Book Bits: 21 October 2023

The Big Fail: What the Pandemic Revealed About Who America Protects and Who It Leaves Behind
Joe Nocera and Bethany McLean
Essay by co-author via Financial Times
Legislators and regulators give a great deal of lip service to the importance of small banks and small business — but in reality, their actions almost always aid the big at the expense of the small, particularly when it comes to banks. Yet without small banks, small business will struggle.
Starting with bank deregulation in the 1980s, and then the response to the global financial crisis, we’ve made big banks bigger at the expense of the small. This despite the fact the crisis was caused by the big banks, not the small ones (and the small ones didn’t need bailouts). From 2002 to 2022, the number of banks insured by the Federal Deposit Insurance Corporation declined by nearly half.

Fragile Neighborhoods: Repairing American Society, One Zip Code at a Time
Seth D. Kaplan
Review via Publishers Weekly
Kaplan (Human Rights in Thick and Thin Societies), a professor of international studies at John Hopkins University, strays outside his area of expertise—“fragile states”—in this unconvincing analysis of “social poverty” in America. Defining “fragile neighborhoods” as places of “stress, mistrust, frustration, and a sense of insecurity,” where people are anxious, depressed, and alienated from one another, Kaplan claims such conditions are the result of social poverty—a dearth of supportive social relations and local institutions—rather than economic poverty. He argues that fragile neighborhoods can be rich or poor, and that governmental support, good jobs, living wages, and wealth-creation opportunities are necessary but insufficient for eradicating social poverty.

Shocking Contrasts: Political Responses to Exogenous Supply Shocks
Ronald L. Rogowski
Summary via publisher (Cambridge U. Press)
In the fourteenth century, the Black Death killed as much as two thirds of Europe’s population; in the fifteenth, the introduction of moveable-type printing rapidly expanded Europe’s supply of human capital; between 1850 and 1914, Russia’s population almost tripled; and in World War I, the British blockade starved some 800,000 Germans. Each of these, Shocking Contrasts argues, amounted to an unanticipated shock, positive or negative, to the supply of a crucial factor of production; and elicited one of four main responses: factor substitution; factor movement to a different sector or region; technological innovation; or political action, sometimes extending to coercion at home or conquest abroad. This book examines parsimonious models of factor returns, relative costs, and technological innovation. It offers a framework for understanding the role of supply shocks in major political conflicts and argues that its implications extend far beyond these specific cases to any period of human history.

Social Democracy, Capitalism, and Competition: A Manifesto
Marcel Boyer
Summary via publisher (McGill-Queens U. Press)
Our social democracies and welfare states face economic and governance challenges that threaten their very survival. Against this backdrop, Social Democracy, Capitalism, and Competition argues that a true social democracy requires a clear definition and a refocusing of the roles of the public and private sectors. Using his novel competition-based social democracy and new competition-based capitalism models, Marcel Boyer goes back to the basics. Returning to the foundational characteristics of what social democracy and capitalism are supposed to be, he reimagines how public and social goods and services – such as education, healthcare, and transport infrastructure – can be provided in a way that aligns with citizens’ best interests. Boyer shows how recent decades have witnessed a shift away from competition and competitive processes, toward more bureaucratic control of public and social goods and services and more ironclad protection of state providers against contestation by potentially competitive organizations. This crony capitalism results in loss of purpose, organizational inefficiency, and outcomes that increasingly deviate from their original objectives of social wellbeing. Boyer maintains that productivity gains, economic growth, and prosperity for all actually require a degree of income and wealth inequality.

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