Ferraris for all

David Smith, the economics editor of the Sunday Times (London), has agreed to give a testimonial to my new book:

"The global financial crisis has produced a fresh outpouring of growth scepticism; the idea that we would all be better off in a world without economic growth. Daniel Ben-Ami has provided a timely and thought-provoking reminder of why we need growth and the benefits that it brings."

Labels: book

Frank Furedi’s latest review on spiked criticises David Willetts, one of Britain’s few intellectual members of parliament, for the neo-Malthusian views expressed in his new book. According to the review The Pinch: “is based on a depletionist theory of economic history. In line with the Malthusian model, The Pinch presents resources as being entirely fixed and all variables as more or less constant, except, of course, population growth. From this perspective, one generation utilises resources at the expense of the next generation.”

Labels: book, Malthus, review, spiked

Spiked has run a review by me of two books arguing that governments should be guided by research on happiness and well-being. My take on it is apparent from the headline: "It’s better to be a dissatisfied human than a satisfied pig".

Labels: book, happiness, review, spiked

My publisher tells me it will publish my book a month later than originally planned. It will be out in July rather than June.

Labels: book

Spiked has published a review by me looking at three American growth sceptic books. It is essentially an introduction to some of the key themes of my new book.

Labels: book, growth, media appearances, review, spiked

Frank Furedi argues on today’s spiked that, despite appearances, Cormac McCarthy’s The Road is not the one-sidedly bleak post-apocalpytic novel it is often assumed to be. It does make some more upbeat points about the human condition. He is more equivocal about the film version.

Meanwhile, a new series of Survivors, another post-apocalpytic tale from the BBC, starts next week.

Labels: apocalyptic, book, film, spiked

When I first came across Denialism by Michael Specter the title almost put me off. The term “denial” is often used by climate change alarmists to close down debate on the topic. But when I looked more closely at the content of the book I was pleasantly surprised. Specter, a staff writer on the New Yorker, attacks anti-scientific views such as the hostility towards vaccinations and support for organic food. He evidently even calls for a return to an Enlightenment understanding of the physical world. An extract from the book is available here.

Labels: book, food, science, technology

Apocalyptic fiction is one way that the pervasive sense of limits in contemporary society is expressed. Two prominent examples discussed in this New York Times article are 2012 (directed by Roland Emmerich) and The Road, based on the Cormac McCarthy book of the same name, which opens this coming week in America. Emmerich was also the director of The Day After Tomorrow, one of the most hysterical films ever made about climate change.

Labels: apocalyptic, book, film

Josie Appleton has written a review for the spiked review of books which examines the creation of an artificial “carbon market”. She argues it involves the redistribution of resources to more stagnant economies and the creation of a vast green bureaucracy. The article focuses on the latest book by Nicholas Stern while also discussing work by Anthony Giddens and Mike Hulme.

Labels: book, climate, environment, review, spiked

After a three week break I am getting back into blogging. Once I receive comments from my publisher I also will have to rewrite my book manuscript by the end of the month.

So far the links I have found are as follows. If you think I have missed anything particularly important while I have been away please email me.

* I was particularly said to miss this year’s Battle of Ideas festival in London. However, several sessions, including one on post-recession ideologies, are already available on audio. Others will hopefully soon follow on video. Rob Killick has also written up his speech on economic growth and its discontents.

* Worldwrite’s regular Worldbytes television magazine programme includes an item on austerity and the alleged lesions of the Second World War.

* Al Gore is in the news a lot with a new book coming out entitled Our Choice: A Plan to Solve the Climate Crisis. He is also the subject of the cover story in this week’s Newsweek while a New York Times article examines the possible conflict of interest between Gore as an investor and as an advocate for action on climate change.

* Angela Merkel, the German chancellor, made much of the battle against climate change in her address to the American congress.

* Meanwhile, the implication of this BBC article and the related radio programme is that nostalgia for East German values is a form that growth scepticism is taking in Germany. I am not sure this is correct but it is certainly worth investigating.

Labels: America, book, climate, environment, Germany, radio, television, Worldwrite

A fascinating and important piece by William Easterly of New York University on the origins of the concept of development in British colonial discourse. It cites a key book by Suke Wolton on Lord Hailey, the Colonial Office, and the Politics of Race and Empire in the Second World War (Palgrave Macmillan 2000).

Labels: book, development

Anyone who is interested in the redefinition of development should read today’s special issue of the New York Times magazine on “Why women’s rights are the cause of our time”. On a naïve reading such an initiative might appear welcome: the importance of development and women’s rights is being recognised. But a closer inspection shows that the meaning of both is being redefined in an exceedingly narrow way.

