From Adam Smith to Adam Toozeby Prospect Team / December 10, 2018 / Leave a comment
Published in Mid-winter (Jan-Feb) 2019 issue of Prospect Magazine
Since 2008 many books have tried to explain why the financial crisis happened. None has been as monumental as Adam Tooze’s Crashed (Allen Lane). Tooze, a historian at Columbia University, writes authoritatively on a wide range of subjects—from the workings of the credit default swap market to the intricacies of Italian politics and the geopolitics of Ukraine. These were not, though, the things that would eventually derail the global economy. Instead Tooze identifies the real culprits with a sharp, novel focus on bank balance sheets, and cross-border capital movements. And he notes that amid the mutual backslapping of pre-crash G7 summits and IMF meetings, nervous policy wonks were fretting about national “imbalances.”
Behind the mountain of technical detail, though, lies a simple question: who is the economy supposed to serve? In David Pilling’s The Growth Delusion (Bloomsbury), the FT writer argues that economics is “just one way of imagining our world” and that for too long politicians and economists have been under the false impression that nudging up GDP would mean more everything, for everyone, forever. As such they ignored key issues like inequality, sustainable development and human happiness.
Also shaking up economic orthodoxy is economist Mariana Mazzucato, whose <...