Latest Stock Market News

Best books of 2022: Economics

The Cashless Revolution: China’s Reinvention of Money and the End of America’s Domination of Finance and Technology
by Martin Chorzempa, PublicAffairs £25

Martin Chorzempa describes in some detail how China has jumped in less than a decade from a primitive cash-based system to one of seamless digital payments. The actors were a limited number of innovative companies. The outcome has been a fintech revolution. As a result, “The financial lives of people in China no longer revolve around governments and banks but around tech ecosystems”. This revolution has already transformed China and, one way or the other, it seems sure to transform the world, too.

Slouching Towards Utopia: An Economic History of the Twentieth Century
by J Bradford DeLong, Basic Books £30

“In 1870 a major shift took place for humanity. With the coming of the industrial research lab, the modern corporation, and truly cheap ocean and land transport and communication, we went from a world in which economic patterns formed a semi-stable backdrop of grinding mass poverty into one where the economy was constantly revolutionizing itself.” J Bradford DeLong, professor at the University of California, Berkeley, tells this remarkable story with verve. Alas, it is also, in his opinion, now over.

Bankruptcy, Bubbles and Bailouts: The Inside History of the Treasury since 1976
by Aeron Davis, Manchester University Press £16.99

Institutions matter. Powerful institutions matter decisively. In the UK, the Treasury is by far the most potent institution in government. Its instincts — pro-balanced budgets, pro-market, pro-free trade and pro-price stability — have shaped policy over decades, even centuries. In this fascinating book, Aeron Davis, professor of political communication at Victoria University of Wellington, builds on extensive interviews to give a picture of the institution and its power since 1976. Unfortunately, the performance of the UK economy suggests that the Treasury’s instinctive conservatism has not proved an unambiguous boon — far from it, in fact.

Risky Business: Why Insurance Markets Fail and What to Do About It
by Liran Einav, Amy Finkelstein and Ray Fisman, Yale University Press £25

Sellers of insurance want to select the customers least likely to need it. This then becomes a cat-and-mouse game between buyers and sellers. The outcomes will include adverse selection — sellers ending up with the most expensive clients — and exclusion — buyers failing to obtain insurance at an affordable price. These problems of selection reflect those of information. They have forced governments to insure many risks. The authors, professors at Stanford, MIT and Boston, do a masterful job of explaining the intractable complexities created by this socially vital activity.

Principles for Dealing with the Changing World Order: Why Nations Succeed and Fail
by Ray Dalio, Avid Reader Press £25

Ray Dalio, founder of Bridgewater, has become a fascinating writer on how he sees the future. But what is most interesting is that he analyses the future in terms of the lessons of the past over many centuries. This book draws many such lessons from detailed historical experience of relevance to where we are today. One such lesson is that there is likely to be a decline in the value of money, in response to debt overhangs.

The Capital Order: How Economists Invented Austerity and Paved the Way to Fascism
by Clara E Mattei, The University of Chicago Press £24

Those who believe in the marriage of the market economy with democracy need to read powerful critics. In this thought-provoking book, Clara E Mattei of The New School for Social Research places the origins of “austerity” in the attempt to restore the capitalist order after the first world war. More broadly, she makes the absolutely correct point that supposedly technocratic economic policy is fundamentally political: it is an expression of power, with distributional consequences. Economics is political. But, writing in the Marxist tradition, she also seems to believe in the by-now implausible proposition that there is an obviously superior alternative to democratic capitalism. If the means of production are indeed collectively owned and managed, the polity is bound to be a dictatorship and the economy is bound at best to stagnate.

The Illusion of Control: Why Financial Crises Happen, and What We Can (and Can’t) Do About It
by Jón Daníelsson, Yale University Press £25

How should regulators and practitioners think about — and manage — the risks in finance. In this thought-provoking book, Jón Daníelsson, professor of finance at the London School of Economics offers five recommendations. First, “the real danger is endogenous risk”, that is, the risks the system itself creates. Second, models of risk will always miss what matters. Third, remember the objectives of regulation. Fourth, think globally, not locally. Finally, encourage a diverse financial system, not a monoculture.

Books of the Year 2022

All this week, FT writers and critics share their favourites. Some highlights are:

Monday: Business by Andrew Hill
Tuesday: Environment by Pilita Clark
Wednesday: Economics by Martin Wolf
Thursday: Fiction by Laura Battle
Friday: Politics by Gideon Rachman
Saturday: Critics’ choice

The Rise and Fall of the Neoliberal Order: America and the World in the Free Market Era
by Gary Gerstle, Oxford University Press £21.99

This is fascinating account of the rise and fall of what has come to be called “neoliberalism”. Gary Gerstle, professor of American history at Cambridge, tells the tale of a political order that was born with Ronald Reagan and died with Donald Trump. As is too often true, his focus is too narrowly on how US interacts with itself and the world. But the US has been the most important single actor. This is an important perspective on how the world changed and then changed again.