The centrepiece of the issue is a feature on “The women’s crusade” by Nicholas Kristof and Sheryl WuDunn, respectively a New New York Times op-ed columnist and a former Times writer who now works in philanthropy. Their article is based on turn on Half the Sky, their book on the global position of women which is due to be published next month. The book is endorsed by some of the biggest names in international development including Angelina Jolie, George Clooney and Melinda Gates.

Kristof and WuDunn clearly end up blaming men in the poorer countries for global poverty:

“Our interviews and perusal of the data available suggest that the poorest families in the world spend approximately 10 times as much (20 percent of their incomes on average) on a combination of alcohol, prostitution, candy, sugary drinks and lavish feasts as they do on educating their children (2 percent). If poor families spent only as much on educating their children as they do on beer and prostitutes, there would be a breakthrough in the prospects of poor countries. Girls, since they are the ones kept home from school now, would be the biggest beneficiaries.”

It is incredible that the two authors should be prepared to make such a massive generalisation, applying to billions of people, based on a “perusal of the data”. Surely, at the very least, the data should be examined in close detail.
The authors also, among other things, place enormous emphasis on microfinance as a way of tackling poverty. But the idea that development in an economic sense is desirable is marginalised.

Accompanying the main article are several other articles including an interview with Hillary Clinton. The American secretary of state says that the Obama administration is: “having as a signature issue the fact that women and girls are a core factor in our foreign policy.” She also emphasises the importance of microlending.

The overall consequence of this outlook is to:

- Minimise the importance of economic growth in relation to development. The best that is seen as realistic is to curb the worst excesses of poverty.

- Poverty essentially becomes the fault of feckless men and venal third world governments. Western intervention, including by non-governmental organisations (NGOs) and international institutions, becomes key to the solution. Microfinance also has a role.

- Women’s rights become redefined as a series of basic entitlements such as access to basic healthcare, access to minimal amounts of credit and a basic education. The broader struggle for social liberation is minimised and it is external institutions, such as NGOs which are responsible for “empowering” women rather than being a grassroots movement.

Labels: book, celebrities, development, ethics

My spiked review of Neal Lawson’s All Consuming is the featured book review on Arts & Letters Daily today.

Labels: book, media appearances, review, spiked

Spiked has published my review of All Consuming by Neal Lawson.

Labels: book, consumption, ethics, review, spiked

My publisher has finally agreed to “Ferraris for all” as my book title. I worked through about 80 alternative titles but decided to push for that one in the end as it has the enormous advantages of being distinctive and memorable. The sub-title has still to be agreed, let alone acceptance of the manuscript, but it is a step forward.

Labels: book

The following review by me appeared in the latest Fund Strategy (20 July).

Apart from its branding, Neal Lawson’s All Consuming is virtually indistinguishable from the plethora of books attacking consumerism. It also embodies a similar elitist disdain for the masses.

Anyone wanting to buy a book attacking consumerism is faced with an embarrassing range of choices. There are so many different tracts, using so many different terms, saying more or less the same thing. The differences between competing brands of soap powder are more significant.

Terms used by anti-consumerists to attack consumerism include consumer addiction, compulsive acquisition disorder, enoughism, luxury fever, oniomania, shopaholism and stiffitis. Neal Lawson, the author of All Consuming and chair of a “democratic left” pressure group, prefers turbo-consumerism.

Lawson’s arguments are as well worn as a stone-washed pair of Levi’s jeans. He goes into excruciating detail about how the plethora of consumer goods is ruining our lives. In Lawson’s view, Britain has long passed the era of scarcity.

He says we live in an era of superabundance in which greater choice only makes us miserable. We are more concerned with symbols and brands as a mark of our status than meeting our basic needs.

Similar arguments have been made, with considerably more finesse, by earlier authors. The notion of conspicuous consumption can be dated back to Thorstein Veblen’s The Theory of the Leisure Class, first published in 1899. Over half a century ago John Kenneth Galbraith wrote The Affluent Society, in which he argued America was suffering from the problems of post-scarcity. No Logo, a radical critique of brands by Naomi Klein, was published in 2000.

To the extent there is any originality in Lawson’s work it is to blame the rise of turbo-consumerism on what he calls “free market fundamentalism”. From this perspective a group of rabid free marketeers, led by Ludwig von Mises and Friedrich Hayek, led an intellectual revolution which ultimately led to an obsession with consumption. In Britain it was Margaret Thatcher, the Conservative prime minister from 1979 to 1990, who put the ideas into practice.

