In the original “Great Escape” some individuals escaped from a prisoner of war camp, but in doing so had little impact on, or even made things worse for, the people left behind. In this book Deaton argues that the Western economic and medical success is of a similar kind, and that much of the world has been left behind. The question then posed is is this inevitable? And are there solutions to the cruelty of inequality?
Although this is by no means a light read, I found the experience of reading an economic text from an economist who doesn’t necessary push that the solutions to structural problems lie in the market to be a good one. Having tackled the costs as well as value of IPR, he then moves onto the aid paradox, and how it can support regimes that would otherwise fall and for which a case should be made that they should be allowed to fall with the will of their citizens.
There are some good bubble charts in the early pages where the underlying patterns for how the health, wealth and inequality of nations are linked, and he makes all this analysis understandable to this statistician.
Since this book was written Deaton has won the Nobel Prize for Economics, which is promising for the recognition of the direction this field can go in.
This book received a good review in Mathematics Today, and I always like to read books by leading experts. In this case, Roth is a winner of the Nobel Prize for Economics for his work in market design: a leader in designing and implementing sorting algorithms for kidney donation, medical job applications and school place allocations.
He gives detail of how algorithms are developed, how they are applied and why they provide a stable solution, as well as the importance of the stability of this solution for that allocation to function well and prevent systems disintegrating and failing to serve the people within them well. Of course only systems that don’t “naturally” reach sensible stable solutions will attract the interest of a market designer.
I didn’t approach this book with an entirely open mind as to the motivations of the author though. Due to the current political drive to make everything into as free a market as possible, I am wary of economists applying market theories to parts of life where it does not intuitively apply. But Roth has the flexibility to talk about goodness of match for the purpose of his reason, not just financial value. But sometimes that viewpoint can be valuable, when we fall into the alternative universe of US healthcare…
If a hospital sends a non-directed donor, the NKR promises to end one of its chains at that hospital. That ensures that the hospital doesn’t “lose” a transplant by sharing its donor. Keep in mind that hospitals earn revenue on their transplants; they’re commercial enterprises as well as caregivers.
But oddities of US healthcare aside, this is a well-written book, giving an insight into how matching works when markets are designed. and the value of this to our institutions.
Risk, Human Nature and the Future of Forecasting
I borrowed this from the library in spite of knowing Greenspan’s strong right-wing leanings, because whatever his politics he is a respected economist. His insights into decision making at the Federal Reserve and on the boards of major US companies certainly illuminates the debate, but the book s limited greatly by his views.
He makes strong and convincing arguments for the removal of implicit government support from both large companies, including banks, and individuals. Unfortunately the human cost, or even economic cost in the case of Medicare, is not acknowledged. Instead he focuses on that as the only drag on the American, and wider developed world economy, since the middle of the twentieth centrury.
This is then combined with a stated desire to return the US to its world-leading position at the end of World War Two, which Greenspan takes for granted as its natural place. There is little introspection into why these countries have gained, aside from an examination of China. Even when looking at how the Chinese economy has succeeded, he is arguing why it is unable to reach its full potential due to political climate. There is no mention of attempts within China to change this, or that maybe the American system that has been world leader for 5-6 decades may not be the only way for an economy to succeed.
Of course, I am expecting too much from someone who’s entire life has been spent trying to maximise economic growth, and that growth itself has undoubtedly improved life for millions. Its just that he lists a few examples of when government intervention has worked well, but writes off the rest as stopping growth.
The writing quality is acceptable, but nothing fabulous. You can tell he has spent a lifetime writing formal reports, with short sections and subheadings every half-page in places. Of course anything else might end up impenetrable.
At the Hay Festival last spring, I heard Coggan talk about this book. It sounded sufficiently intriguing to add to the mental tbr list, and later on I finally ordered it from the Guardian bookshop. Months later still it eventually arrived (wasn’t a preorder so I’m unlikely to use them again).
Unfortunately Coggan is an economics journalist and it shows. There is little discussion about any motivations aside from the economic ones, both for democracy and explaining why it may currently be in peril. Whilst economics is of course a key driver, there must be other things to explore in this.
I may of course be jaded from having just read The Undercover Economist, and in need of a bit of a different topic though!
There are also a few cases of “bad statistics” lurking in this book, such as a graph that compares economic growth and trust in government between different countries, ignoring the impact that very different cultures and political climates may have on this. Change within countries over time would surely be more valid than comparing disparate countries in a snapshot.
However far it wanders from its core argument though, the need for people to vote to legitimise government remains one close to me, especially in the run up to a UK general election.
This is a very well-constructed book exploring macroeconomics and how events effect the lives of individuals. Tim Harford is very good at communicating complex economic concepts without over simplification.
I love the dialogue in Undercover Economist, which is a reasonably informal discussion throughout. This explores how the world has got into the position it has, and the difficulties in getting out of it again. Both technical and democratic difficulties are discussed. How do we cope with things which seem irrational or immoral to the majority of voters, even when they may well be the solution to the crisis we are currently trapped in.
The best way this book works is to strongly break the comparison between household economics and macroeconomics, and explain the balance between Keynsian and classic approaches to understanding the economy and how to decide which one is best for any given situation.
I also want to go back to the Science Museum to look at the MOINAC (or Phillips Machine) whilst understanding what it is designed to model and how. The physical model approach to seeking an understanding of complex problems before the advent of programmable computers is inspiring.