The Political Economist

In my  last book review  I summarized a very interesting book called The Spirit Level by Richard Wilkinson and Kate Pickett . In it the authors propose a solution that would not only lower inequality and thus correct many of the negative social outcomes related to it (but not caused by it, mind you; they don't prove causality), but also change the entire system of values in society, so that people would be less profit-oriented and would increase their levels of interpersonal trust (among other things).  Their big idea is to introduce democratic employee ownership . Hence the title: The John Lewis economy (the John Lewis Partnership is the famous UK example of an employee-owned firm ; it allows all of its employees to share the firm's profits and have oversight over management decisions through several democratic mechanisms of corporate governance). It's a belated comment since I wanted to write a piece about this ever since 2012, when UK deputy PM Nick Clegg  o...

After the very intriguing part 1 covering two fascinating books whose contribution extends across a few scientific fields, this one lays out two books with a more contemporary historical emphasis.  Clark, Gregory (2011) A Farewell to Alms: A Brief Economic History of the World. Princeton University Press Clark’s book is first and foremost a wonderful economic history textbook. Although it carries in its title the word “brief” it represents quite a comprehensive overview of the patterns before, during and after the Industrial Revolution that can be accredited with having created the modern world. It is a good book, full of empirical data and a very detailed overview of the facts behind the patterns responsible for modern development. It is thus more a scientific work that a popular one (closer to Diamond’s Guns, Germs, and Steel, than Harari’s Sapiens). The book is separated into three parts, each important in painting the picture of why and how the Industrial Revoluti...

As announced in the previous blog post the next two book reviews will cover four very interesting history books (well, history to some extent). The first one is actually all about geography and anthropology, and little bit about history - the Pulitzer winning book by Jared Diamond: Guns, Germs, and Steel . It has long been on my reading list and I am finally happy to have read it, and I have to say - it hasn't disappointed. Far from it actually. I can see why it was an instant success. The second is a more recent book, Harari's Sapiens . Another bestseller with an overreaching arc that extends from the biological knowledge about our ancestors all the way to the modern technological revolution that has the power to destroy our very species. In short, two brilliant books! Let's begin.  Diamond, Jared (1997) Guns, Germs & Steel: The Fates of Human Societies . Norton, New York. In this Pulitzer Prize-winning book, Jared Diamond, a noted polymath (made contributions ...

In my first Separated by a border blog  (that was three years ago, but it garnered significant attention apparently) I drew institutional implications of how some countries on the same geographical area differ so much with respect to their institutional environments, living standards, income etc. Inspired by Nogales , the infamous US-Mexican example from Acemoglu and Robinson's Why Nations Fail , I drew similar cross-country comparisons between the two Koreas, the Dominican Republic and Haiti, and between Rwanda and DR Congo. The common thing with all these examples is the same geography, same culture, same (similar) history, same diseases, but different outcomes. Why? Institutions, stupid! Today we will look at the major differences within countries, starting with voting patterns. This time it's not so much the institutions that make the difference (at least not directly), but historical patterns of development.  We start with the two most famous political science exam...

Douglass C. North , one of the greatest economists of our time, a Nobel prize winner responsible for reinventing institutional economics, died this week at the age of 95. His passing follows those of other notable institutional and political economists in the past few years, such as Elinor Ostrom , James Buchanan , Ronald Coase , and his Nobel co-recipient Robert Fogel, all champions of the new approach to examining economic interactions, and all, just like North, with groundbreaking contributions to the field. Together with Olivier Williamson and Ronald Coase, he was attributed as the pivotal co-founder of the  New Institutional Economics school of thought , a school of thought I personally favor and advocate.  Out of all academics North arguably led the most exciting life. He was a navigator for the US Merchant Marines during WWII, a passionate photographer, a deep-sea fisherman, an heir to an insurance fortune, a pilot (he had his own plane), a ranch owner, fancied...