But free market fundamentalism is a zombie category. It exists in the minds of its users rather than in reality.


Lawson may not have noticed – he does not mention it in his book – but a New Labour government came into office in Britain in 1997. It is something he should be aware of; particularly as he was once an adviser to Gordon Brown and is still a member of the Labour Party. No doubt, despite any reservations he has, he will still campaign for Labour at the next election.

It is also hard to square the idea of free market fundamentalism with the massive role of the state in the British economy. The most striking indicator of this is that state spending in Britain is equivalent to about 45% of gross domestic product. This is a huge distance away from the minimal role of the state favoured by the likes of von Mises and Hayek.

The solutions Lawson proposes for the supposed problem of consumerism push him back into well-worn territory. They include restrictions on advertising, taxing luxury goods, rationing, promoting ethical consumption and making happiness a government priority. Like many environmentalists, Lawson looks back to the last world war for inspiration:

“During the second world war we gave up some freedoms, in particular the freedom to consume, to enjoy others deemed more important. We accepted rationing, blackouts and the evacuation of children because of a greater threat.”

As with the rest of the book, his memory of the war is highly one-sided. He could have added carpet bombing of civilian areas, extermination camps, the dropping of atomic bombs and tens of millions killed.

No doubt Lawson would recoil if confronted with information about the mass carnage of the second world war. But the physical brutality was closely related to the rationing and forced restrictions in consumption he advocates.

One word Lawson shies away from using is "austerity". In this he differs from David Cameron and Nick Clegg who openly argue that Britain needs a new age of austerity. In contrast, Lawson, like his former boss Gordon Brown, avoids using the A-word. Instead he prefers to indulge in platitudes such as “less is more”.

Ultimately, All Consuming is an elitist tract. The scorn with which it regards those who market different brands of trainers or televisions can easily be applied to the ­consumers themselves. They are presented as gullible individuals who are easily manipulated by powerful corporations. That is why restrictions on advertising are seen as necessary: to ­protect victim consumers from abusive companies.

Ironically, even the most fashion-conscious teen­ager is less obsessed with ­con­sumption than the anti­consumerists. The learned professors, journalists and political lobbyists who study in detail the choices available to the public are a sorry sight.

Of course such self-appointed experts are not opposed to all forms of consumption. Although they despise the purchase of luxury items by the masses they are happy to indulge what they see as their own refined tastes. Indeed, the notion of ethical consumption is essentially a way of ­validating the shopping of the elite while deriding the masses at the same time.

From the elite’s perspective, consumption becomes what James Heartfield, a social commentator, calls status affirmation. The purchase of what are deemed to be ethically acceptable products is seen as marking individuals out from the rabble. So anyone who likes, say, ordinary chocolate ­biscuits is sneered at as a gullible consumer while those who eat overpriced organic Duchy Originals are viewed as cultured individuals.

Under the ethical tag lurks a new form of snobbery. Only the attack on consumerism is supposedly for the benefit of society as a whole.

All Consuming is a junk book in what is a largely trashy anti-consumerist genre. It is virtually devoid of serious ­intellectual content. If it was a food it would be nowhere near good enough to be served in the likes of McDonald’s or Burger King

Labels: book, consumption, ethics, Fund Strategy, review

For the time being I will limit my comments on this evenings debate at the RSA on consumerism (see 7 July post). Once the audio feed of the event is available on the RSA website I will post a link to this site. I will also post my review of Neal Lawson’s book when it is published on Monday.

However, a few points to note:

* The books on consumerism by Professor Matthew Hilton, one of this evening’s speakers, sound worth reading. They include his Consumerism in Twentieth Century Britain (Cambridge UP 2003) and Prosperity for All (Cornell UP 2008).

• Given the contemporary obsession with advertising I should get round to watching Mad Men, Matthew Weiner's television drama about the world of advertising in 1960s New York.

• Neal Lawson has generously proposed a return event at the RSA when my book is published next year. I would certainly be up for it.

Labels: book, consumption, ethics, film, speeches, television

Neil Davenport’s review on spiked of Leslie Chang’s Factory Girls: Voices from the Heart of Modern China brings out the human side of China’s rapid economic development. Critics tend to one-sidedly condemn China’s rapid industrialisation and the huge internal migration that has accompanied it. But Davenport show it is generally seen as far preferable to the isolated tedium of rural life. He concludes:

“By portraying how Chinese people are actually living their lives, as opposed to talking about how they should be living their lives, Chang provides a clear and dynamic portrait of Chinese society and the individuals undergoing transformation. The conclusion to be drawn from Factory Girls is not that development is dangerous but that its humanising reach cannot come quickly enough for millions of Chinese people. There is nothing misanthropic or childish or apologetic in advocating that.”

