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From the financial times in london i’m frederick’s to demand the literary editor and this is news and focus where we offer insights into the stories that matter one of the big highlights of the ft year is towards the end of the year when we look back at all the books that have been published and we get our experts and critics and some of our top writers to assess
Which are the books from the various genres from economics to health from politics to interiors are the best reads of the year that’s gone by and it’s a great pleasure to welcome martin wolf with me here he’s done once again a fantastic job in sifting through all the economics books that have crossed the his table over the past twelve months but in particularly the
Last six months and he’s going to give us an assessment of the types of books that we’ve had the themes that they discuss and what he thinks are gonna be the great takeaways from them let’s first get at just an overview of all the books that you’ve had a look at in this year and particularly the last six months great themes or any books that really stand out what
Is astonishing to me is how many good books there are and taking the year as a whole it’s quite extraordinary it comes to over i think about 30 books the themes are pretty clear first and biggest i think is capitalism and democracy and their relationship is there’s a system in trouble i think we’re still very much in the aftermath of the crisis and in the slow
Growth in the rise of populism and all this is reflected very profoundly another theme not quite as common as that one is trade and trade wars and the the backlash against trade well that’s clearly a very significant one as well there’s some interesting thinking about ai i had to book on that in the previous lists by richard baldwin and now i’ve got one by roger
Boodles just here so that’s a clearly going to be a running theme as well there are sort of variants on some of these things but i think these are the ones that are clearly attracting a multiplicity of authors basically they’re asking is the system working right it’s a big question that we the ft led by you in a column that kicked off a whole new initiative by the
Ft the the new agenda that we’ve been asking ourselves so i think you feel that we’re part of a broader intellectual trend we are all responding to the same questions the system is not as working as well as we would like either politically or economically you can either ignore it and pretend nothing’s happening or respond to it and i think many writers in economics
As in politics and other subject and of course we in journalism have to respond to these questions of the books that you in the red are in the last six months which are the ones that feel you really stand out about inequality and why thomas philoponus book or the great reversal isn’t narrowly about inequality but it’s about is capitalism working and above all is
Capitalism working in the us and it is i think the most exciting economics book i’ve read because it uses evidence very very compellingly to argue that competition isn’t really working in the us and that’s quite controversial working less than in the eu which is evil which is more controversial and i think it’s incredibly impressive i think the book by size and
Zucman on how the rich avoid innovate acts is mostly avoid them is also really important because again it’s not just waving one’s hands they’ve done a lot of work and they’ve shown really quite compellingly and shockingly to me that the top 400 richest people in the u.s. paying a lower average tax rate than any other group largest group in american society old
Way down to the bottom 10% of the income distribution that’s pretty shocking and so it’s the evidence i’m very responsive to somebody who doesn’t just talk about something very generally but actually produces evidence tell us briefly then about the trade well as you say this is a topic which was often what you know more on the margins but let the perhaps of the
Debate kimberly cow singh has done a really good account of why progressive people should be in favor of trade i think this is a battle that has to be engaged politically in the u.s. because i think liberal trade is a progressive cause and she makes a very good case for it and basically arguing as i’ve tried to do in my own writings that the problems of the the
Poor and the working class the middle class not been caused by trade they’ve been caused by a lousy domestic policy particularly in the us but not only in the us but to me the most important book is paul blue stein’s he’s done the work we need on the origins of history of and current state of the us-china trade relationship and this is one aspect and at the moment
The central aspect of what is simply the the dominant geopolitical story of our lifetime i think which is the emerging rivalry in conflict between the us and china which is shaping everything and he’s done as he always does a wonderful journalistic job of telling you what happened doing analysis of how it happened and i think anyone who wants a briefing of what’s
Behind this in taking us back to cades as we should and putting him in context he’s very balanced about the what is real and what is quite wrong about the charges against china i mean if that is a very important book on a very important topic right now and as you mentioned earlier on you’ve been doing this for several years now having babies expert hopefully overviews
And telling our readers what one of the books that they need to look out for are there any new authors on the scene new economists that you think wow this is quite exciting never heard of this person or you know they’ve been a bit quiet until now where you look you think this is really interesting this is a new voice coming through well there are several books here
By people i hadn’t heard of before i mentioned kimberly cousing at reed college i think richard davies has done a fascinating book economics in extremes very much approach of a rather brilliant journalist i understand he worked for the economist at one stage and he went to see well what happens when things go really really wrong or which are really different and
He comes up with of a war yes suppose up in the middle that’s really fat cuz it’s so different mark thomas his book ninety-nine percent is a good solid right radical tome if you like it’s like the occupy movement updated but very well done has a bushies account of how inequality actually undermines growth very important point i should have stress that she had to
