Friday, 13 July 2012

Book reviews

Two of my book reviews got published recently. They are both on inspiring books I recommend to my readers, at least as a good summer reading. 

The most recent was on Acemoglu and Robinson's newest and most formidable book yet, "Why Nations Fail: The Origins of Power, Prosperity, and Poverty" published by the Adam Smith Institute (I mentioned some interesting findings of the book in a few previous blog posts, see here and here, or see the lecture). 

Here's an excerpt from the review to get the general idea:
"Acemoglu and Robinson formulate their central hypothesis around the fact that a strong set of economic institutions which will guide incentives towards creating wealth can only be achieved through more political freedom. Political inclusiveness and the distribution of political power within a society are the key elements that will determine the success or the failure of nations." 

"...The problem isn’t that poor nations remain poor because of outside (or inside) exploitation, economic ignorance or laziness of the population. It lies in the role of politics, and how the ruling elite will organize the country’s political and economic institutions. If political institutions are organized as extractive and concentrated in the hands of a narrow elite, then economic institutions will only serve the purpose of the ruling elites extracting the maximum wealth for themselves. If they are organized as inclusive, with power being dispersed among the many rather than concentrated among the few, then this institutional environment will create incentives of inclusive economic institutions, where innovation and creative destruction will ensure the creation of sustainable economic growth and development. Becoming a rich nation necessitates the overthrow of the ruling elites and the distribution of power and political rights evenly within a society. The government has to become accountable and responsive to its people, who can then use this security and stability to advance on the economic opportunities available to them."
I encourage you to read the whole thing 

I should note that this version is also forthcoming to be published in Financial Theory and Practice, a peer-reviewed journal published by the Institute of Public Finance in Croatia.

The earlier review was Mark Pennignton's great book "Robust Political Economy. Classical Liberalism and the Future of Public Policy":

"In the lasting battle of ideas between collectivist intervention and individual liberty, the book serves its purpose as a defence of classical liberalism. It provides a framework to challenge the currently dominant intellectual climate focused on the failure of markets in the domains of inequality, injustice and economic reasoning. The attacks against classical liberalism are often wrongly centred on the efficient market hypothesis of neo-classical economics, the informational market failure argument, the asocial conception of individualism and the problems of social injustice and an unequal distribution of income. The book shows how all these arguments fail, in principle, to explain how a coercive alternative can provide a better policy outcome. The author rightly recognizes that in an uncertain environment with limited and imperfect knowledge a centralised authority may only increase the systemic risk in a society. On the other hand individual interactions are more likely to be able to respond to organizational and collectivistic problems of coordination." 
The review was published in the June issue of Financial Theory and Practice, Vol. 36(2) pp 221-227.

4 comments:

  1. those are both great books, good job! And thanks for the links - I already knew about Acemoglu's book, but wasn't aware of Penington's book, which also sounds really interesting. I'm glad someone wrote a good defence of classical liberalism - it is well needed in today's debates

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    1. try also Fatal Conceit - now there's a defense of classical liberalism :)

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  2. *Heavy sigh* Guess I will have to add some more books to my already way too large reading list.

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    1. haha, I know what you mean! Too many great books, too little time

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