Labels: book, china, development, spiked

Whatever happened to the “Labour left”? Answer: it has become just about the most conservative and growth sceptic section of society.

Neal Lawson, the chair of Compass and a former adviser to Gordon Brown, is about to have a book called All Consuming published by Penguin. Its subtitle is “how shopping got us into this mess and how we can find our way out of it”. He has also just set up a website with the same name.

Evidently Lawson is organising a debate on the book on Monday 13 July in the House of Commons. Given that two of the other speakers are Madeleine Bunting and Oliver James, who broadly share Lawson’s outlook, there is unlikely to be much disagreement between them. Lawson also says in an email “I’m hoping to get someone from the advertising industry to come and put the case for more consumption”.

If I was not rushing to finish my book I would put in a bid to put the opposite case - although I suspect they would not have me. It is much easier from their perspective to present the debate as simply for and against mass consumption rather than grappling with the benefits of popular prosperity.

Labels: book, consumption, economics, happiness

An interesting-sounding new book on some of the pervasive environmentalist myths is about to be published. Global Warming and Other Bollocks (Metro) argues, among other things, that Turkey Twizzlers are good for you and polar bears are not dying out. It is by Stanley Feldman, a professor of anaesthetics at London University, and Vincent Marks, a former professor of clinical biochemistry and dean of medicine at the University of Surrey.

I do not agree with all the arguments but it sounds worth reading. There is a sneak preview in this article in yesterday’s Daily Mail.

Labels: book, climate, consumption, environment, food

A couple of interesting articles on the American inequality debate.

Brink Lindsey, vice president of research at the Cato Institute, has written a critique of what he calls “nostalgianomics”. This is the tendency to romanticise the “golden age” of relatively low income inequality from the 1930s to the 1970s. Paul Krugman, Nobel laureate and New York Times columnist, is the arch-exponent of this view.

Krugman favours the system under the “Treaty of Detroit” (1950) in which the United Auto Workers (UAW) agreed not to strike in return for such gains as health, unemployment and pensions benefit. More generally it refers to a more conciliatory approach to relations between capital and labour.

Yet according to Lindsey the treaty was deeply flawed:

“The Treaty of Detroit was built on extensive cartelization of markets, limiting competition to favor producers over consumers. The restrictions on competition were buttressed by racial prejudice, sexual discrimination, and postwar conformism, which combined to limit the choices available to workers and potential workers alike. Those illiberal social norms were finally swept aside in the cultural tumults of the 1960s and ’70s. And then, in the 1970s and ’80s, restraints on competition were substantially reduced as well, to the applause of economists across the ideological spectrum. At least until now.”

Lindsey goes on to conclude:

“Paul Krugman may long for the return of selfdenying corporate workers who declined to seek better opportunities out of organizational loyalty, and thus kept wages artificially suppressed, but these are creatures of a bygone ethos—an ethos that also included uncritical acceptance of racist and sexist traditions and often brutish intolerance of deviations from mainstream lifestyles and sensibilities.”

Meanwhile, Benjamin Page and Lawrence Jacobs have written what sounds like an insightful book on American inequality judging by a review on Miller-McCune. Class War: What Americans Really Think About Income Inequality evidently argues that: “Americans are both philosophically conservative and operationally liberal”. It calls this belief system “conservative egalitarianism”. According to the review this outlook “admires individual self-reliance but accepts public intervention as necessary to help citizens strive for the American Dream on an ostensibly level playing field”.

Labels: America, book, consumption, inequality, review, work

More attempts to redefine the American dream in diminished terms (see post of 6 March 2009).

The traditional conception of the American dream, as put forward by James Truslow Adams in his book The Epic of America in 1931 was of: “that dream of a land in which life should be better and richer and fuller for everyone”. But the desirability of becoming richer, or the link between wealth and a full life, is increasingly being called into question.

William Greider, a veteran left wing journalist, suggests an alternative idea which is explicitly opposed to the goal of becoming richer in an article in the Nation (and in turn an extract from his new book on Come Home America (Rodale Press)): “Here is the grand vision I suggest Americans can pursue: the right of all citizens to larger lives. Not to get richer than the next guy or necessarily to accumulate more and more stuff but the right to live life more fully and engage more expansively the elemental possibilities of human existence.” In essence Greider is proposing that Americans accept austerity – although he is too coy to use the word – and a vague hope that this will somehow lead to more fulfilling lives. The idea that the end of scarcity is a necessary condition for true freedom is alien to him.