For Profit: A History of Corporations
by William Magnuson, Basic Books £10.99

The author, a professor at Texas A&M University School of Law, has put current debates on the role and behaviour of corporations in a historical context: indeed, he starts with the Roman republic. Corporations have a lengthy and valuable history as social institutions. They can do things individuals and partnerships cannot. That is why they were created. In their current form, however, they serve the narrow interests of owners and managers, often against the wider interests of society. The book makes a useful contribution to a fundamental debate.

Mao and Markets: The Communist Roots of Chinese Enterprise
by Christopher Marquis and Kunyuan Qiao, Yale University Press £25.23

Many western observers believed that China was moving towards free market capitalism and hoped that it would become more democratic as a result. The elevation of Xi Jinping to a status enjoyed previously only by Mao Zedong has shattered both the belief and the hope. This important book shows that such beliefs and hopes were always naive. Maoist ideas remained alive not just in the communist party and the state but also in the successful businesses created during the era of “reform and opening up”.

Towards Market Economies: The IMF and the Economic Transition in Russia and Other Former Soviet Countries
by John Odling-Smee, Hamilton £18.99

The effort to turn the countries of the former Soviet Union into successful market economies was immensely important. Unfortunately, it was a failure. The British economist, John Odling-Smee, was a senior IMF official engaged in this endeavour in the 1990s. The main conclusions of this revealing book are that the attempt to achieve macroeconomic stability was largely successful, but that to create market economies was not. The explanation for that failure is all too clear: it was the politics, stupid. An independent market economy was the last thing those with political power wanted.

Megathreats: Ten Dangerous Trends that Imperil our Future, and How to Survive Them
by Nouriel Roubini, John Murray/Little, Brown £20

How bad might the future be? One can rely on Nouriel Roubini to give the most plausible answer to that question. In this case, he surpasses his own high standards of doomsaying. In Megathreats, he manages to put together “economic, financial, political, geopolitical, technological, health, and environmental megathreats hurtling toward us. Sound policies might partially or fully avert one or more of them, but collectively, calamity seems near certain.” People who like horror films will love this book.

Accidental Conflict: America, China and the Clash of False Narratives
by Stephen Roach, Yale University Press £25

Stephen Roach, a former chair of Morgan Stanley Asia and now a senior fellow at the Paul Tsai China Center of the Yale Law School, believes that China and the US both should and could have a workably co-operative relationship. Instead, they have fallen victim to mutually reinforcing false narratives of the other. Roach insists that there exists a way of trust and interdependence. Conceptually, he is right. Indeed, conflict would damage everybody, possibly catastrophically. But can it still be avoided?

Tell us what you think

What are your favourites from this list — and what books have we missed? Tell us in the comments below

The Economics of the Stock Market
by Andrew Smithers, Oxford University Press £30

Do not let the title of this book mislead you. It is not (except in passing) a book on how to make money from the stock market. It is a head-on assault on consensus economic models of how finance and the economy interact. These models, argues Andrew Smithers, are based on a priori assumptions that are inconsistent with the data and fail to include how finance really works. Effectively, he argues that consensus models are more a religion than a science. A brilliant book.

The Blue Commons: Rescuing the Economy of the Sea
by Guy Standing, Pelican £22

As human beings multiply their numbers and economic activities, they press ever harder on planetary boundaries. The most important boundaries are set by resources on which all depend: the atmosphere and the oceans. These are the ultimate commons. In this important book, Guy Standing, always an original and impassioned thinker, looks at the despoliation of the oceans by overfishing, mining, waste and rising temperatures. The crisis he outlines persuasively and in detail is the result of our short-sighted and largely uncontrolled exploitation. Standing offers radical ideas for creating new forms of common property. The proposals are ambitious and arguably unrealistic. But the issues he lays out are real and deeply concerning. We need good answers.

Global Discord: Values and Power in a Fractured World Order
by Paul Tucker, Princeton University Press £32

Paul Tucker, currently a fellow at Harvard’s Kennedy School, is a former deputy Governor of the Bank of England turned policy intellectual. In this book, a follow up to his Unelected Power (2018), he asks how to balance power and interests with morality and legitimacy in today’s increasingly divided world. He argues, perhaps optimistically, that “there is in principle space for a diverse society of civilizational states, connected by thin liberal institutions”. One hopes he is right, since the alternative could be the ruin of us all. This is an important book.

Economic Diversification in Nigeria: The Politics of Building a Post-Oil Economy
by Zainab Usman, Zed £65

Nigeria is the biggest and most important African country. But it has failed to diversify its economy, not just beyond oil, but beyond subsistence farming and informal activities. This is not because of an “oil curse”. As Zainab Usman, director of the Africa Program at the Carnegie Endowment in Washington, explains, it is the outcome of the country’s “unstable distribution of power among individual, group, and institutional actors”. Crisis management focused on stabilisation has pushed aside a sustained focus on economic transformation.

Join our online book group on Facebook at FT Books Café

Read More: Best books of 2022: Economics

You might also like