Book Bits | 28 September 2019

Narrative Economics: How Stories Go Viral and Drive Major Economic Events
By Robert J. Shiller
Review via
Sometimes investors remain upbeat in the face of no shortage of what economists would otherwise consider to be terrible news. At other times they get spooked by what otherwise appears to be a mere hiccup.
This inherent difficulty of economic forecasting is a theme that has been the focus of recent research by Yale University finance professor (and Nobel laureate) Robert Shiller. In his recently-published book “Narrative Economics: How Stories Go Viral and Drive Major Economic Events,” Shiller contends that “If enough people begin to act fearfully, their anxiety can become self-fulfilling, and a recession, sometimes a big one, may follow.”

Capitalism, Alone: The Future of the System That Rules the World
By Branko Milanovic
Interview with author via WBUR
Capitalism works, says economist Branko Milanovic, professor at the Stone Center on Socio-Economic Inequality at the Graduate Center of the City University of New York, but it comes with a price. We look at new models of capitalism that can break the cycles of greed and inequality in the US. Asked if inequality is required for capitalism to function, he reponds: “yes, indeed, it is absolutely required. But, secondly, I have to also qualify that by saying that many people, actually — when they ask that question — imagine that inequality is some kind of a binary variable. Which means either you have inequality, or you don’t have inequality. The reality, of course, is much more complex. You should think of inequality like the way that you measure, for example, temperature, or weight and so on. It’s a continuous variable. So, the question that we have to ask [is]: is inequality that we have now actually bad for growth, and bad for social stability and bad for, basically, what we call [in] economics, intergenerational equality? In other words, equality of opportunity. So, let me just say it again, I think it is bad for growth. It is bad for social stability, and it is bad for equality of chances, or equality of opportunity.”

Growth: From Microorganisms to Megacities
By Vaclav Smil
Review via Nature
In 70,000 years, Homo sapiens has grown from thousands of hunter-gatherers teetering on the brink of extinction to a global population of 7.7 billion. In Growth, Vaclav Smil explains how we have peopled the planet through our growing capacity for harvesting energy from our environment: food from plants, labour from animals and energy from fossil fuels. Civilization has developed by dominating Earth’s resources. Smil, whose research spans energy, population and environmental change, drives home the cost of growth on a finite planet. It is high: polluted land, air and water, lost wilderness and rising levels of atmospheric carbon dioxide.

The Marginal Revolutionaries: How Austrian Economists Fought the War of Ideas
By Janek Wasserman
Summary via publisher (Yale University Press)
The Austrian School of Economics—a movement that has had a vast impact on economics, politics, and society, especially among the American right—is poorly understood by supporters and detractors alike. Defining themselves in opposition to the mainstream, economists such as Ludwig von Mises, Friedrich Hayek, and Joseph Schumpeter built the School’s international reputation with their work on business cycles and monetary theory. Their focus on individualism—and deep antipathy toward socialism—ultimately won them a devoted audience among the upper echelons of business and government. In this collective biography, Janek Wasserman brings these figures to life, showing that in order to make sense of the Austrians and their continued influence, one must understand the backdrop against which their philosophy was formed—notably, the collapse of the Austro-Hungarian Empire and a half-century of war and exile.

The Narrow Corridor: States, Societies, and the Fate of Liberty
By Daron Acemoglu and James A. Robinson
Summary via publisher (Penguin)
From the authors of the international bestseller Why Nations Fail, a crucial new big-picture framework that answers the question of how liberty flourishes in some states but falls to authoritarianism or anarchy in others–and explains how it can continue to thrive despite new threats. In Why Nations Fail, Daron Acemoglu and James A. Robinson argued that countries rise and fall based not on culture, geography, or chance, but on the power of their institutions. In their new book, they build a new theory about liberty and how to achieve it, drawing a wealth of evidence from both current affairs and disparate threads of world history.

We Are the Weather: Saving the Planet Begins at Breakfast
By Jonathan Safran Foer
Review via The New York Times
Jonathan Safran Foer’s second book of nonfiction is an eye-opening collection of mostly short essays expressing both despair and hope over the climate crisis, especially around individual choice. It’s a wide-ranging book — there are tributes to grandparents and sons, as well as musings on suicide, family, effort, sense and much more — but it has a point, and that is to persuade us to eat fewer animal products.
Foer makes the case that, for Americans and citizens of other voracious meat-eating countries, this is the most important individual change we can make to reduce our carbon footprints. But “We Are the Weather” is best read as a collection of Foer’s thoughts about life and crisis.\

Carlos Slim: The Power, Money, and Morality of One of the World’s Richest Men
By Diego Osorno
Summary via publisher (Verso Books)
The biography of Carlos Slim, one of the richest people of all time, is not just the tale of the first man from a developing country to ever reach the top of the Forbes list of billionaires. It is the story of a character who represents the neoliberal mentality of our times, who mistrusts politicians, believes that the market is the most efficient mechanism for everything (even to combat corruption), and sees philanthropy as a social investment with businesses as the exclusive form of collective wealth.

By Daniel H. Neilson
Summary via publisher (Polity)
No economist has written more incisively and provocatively on financial crisis than Hyman Minsky. Minsky is best known for his claim that “stability is destabilizing” – that the seeds of the bust are sown in the boom. This financial instability hypothesis received renewed attention – and substantial confirmation – in the global financial crisis of 2008.