Even more explicit is Ted Kulongoski, the governor of Oregon. He was recently quoted in the New York Times as arguing: “Other than taxes … the hardest thing I find to talk with my constituents and my citizens about is about changing lifestyles.” By “changing lifestyles” it is clear he means reduced living standards.

Finally, there is the story of stuff a 20 minute environmentalist video rant which has apparent had over six million viewings. At a conservative estimate I counted at least 20 serious misconceptions in 20 minutes. My favourite was her insistence that human baby milk is incredibly toxic one minute followed by her reassurance that breastfeeding is still best straight afterwards. It is hard to understand how she can justify giving what she claims is a highly poisonous substance to babies. I am no expert in child care but it seems to me incontrovertible proof of a mentality that is, to put it politely, confused.

Labels: America, book, consumption, film, growth

The notion of corruption is one of the most widely used to call into question the drive for growth in developing countries. It is often argued that measures to promote growth are undesirable, because they could encourage corruption, or unrealistic. Corruption is also used to explain the lack of development of the poorest countries.

A review by Tim Harford, a Financial Times columnist and the author of The Undercover Economist, in the May issue of Reason shows the limitations of the notion of corruption. He discusses a chapter in Raymond Fisman and Edward Miguel’s Economic Gangsters (Princeton University Press) which examines two alternative theories of corruption. Many economists argue that corruption is a response to perverse incentives, the result of poor quality institutions in developing countries, while others see it as culturally inbred. Harford relates Fisman and Miguel’s study of parking tickets among United Nations to examine which of these theories is correct.

To me both hypotheses are limited. For a start the notion of corruption is not a precise one. A practice that might not be considered corrupt in one country – say an ally of the West or a western country itself – might be designated as corrupt in another.

It also seems to me that critics of corruption have the causation the wrong way wrong. What is often labelled corruption is frequently a symptom of underdevelopment rather than its cause. For example, in a poor country it might be easier for someone to make a living by circumventing the rules. In contrast in a rich country it is often easier to earn money by legitimate means.

Labels: book, corruption, development, economics, review

The concept of greed is central to the popular critique of capitalism. It is interesting therefore to trace how its use has evolved in recent years.

Until I read the article in this week’s Spectator by Fraser Nelson I did not realise that Gordon Brown had a book called Where There’s Greed published in 1987. Nelson quotes Brown denouncing the Conservatives and the “sinister insights of Adam Smith”. But it should be clear that what Brown really despises is the idea of progress and material advance. Indeed a key element of Smith’s philosophy was his link between these two elements.

Brown’s book was published in the same year as Oliver Stone’s Wall Street appeared in the cinema. The film is often remembered as a celebration of “greed” and the financial markets. In fact the intention of Stone’s film was clearly to satirise “greed”. Evidently Michael Douglas has just signed up to do a sequel to the movie in which he reprises the role of Gordon Gekko. It will focus on the recent turmoil in the financial markets.

Unravelling the concept of greed is becoming increasingly important to anyone who wants to defend economic growth and its link to progress.

Labels: book, consumption, film, finance, growth

It is evidently never too young to inculcate children to behave in what is deemed an environmentally correct fashion. Sesame Street has recently released a DVD called “Being green” which features Paul Rudd as “Mr Earth”. Evidently in the DVD for pre-schoolers: “Mr Earth teaches Elmo and Abby how ‘it can be easy being green’ by recycling, re-using, and conserving water and energy.”

In some respects this resembles the traditional teaching of religion to children in schools. However, as Tom Jacobs argues in an article for Miller-McCune on “getting religions to worship ecologically” environmentalism is not a human-centred perspective. Jacobs quotes Bron Taylor, author of the forthcoming Dark Green Religion (University of California Press) to the effect that:

“Taylor believes these ‘post-Darwinian religious forms’ will look a lot like the traditional religions that flourished before the Judeo-Christian traditions, such as animism (which views the natural world as enspirited) and pantheism (which considers the biosphere "part of a divine intelligence"). "All over the world, people are articulating, developing and promoting such spirtualities, sometimes without even knowing it — just by doing the work they do," he said.”

It is hard to think of anything more primitive than worshipping nature. Hardly the kind of thing we should be teaching our children.

