This elegant text is a reminder that a reader does not have to agree with the ideology of a work to appreciate some of its virtues. Succinct and polished, the book draws on a wide range of sources to explore the global financial crisis. Scholarly, the author references the historical contributions to theory of Karl Marx, John Stuart Mill and Hyman Minsky.
One strength of this pluralist effort is that it looks at the crisis from a variety of angles. Unlike some accounts, it fully appreciates the international impact of fluctuating commodity prices. In particular, it focuses on the outcomes of inflation in the oil and food sectors.
Another positive feature of the narrative is its modesty about making economic predictions. Dr Cable understands that possible scenarios are often more plausible than specific economic forecasts. He cites a piece of Arabic wisdom:
“those who claim to see the future are lying, even if by chance they are later proved right.”
It would not be capricious to argue that this book is less than the sum of its parts. Poorly structured, the text takes the reader on quite a wild historical journey. However, the juxtaposition of Alexander Bogdanov, Nikolai Kondratieff, William Shakespeare, Karl Marx, and Adam Smith is an imaginative challenge to the status quo. As a result, the work deserves a close read.
The specific policy prescriptions will not necessarily inspire all young activists. Further, the failure to fully appreciate that Marxism was never a homogeneous way of thinking is hugely disappointing. Nonetheless, there is a fragmentary respect for the philosophical traditions under discussion.
Fortunately, Mason contrives to set up a lively intellectual debate. This means that readers can pick their favourite insights and use them as points of departure. Sometimes the method behind the theory is too broad to persuade the individual that one is in the presence of a radical intellectual:
“There is probably even a conservative version of postcapitalism, and good luck to it.”
This updated text answers some of the criticisms made of an earlier version of the work. While an optimistic argument for a universal basic income takes centre stage, the book is based on disillusionment. It is in part driven by a desire to theorise the perceived failure of the Occupy movement. Hence it arguably underestimates the positive legacy of this activism in influencing mindsets.
The account is informed by a profound dissatisfaction with existing neoliberalism. However, it overstates the hegemony of neoliberal values in Western societies. The international financial crisis did not usher in a new world of progressive ethics, but it did trigger several state responses to market failure. Neither fiscal stimulus nor bank nationalisation are policies associated with neoliberal orthodoxy. Unemployment has also been limited by innovative monetary policies.
The effect of exaggerating the contemporary dominance of neoliberal thought is to distort the picture of the real challenges facing communities. A universal basic income might alleviate poverty, but it may not help deal with the ecological crises to come. If it was applied clumsily it could even exacerbate climate change. Nevertheless, the ambition of the thinking in the text is praiseworthy in that it has the capacity to prompt necessary debate:
“Occupations were purported to prefigure a new world; but even if that new world has yet to emerge, the movements certainly showed participants what was possible with political solidarity.”
These days, economists like Professor Simon Wren-Lewis spend a lot of time writing for audiences on the net. They provide a commentary on issues of the day, while hoping to influence political behaviour. Their expertise is used to attack unproductive austerity or misguided economic nationalism. Nevertheless, governments and individuals frequently ignore their warnings and are contemptuous of the precision of their predictions.
The interventions of Professor Simon Wren-Lewis are often ignored because of an ignorant scepticism towards experts. However, there is a deeper problem. Everyone knows that prediction is the Achilles’ heel of economics. While there is no consensus about what caused past economic events, there are many examples of respected economists making massive blunders about the future.
John Kenneth Galbraith was skilled because he could describe complex economic phenomena without patronising his readers. By looking backwards, he managed to impact on present behaviour. He could write a short book with brio and make his subject stimulating. His sense of humour enabled him to convince people of ideological points without them being fully aware of it. Hence he could explain the context of the origins of the Great Depression in a succinct, timeless and memorable manner. His aside on British economic policy is still illuminating:
“In 1925, under the aegis of the then Chancellor of the Exchequer, Mr Winston Churchill, Britain returned to the gold standard at the old or pre-World War I relationship between gold, dollars and the pound. There is no doubt that Churchill was more impressed by the grandeur of the traditional, or $4.86 pound than by the more subtle consequences of over-valuation…In 1925 began the long series of exchange crises, which like the lions in Trafalgar Square and the street walkers in Piccadilly, are now an established part of the British scene…Then, as since, gold when it escaped from Britain or Europe came to the United States. This might be discouraged if prices of goods were high and interest rates were low in this country.”
This collection of essays has been praised by the controversial historian Niall Ferguson. The text was produced in response to the global financial crisis. A range of movers and shakers contributed to the book, working from a diversity of perspectives. Nevertheless, the bulk of the thinkers who added to the project came from the right and the centre of the ideological spectrum.
The result of the ideological bias was that the essays were stronger in their description than in their analysis. It was remarkable how many economists, business leaders and politicians wanted to get back to something like business as usual after 2008. Some of them realised that the environmental threat required tackling, but many failed to appreciate just how hard it would be to cope with international economic imbalances and serious problems with economic performance. Many contributors tried to situate the crisis in historical or geographical perspective, but few were prepared to unpick the complexities of contemporary globalisation.
Globalisation is not something which is natural, even, irreversible or value-free. It is a contested discourse used by actors to advance specific agendas. States and firms can use globalisation to legitimise their actions, but democratic governance is never about simply adapting to a reality of globalisation. Neither economic nor cultural globalisation can be measured with ease as different experts will use various data sets. The preferences of economists dictate their policy prescriptions almost as much as the ‘real world’ problems faced by others.
For example, Professor Edmund Phelps endorsed supporting dynamism and inclusion through employment, while denying he was a neo-liberal. His pragmatism was hostile to Keynesian principles and it involved backing piecemeal reform. However, his intellectual reliance on F.A. Hayek made one question how sceptical he was of state intervention. The crisis had been exacerbated by inadequate state regulation of markets. His main point was to defend the status quo against ill-specified people from Europe. The winner of the Nobel Memorial Prize in Economic Sciences in 2006 wrote:
“Europeans, in vilifying all hedge funds, all private equity and all short-selling, make it much more difficult than it already was to increase dynamism in their economies- and without getting at the real sources of excessive instability.”