See which books Mercatus scholars and staff are reading this summer that look forward on important issues in economics and public policy.
John Micklethwait and Adrian Wooldridge’s The Fourth Revolution: The Global Race to Reinvent the State (Penguin, May 2014) is probably the best current manifesto on the proper roles for market and state, intelligent but also accessible to a lay reader. The biggest takeaway is the importance of the technological revolutions coming to government, or already arrived, and how countries do not have the luxury of sitting still in response. The book is also the single best statement of the thesis that government simply is not working very well these days—and that many voters recognize that insight better than many intellectuals do.
Alice Goffman’s On the Run: Fugitive Life in an American City (University of Chicago Press, May 2014) is a fascinating and disturbing portrait of the economic constraints and incentives facing Americans who are hiding from the law. It is superbly researched and extremely well written. It may well be the best social science book of the year so far. You can read my review of it here. And I didn’t even cover the very best part of the book—namely, the author’s account of her own personal experiences doing the research; read it carefully.
In the late 1930s, a learned Tibetan scholar named Gendun Chopel traveled to India and recorded his hyper-structured impressions of what was obviously a more modern and economically developed land than his own. The resulting book, Grains of Gold: Tales of a Cosmopolitan Traveler (University of Chicago Press, January 2014), published for the first time in English, reads like a source that would have inspired Jorge Luis Borges. A fantastic look at the culture that was Tibet—or, for that matter, India or Sri Lanka.
Evan Osnos’s Age of Ambition: Chasing Fortune, Truth, and Faith in the New China (Farrar, Straus and Giroux, May 2014) is one of the best books on contemporary China, maybe the best. Definitely recommended; fascinating throughout.
Before serving as President Reagan’s first CEA chairman, Murray L. Weidenbaum was Boeing’s chief economist and a professor at Washington University in St. Louis. These experiences at the highest levels of policy, business, and research, coupled with the professor’s frequent visits to Washington think tanks, inform The Competition of Ideas: The World of the Washington Think Tanks (Transaction, 2008), which offers a remarkable blend of firmly grounded research and consulting-report practicality for an important but poorly understood part of the US economy’s tax-exempt sector.
Blending economics with geo-political history, Charles W. Calomiris and Stephen H. Haber offer a simple and firmly grounded rationalization of why the financial sector repeatedly experiences bouts of instability in Fragile by Design: The Political Origins of Banking Crises and Scarce Credit (Princeton University Press, February 2014). A refreshing departure from books that blame the banking sector’s “bad guys,” this investigation offers deep insights into how “bad institutions” can evolve and, thus, a better road map for productive reform.
In Catastrophic Care: How American Health Care Killed My Father—and How We Can Fix It (Knopf, 2013), David Goldhill gives an intimate and penetrating analysis of where American health care goes awry. This calm, deliberate book is, nevertheless, filled with passion and logic that defy conventional wisdom. One small but striking example: David—a TV network CEO—looks at an entry-level millennial in his office and calculates that she will spend around 50 percent of her lifetime earnings on health care—and never realize that this is the case. The author, a self-described liberal Democrat, has written a powerful case for markets over central planning in health care.
In Priceless: Curing the Healthcare Crisis (Independent Institute, 2012), John C. Goodman, an often-strident free-market economist, gives a fine and balanced description of where conventional health care analysis falls short. This book was highly touted, even by experts who generally disagree with Goodman’s philosophy, including Peter Orszag and Uwe Reinhardt. No one on the Left has written anything equivalent to this book.
In The Creative Destruction of Medicine: How the Digital Revolution Will Create Better Health Care (Basic Books, 2012), Eric J. Topol, MD, examines the revolutionary possibilities inherent in the technology of modern medicine. He describes a coming “super-convergence” of genomics, wireless sensors, connectivity, data-mining, and social networking and contrasts it with outdated delivery systems. This book provides an excellent follow-up to an earlier classic, The Innovator’s Prescription (McGraw-Hill, 2008) by Clayton Christensen, Jerome Grossman, MD, and Jason Hwang, MD.
I recommend How China Became Capitalist (Palgrave Macmillan, 2012) by Ronald Coase and Ning Wang. China, an authoritarian state, is creating a market economy—something we in the West thought could only happen in a democracy. Given the American and EU intervention in many countries around the world in an attempt to create democracies, and the imminent failure of a number of these attempts, we need to better understand how China is doing it, because it might become the next role model. Coase, who died in September of last year, was awarded the Nobel Memorial Prize in Economic Science in 1991 for “for his discovery and clarification of the significance of transaction costs and property rights for the institutional structure and functioning of the economy.” He had wide ranging intellectual interests, as evidenced by this final book.
Over time, citizens have tasked their governments with an ever-longer list of things to do. Governments are supposed to correct market imperfections, right social wrongs, and protect the populace from threats foreign and domestic. They are asked to foster long-run economic growth, stave off recessions, and temper irrational exuberance. They are to incentivize innovation, police competition, and protect the consumer. But while government to-do lists have grown, expectations of what governments can effectively do have narrowed.
While these failures are often treated as an opportunity to score political points, emeritus profess of law at Yale Peter Schuck treats them as an opportunity to learn. In his new book, Why Government Fails So Often: And How It Can Do Better (Princeton University Press, March 2014), he approaches the problem with an empirical eye. His goal is not just to understand why governments fail but also to learn how those failures might be avoided.