Labels: book, consumption, environment, ethics

I was particularly sad to read of the death of John Maddox, a former editor of Nature, who in many respects had an exemplary attitude towards science and society. I recently ordered - although have not yet read - his What Remains to be Discovered (Free Press 1997) which argues there is still a huge amount of the scientific agenda still to work on. He also wrote The Doomsday Syndrome (Macmillan 1972), an early attack on environmentalism.

Labels: book, environment, science

John Gray, one of the gloomiest social thinkers around, has just had another book published on why the drive to social progress is dangerous. The human imagination, in his view, led to the worst crimes of the twentieth century. Gray’s Anatomy (Penguin), a collection of his essays over the past 30 years, takes contemporary misanthrope to its logical conclusion.

Labels: book, environment, progress

Three more substantial and high profile contributions to the vast growth sceptic canon have recently been published in Britain:

Anthony Giddens The Politics of Climate Change (Polity Press). View of an influential sociologist and government adviser.

Peter Singer’s The Life You Can Save (Picador) argues the rich should give more to the global poor. In doing so it seems to assume there is only a fixed amount of resources to go round.

Nicholas’s Stern’s Blueprint for a Safer Planet (Bodley Head) updates his argument on the economics of climate change.

It constantly amazes me how authors of such books typically present their arguments as if they are unorthodox. They are without doubt purveyors of today’s mainstream consensus.

On a more positive note Mike Hulme’s Why We Disagree about Climate Change (Cambridge University Press) looks set to be a measured contribution to the discussion.

Labels: book, climate, consumption, development, economics, environment

Spiked has published my review of Spirit Level by Richard Wilkinson and Kate Pickett. The article looks at how the idea of equality has been redefined from political to therapeutic terms.

Labels: book, health, inequality, review, spiked

Kate Pickett, one of the co-authors of Spirit Level, has emailed me to say I misrepresented some of the book’s statistical arguments in my 5 March post. I did point out that the post makes clear it is based on a limited range of sources – I have not read the book yet. However, in the interests of a fair and balanced debate, I have pasted her statistical rebuttal below. I hope to review the book properly before too long:

“First, our Index of Health and Social Problems does not contain happiness, it is based on hard, factual data from reputable sources like the World Bank, OECD, UN, etc. It contains life expectancy, infant mortality, obesity, mental illness, imprisonment, homicide, teenage births, educational scores, social mobility (correlation between father's and son's incomes over 30 years) and trust. I think the only one that is arguably a "soft" outcome is trust. This is based on official surveys of random samples of the population who say that other people can be trusted or not. But really, if someone says they don't trust other people, they probably don't. And indeed the causal impact of inequality on trust has been demonstrated by others. We show relationships with income inequality for all of the outcomes in our index separately as well as when combined, and we show the same for the 50 US states, as well as rich market economies.

“Second, although definitions of mental illness do indeed change over time, we use data from the World Health Organization's Consortium on Mental Illness, which used the same psychiatric diagnostic interviews in population samples of several different countries at the same time, so the data are certainly comparable and are not simply measures of how people are feeling.

“Third, we do not, of course, only use evidence from primate studies to help us understand how status insecurities and anxieties can affect our behaviour and biology, but they can be very useful. It would be silly to think that we do NOT have an evolved response to social status and social interactions and anxieties. I imagine while we all sat in the Moral Maze green room, our adrenaline and cortisol were running pretty high, all due to our feelings about whether or not we were going to make a good showing on the programme and how we were going come across and be judged!”

Labels: affluenza, book, happiness, health, inequality

The Spirit Level by Richard Wilkinson and Kate Pickett, published today in Britain by Allen Lane, looks set to become an influential addition to the enormous and dubious growth sceptic canon. The two authors are proving popular on the circuit for such things including appearances on the Moral Maze with me yesterday, Start the Week on BBC Radio 4, Nightwaves on Radio 3 as well as a lecture at the Royal Society of Arts today. They were also reviewed in the Economist.

The authors present the book as a technical – that is non-political – book on the facts of social inequality. Their central thesis is that what matters in the developed economies is not poverty but inequality. Better to have more equal societies, such as Sweden or Japan, than highly unequal ones, such as America or Britain.

Judging by what I have heard and read so far, it has several weaknesses. These include:

• Lumping together disparate forms of data in dubious composite “indices”. As far as I can gather these include more subjective factors (such as “happiness”) with more objective ones (such as life expectancy).

• They miss the extent to which many factors, such as mental illness, are largely socially defined. So, for example, the definition of mental illness in many western societies have been substantially widened in recent years.