Think tank in washington a relatively new some very well rehearse summary of the evidence making the argument not just that note that the inverse it’s not as we used to think inequality is the price of growth but beyond a certain point inequality has many consequences which seriously undermine growth and this is something economists have began to realize and i think
It’s a very very important contribution the final new author to me completely new is this is katharina pistor which looks at the code of capital which looks at what makes capitalism and it’s sort of an obvious point but it’s done in great detail which is well what makes capitalism is all the things that are property and how their property and it’s not just objects
Physical things that sort of things people used to think of property there all sorts of completely intangible things derivative contracts ideas which have been attached to the idea of capital and she argues quite persuasively that this is we owe all this to the lawyers and that we understate and underestimate the importance of legal arguments and legal processes in
Developing the entire economic system we have today in many respects she’s quite convincing on this really strangely things we would never really agree to if ever put to us collectively is that a sensible former property we’ll probably say no some of them are really quite weird could you give us an example well one of them which is really very technical and i’m sure
Get the details wrong is actions will be amazed on with derivative contracts hmm how bankruptcy adjusts in that situation and what i discovered is that there are people who never expect who are ranked above the most senior creditors because of the way the legal structure works and the implication is that people who thought they were protected in law because they
Were the senior creditors turn out not to be and that’s really quite shocking and he’s in the very technical details of these contracts where you illuminate these things finally just on ai roger boodles book which is just that what i think you found this quite a sort of different take years had lots of you know views on the how ai is coming for us or has already
Arrived well most books on this subject care of the form it comes back to the tech hype that the world is in got undergoing a fantastic period of never before seen upheaval most jobs are going to disappear and and therefore we have to be very nervous about all this the rogers book is a nice corrective generally our experience with these transformations and there
Be many is there at least not neither then not necessarily as profound and they’re not as quick as most people imagine economists have been grappling with this idea david ricardo 200 years ago wrote about the possibility that machinery would generate permanent unemployment and well it can develop real shocks there’s no question real adjustment problems but boodles
Argument is well we should be calm down and relaxed about this and not be too upset now is that right i don’t know in that sort of lean back relaxing spirit i want out of all the books is there in is there any one or maybe two or more that you way you say this is a big book this is one that will stand the test of time people who talk about this in years to come
At that level i’ve already mentioned phillip enough and his importance but i think there are two books which challenge us in a rather interesting way which i think i found particularly enjoyable one is a book by the german american ancient historian valdez idol who wrote a wonderful book called the great leveler this book is called the escape from rome and it’s
Very sensual ii a story of the last three thousand years and his argument is what made europe the the crucible of modernity that the continent when new things happened and to which now china is responding so successfully what made it happen is that the universal empire disappeared so he puts it the best thing rome ever did for us was disappearing and that’s a very
Much i think a counterintuitive view it’s not original i mean some people have argued this orb is beautifully done the other book which i enjoyed very much when i know has been a bit controversial which i reviewed he is darrin a chomo leo and james robinson’s book the narrow corridor and it’s a much more sophisticated an up-to-date vision of what liberalism means
What is a free country as well how does it happen and instead of being where they tended to be in why nations fail you’d have the right institutions and the slade goes away their previous book and the state goes away and everything happens as long as the state imposes the rule of law they’ve now got what i think is a much more sophisticated view which is civilized
Societies are the product of a balance between the powerful state you need a powerful state but it has to be balanced by a powerful society in democratic institutions which fight against the state and force it to take account of society’s desires and if you don’t have that balance you either end up with despotism or you end up with anarchy and this is what i
Think is really important and why this is a significant development in their thinking is the it brings out the great fragility of civilization which of course we learnt in the 20s and 30s but we thought we’d fixed all that and that we now knew how to do all this a narrow corridor is the wall view is a narrow corridor is the path on which stable liberal democratic
Societies exist and function and it’s narrow and we can be pushed out of it and that i think is a book very much of and for our time so probably those are the two big books there that i think are likely to stand the test of time because they are addressing things that we’re not going to stop what they’re thinking about well on that cheery note marty thank you very
Much and thank you i should also just say thank you very much for having read all the books for for us for our readers i’m sure they’ll they will appreciate that and thanks for listening don’t forget that if you missed our latest episodes on when work gets in the way of sleep india’s economy and how medical websites share our data you can subscribe and listen on
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Transcribed from video
Martin Wolf's economics reading list | FT Podcast By Financial Times