Category Economics

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The Good Society by Kate Pickett review – the Spirit Level author takes stock

Is equality at the heart of our social problems? A whistle-stop tour of the greatest hits of progressive policy

If you’ve written a successful book based around one big idea, what do you make the next one about? Back in 2009, Kate Pickett’s The Spirit Level (co-authored with Richard Wilkinson) argued that inequality was the ultimate cause of almost all our social problems, from obesity and teenage pregnancy to violent crime; more equal societies, they claimed, had better outcomes across the board. While criticised – as most “big idea” books are – for overstating the case and cherrypicking evidence, they struck a chord, and some aspects of their thesis are now mainstream.

However, when it comes to the UK, there is an awkward problem, both for Pickett and for economists like me who, while not entirely convinced by The Spirit Level, would still like to see a more equal society. In the first chapter of Pickett’s new book, inequality is once again the root of all (social) evils: “if you know a country’s level of inequality, you can do a pretty good job of predicting its infant mortality rate, or prevalence of mental illness, or levels of homicide or imprisonment”. By contrast, she argues that GDP or GDP growth are very poor measures of overall welfare. Pickett then goes on to list the ways in which the UK has become a worse place to live since 2010 – higher child poverty, flattening life expectancy and child mortality, more people in prison.

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Everybody Loves Our Dollars by Oliver Bullough review – a jaw-dropping exposé of money laundering

From handbags to drug gangs to central banks – one of Britain’s finest investigative reporters reveals the surprising links in a global chain of crime

Question: why, if almost half of us now use cash only a few times a year, are high-denomination banknotes being printed in increasingly large numbers? In April 2024, the value of all the dollar bills in circulation reached an all-time high of $2.345tn, and may well be even more than that by now. The total value of dollars in the world has doubled every decade since the 1970s. Similarly, there are 1.552tn euro notes in circulation, while most other currencies – the British pound, the Japanese yen, the Swiss franc and so on – are all at something like their highest levels in history. This at a time when so many of us have pretty much stopped using cash altogether, and even the people who sell the Big Issue in our streets are equipped with card readers.

When I talk about “us”, I mean those who don’t have to worry about hiding huge cash profits from drug dealing, people-smuggling and so on. And that of course provides the answer to the question: while law-abiding citizens like you and I have to jump through hoops when we move even relatively small sums around for entirely legitimate reasons – buying a fridge or a secondhand car, say – drug dealers just shove bundles of the stuff into their coat pockets or suitcases and whisk them round the world in order to keep their business going. The number of dogs trained to sniff out cash at international airports is growing, but nothing like as fast as the rate at which big-denomination notes are being pumped out by the world’s central banks. And the ways in which money is laundered are growing in complexity and sophistication.

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The Score by C Thi Nguyen review – a brilliant warning about the gamification of everyday life

From Duolingo to GDP, how an obsession with keeping score can subtly undermine human flourishing

Two years ago, I started learning Japanese on Duolingo. At first, the daily accrual of vocabulary was fun. Every lesson earned me experience points – a little reward that measured and reinforced my progress.

But something odd happened. Over time, my focus shifted. As I climbed the weekly leaderboards, I found myself favouring lessons that offered the most points for the least effort. Things came to a head when I passed an entire holiday glued to my phone, repeating the same 30-second Kanji lesson over and over like a pigeon pecking a lever, ignoring my family and learning nothing.

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Capitalism by Sven Beckert review – an extraordinary history of the economic system that controls our lives

The Harvard professor provides a ceaseless flow of startling details in this exhaustively researched, 1000-year account

In the early 17th century, the Peruvian city of Potosí billed itself as the “treasure of the world” and “envy of kings”. Sprouting at the foot of the Cerro Rico, South America’s most populous settlement produced 60% of the world’s silver, which not only enabled Spain to wage its wars and service its debts, but also accelerated the economic development of India and China. The city’s wealthy elites could enjoy crystal from Venice and diamonds from Ceylon while one in four of its mostly indigenous miners perished. Cerro Rico became known as “the mountain that eats men”.

The story of Potosí, in what is now southern Bolivia, contains the core elements of Sven Beckert’s mammoth history of capitalism: extravagant wealth, immense suffering, complex international networks, a world transformed. The Eurocentric version of capitalism’s history holds that it grew out of democracy, free markets, Enlightenment values and the Protestant work ethic. Beckert, a Harvard history professor and author of 2015’s prize-winning Empire of Cotton, assembles a much more expansive narrative, spanning the entire globe and close to a millennium. Like its subject, the book has a “tendency to grow, flow, and permeate all areas of activity”. Fredric Jameson famously said that it was easier to imagine the end of the world than the end of capitalism. At times during these 1,100 pages, I found it easier to imagine the end of the world than the end of Capitalism.

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Has Britain become an economic colony?

The UK could’ve been a true tech leader – but it has cheerfully submitted to US dominance in a way that may cost it dear

Two and a half centuries ago, the American colonies launched a violent protest against British rule, triggered by parliament’s imposition of a monopoly on the sale of tea and the antics of a vainglorious king. Today, the tables have turned: it is Great Britain that finds itself at the mercy of major US tech firms – so huge and dominant that they constitute monopolies in their fields – as well as the whims of an erratic president. Yet, to the outside observer, Britain seems curiously at ease with this arrangement – at times even eager to subsidise its own economic dependence. Britain is hardly alone in submitting to the power of American firms, but it offers a clear case study in why nations need to develop a coordinated response to the rise of these hegemonic companies.

The current age of American tech monopoly began in the 2000s, when the UK, like many other countries, became almost entirely dependent on a small number of US platforms – Google, Facebook, Amazon and a handful of others. It was a time of optimism about the internet as a democratising force, characterised by the belief that these platforms would make everyone rich. The dream of the 1990s – naive but appealing – was that anyone with a hobby or talent could go online and make a living from it.

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