• They seem to rely on primate studies for at least part of their evidence in relation to status. In its review of the book the Economist moves shamelessly from talking about poor Indian children to discussing baboons in the course of one paragraph: “Low-caste Indian children do worse on cognitive tests if they must state their identities beforehand. High-status baboons bred in captivity show elevated levels of stress hormones and become ill more often when they are moved to groups where they no longer dominate.”

In any case they draw sweeping growth sceptic conclusions which are clearly political – despite their protestations – and not justified by the data. The Economist quotes the two authors as arguing that: “We have got close to the end of what economic growth can do for us.”

Much of my work is focused on refuting such ideas. For example, I argue that the challenge of climate change and an ageing population can only be met with substantially more resources – and that means economic growth. That is leaving aside the benefits to individuals being wealthier in the West and the still enormous challenge of development in the third world.

I have also argued the meaning of the demand for equality has been fundamentally transformed with the acceptance of the idea that there is no alternative to the market. It used to be a demand for more – for realising the human potential – whereas it is now typically a demand for less. I have written about this before in a 2006 article for spiked on Polly Toynbee (who has also just had a paperback edition of her latest book on “greed” in Britain published). However, I plan to extend the thesis considerably in my book.

Labels: affluenza, book, consumption, happiness, inequality, radio

Sean Collins, writing in the latest spiked review of books, makes an important point on the conservative backlash against the 1960s counterculture in America. Many working class Americans supported the backlash in response to liberal condescension, including on the question of mass affluence. Collins quotes Rick Perlstein as arguing in Nixonland that:

“The liberal capitalism that had created this mass middle class created, in its wake, a mass culture of consumption. And the liberals whose New Deal created this mass middle class were more and more turning their attention to critiquing the degraded mass culture of cheap sensation and plastic gadgets and politicians who seemed to cater to this lowest common denominator.”

Labels: America, book, consumption, ethics, inequality, review, spiked

Steven Hayward, a fellow of the Claremont Institute in California, has written a scathing review essay on American environmentalism drawing out its pessimism, misanthrope and authoritarian character. Admittedly his aim is to identify a progressive trend in contemporary American environmentalism – likely to be a forlorn task – but that does not detract from the usefulness of his piece.

Among his astute points:

•“A trip down the environment and earth sciences aisle of any larger bookstore is usually a tour of titles that cover the narrow range from dismay to despair.”

•“unlike the eschatology of all major religions, the eco-apocalypse is utterly without hope of redemption for man or nature.”

•“The greens turn purple at the suggestion that most environmental conditions in rich nations are actually improving, and they bemoan the lack of "progress" toward the transformation of the human soul that is thought necessary for the planet's salvation.”

•”One of the most popular books of 2007 among environmentalists was The World Without Us by Alan Weisman, which projects a "thought experiment" about what would occur if human beings were suddenly removed entirely from the planet. Answer: nature would reassert herself, and ultimately remove nearly all traces of human civilization within several millennia—a mere blink of an eye in the planetary timescale. Environmentalists cheered Weisman's vivid depiction of the resilience of nature, but what thrilled them was the scenario of a humanless earth. Weisman made sure to stroke his audience's self-loathing with plenty of boilerplate about resource exhaustion and overpopulation. The book rocketed up the best-seller list, the latest in a familiar genre stretching back at least to Fairfield Osborn's Our Plundered Planet in 1948, arguably the first neo-Malthusian doomsday tract of modern environmentalism. Time magazine named The World Without Us the number one non-fiction book of 2007.”

•“McKibben and many other environmental writers affect an indifference toward, or transcendence of, politics in the ordinary sense, but ultimately cannot conceal their rejection of the liberal tradition. Here we observe the irony of modern environmentalism: the concern for the preservation of unchanged nature has grown in tandem with the steady erosion in our belief in unchanging human nature; the concern for the "rights of nature" has come to embrace a rejection of natural rights for humans. McKibben is one of many current voices (Gore is another) who like to express their environmentalism by decrying "individualism" (McKibben calls it "hyperindividualism").”

•“Al Gore employed the same "communitarian" trope in his first and most famous environmental book, Earth in the Balance (1992), where, in the course of arguing that the environment should be the "central organizing principle" of civilization, he suggested that the problem with individual liberty is that we have too much of it. This preference for soft despotism has become more concrete with the increasing panic over global warming in the past few years. Several environmental authors now argue openly that democracy itself is the obstacle and needs to be abandoned.”