In 2009, then economic advisor Larry Summers sent an email to President Obama on federal loan guarantees in green energy. Government, the advisor cautioned, is a “crappy” venture capitalist. In Uncle Sam Can’t Count: A History of Failed Government Investments, from Beaver Pelts to Green Energy (Broadside Books, April 2014), economic historians Burton and Anita Folsom trace the unfortunate history of government-venture capitalism, showing just how wise Summers’s advice was.
In The Fiscal Case against Statehood: Accounting for Statehood in New Mexico and Arizona (Lexington Books, 2012), Stephanie D. Moussalli tackles the fiscal history of New Mexico and Arizona between 1880 and 1930, the period during which these southwestern territories became states. She considers two questions: Does increased state sovereignty unleash greater spending? And does statehood improve government accounting and thus accountability to the public? The answer to both questions, she finds, is yes. Treating government accounts as potentially more revealing than written narrative, Moussalli shows how financial reports, budgets, audited reports, and tax assessments can augment and even challenge the written record as “people say one thing and do another.” Based on her pioneering analysis, one might argue that government financial records are public policy stripped of romance, laying bare the rhetoric and promises of politicians.
Breaking up the summer sunshine, Niall Ferguson’s The Great Degeneration: How Institutions Decay and Economies Die (Penguin, 2013) outlines the shadow cast on society by the cloud of regulation, debt, and lawyers.
John A. Allison, The Financial Crisis and the Free Market Cure: Why Pure Capitalism Is the World Economy’s Only Hope (McGraw-Hill, 2012) gives unbridled voice to bankers, who dare not offend their regulators, by speaking the truth about the broken regulatory system and by cheerfully championing a better way.
Megan McArdle’s The Up Side of Down: Why Failing Well Is the Key to Success (Viking, February 2014) is a useful rejoinder to the dozens of books published every year that focus just on entrepreneurial success. Milton Friedman was quick to remind those who praised the profit motive in capitalism that in a true free market, “the loss part is just as important as the profit part.” McArdle has a lot of fun showing readers how loss and failure are valuable learning experiences, not just for the economy as a whole but for individuals and entrepreneurs—and how America’s high risk tolerance is key to its dynamism.
Christopher Buckley will have you know that he does not care for the title “humorist,” but his new book of essays, But Enough about You: Essays (Simon & Schuster, May 2014) is an insightful and humorous—no, not “funny”—amalgamation of travel tales, criticism, essays, and obituaries. It’s the book I’d take to the beach this summer if I didn’t want to get sand in my copy of Human Action.
Veronique de Rugy
Peter Boettke’s Living Economics: Yesterday, Today, and Tomorrow (Independent Institute, 2012) came out two years ago, but I actually just spent time reading it entirely. If you want to see what passion for economics looks like and if you want to be inspired about the fight for freedom, this is the book for you. It is a truly uplifting book.
For those podcast listeners, I would like to recommend two episodes of Russ Robert’s EconTalk and related readings. First, Edward Lazear on Gary Becker. Listening to this podcast reminded me of watching a DVD about French chef Pascal Barbot. You watch (or, in this case, listen), and you feel that you are exposed to greatness. Whether you like the food that is being made, or agree with the economics, there is no denying that the people behind the food or the economics are simply different and are giants in their field. Second, Marc Andreessen, the co-creator of the early web browser Mosaic, on venture capital and the digital future. Very interesting, even for non-tech savvy like me, but also super uplifting.
The new graphic edition of Amity Shlaes’s The Forgotten Man: A New History of the Great Depression (Harper Perennial, 2014), illustrated by Paul Rivoche, is as enjoyable as it is original in concept, opening up this important chronicle of American history to new audiences.
Robert Bryce’s Smaller Faster Lighter Denser Cheaper: How Innovation Keeps Proving the Catastrophists Wrong (PublicAffairs, May 2014) is wonderful reminder why gloom-and-doom pessimists always get it wrong when it comes to predicting the future: they consistently underestimate the remarkable ability of individuals and institutions to bounce back from adversity, find new and better ways of doing things, and prosper through trial-and-error experimentation. His book is a breath of fresh air in a publishing world filled with apocalyptic Chicken Little narratives.
While some Internet critics decry the highly disruptive challenges associated with technological change, Clive Thompson, in Smarter Than You Think: How Technology Is Changing Our Minds for the Better (Penguin, 2013), proves it possible to find ways to mitigate those downsides without adopting the paranoid and Luddite tones that are common among the techno-apocalyptic crew. With unparalleled flare, he shows how we are collectively better informed, better educated, and more articulate than we were in the past.
What happens when the power of the Digital Revolution meets the world of molecular medicine? Magic! Peter W. Huber’s The Cure in the Code: How 20th Century Law Is Undermining 21st Century Medicine (Basic Books, 2013) beautifully documents the pending explosion of life-enhancing and life-saving innovation that we have only begun to tap by combining these two exciting fields. The question is, Will archaic regulatory paradigms and control-minded bureaucracies stand in the way of this sort of medical progress? Huber gives us a road map for avoiding such a disastrous outcome.
For information about Mercatus Center scholars or books, visit our website at www.mercatus.org/books.