neoclassical assumptions underpinning welfare economics and its application to the assessment of the efficiency of proposed public policies through cost-benefit analysis. This book introduces the concept of benefit validity as a criterion for estimating benefits from observed or stated preference studies, and provides practical guidelines to help analysts accommodate behavioral findings.

A Study in Monetary Macroeconomics
By Stefan Homburg
Summary via publisher (Oxford University Press)
The financial crisis of 2007 and the following recession present a major challenge to macroeconomic theory. The same holds true for exceptionally low interest rates during the recent years and for the puzzle that super-expansive monetary policies failed to produce high inflation. Approaches that focus on steady states, rational expectations, and individuals planning over infinite horizons, are not suitable for analysing such abnormal situations. A Study in Monetary Macroeconomics refines and improves mainstream approaches to resolve these puzzles and to contribute to a better understanding of monetary and fiscal policies.