Those who Hayward sees as representing a positive backlash against mainstream environmentalism include Ted Nordhaus and Michael Shellenberger, the authors of Break Through: From the Death of Environmentalism to the Politics of Possibility (Houghton Mifflin 2007).

Labels: America, book, climate, consumption, environment, ethics, review

Until I saw the documentary version of Guns, Germs and Steel yesterday I had not realised how much Jared Diamond, one of the world’s most prominent environmentalist writers, pitched his argument in terms of global inequality. Diamond first set out in 1972 to explain why people in developed societies had so much “cargo” (stuff) compared with hunger-gatherers in New Guinea. His answer started with the agricultural revolution of 11,000 years ago where those in the Middle East had an advantage thanks to their indigenous crops, barley and wheat, along with access to animals that could be domesticated. Such knowledge was then gradually passed on to Europe and Asia. Later on, in the sixteenth century, the Spanish conquistadores used their superior technology to subjugate Latin America.

Relatively little of Diamond’s documentary was spent on recent years. To the extent he talked about contemporary inequality it was presented as a legacy of the past. Essentially his views amount to a kind of geographical determinism. There was no attempt to explain the role of contemporary social factors create inequality today.

Although Diamond’s views may have some merit as an explanation of history they do not explain the present. It may well be true that indigenous crops and access to animals that could be domesticated gave those in the Middle East an advantage at the dawn of the Agricultural Revolution. But to properly explain contemporary inequality means starting with social relations today rather than the distant past.

Strangely the documentary had a relatively upbeat ending. It was implied that Africa could potentially achieve development along the lines of Malaysia or Singapore. As far as I can see there is no reference to this possibility in the book on which the documentary was based. It is also at odds with his 1987 essay on how the Agricultural Revolution was “The worst mistake in the history of the human race”. That implies the best form of equality would be if we were all still hunter-gatherers.

Labels: book, consumption, development, environment, inequality, television

After several recent posts about the trend towards austerity perhaps something for comic relief. Peter Wilby, a columnist for the New Statesman, writes in a review for the magazine published on 19 February:

“Children … have become the motors of economic growth, responsible (through what they spend and what their parents spend on them) for a market worth nearly £100bn annually, up 33 per cent in five years. Moreover, they influence an unquantifiable proportion of adult spending on, for example, cars and holidays. If parents show children insist they spur themselves to renewed effort. Companies once sold to children by marketing to parents. Now it's the other way round, with children sometimes pointing their parents to advertisements for loans or new credit cards.”

This takes to an absurd conclusion the already odd notion that consumption drives the economy. It is not clear where such commentators think consumer goods come from. Perhaps they are somehow consumed without being produced first? It also makes the common mistake of overestimating the importance of personal consumption in the economy.

Labels: book, consumption, economics, ethics, growth, review

The following review by me appeared in the latest Fund Strategy (9 February).

Energise! A Future for Energy Innovation by James Woudhuysen and Joe Kaplinsky is published by Beautiful Books, 2009.

Energise! starts from a fundamentally different premise from virtually every other book on energy or climate change. For James Woudhuysen, a professor of innovation and frequent speaker at Fund Strategy conferences, and Joe Kaplinsky, a science writer, any discussion of energy should be based on human needs:

“Our starting point … is the uniqueness of human beings. To us, humans will always want to do more than simply survive. They will always want more home comforts, better-lit streets and greater mobility. But to get all this – now and in the future – they will need more cheap energy. In energy matters, therefore, a far bigger and more urgent challenge than global warming lies in thoughtfully supplying the world’s population and organisations.”

This simple premise leads to radically different conclusions from the conventional writings on the subject. In contrast, the mainstream approach tends to start with a discussion of the threshold above which greenhouse gas emissions become difficult to handle.

For Energise! the priority is to work out how to generate vastly greater amounts of cheap energy so the world economy can develop as fast as possible. In general terms the authors favour a mixture of energy sources including biofuels, fossil fuels, nuclear energy and renewables. But in each case their emphasis is on generating as much energy as possible with the best technology available.

For example, the authors acknowledge that first generation biofuels, such as the ethanol produced from American maize, have limitations. But they argue that, with the required investment in technology, second and third generation biofuels could become an important energy source.

Perhaps the most surprising element of the book is its attitude to renewables or what the authors prefer to call “astronomicals”. For Woudhuysen and Kaplinsky the key to using such energy sources as geothermal, hydroelectric, solar and wind is to do so on a vast scale. Since such energy tends to be diffuse, it is best collected and harnessed in massive engineering projects.

This is in contrast to greens who tend to prefer energy projects that are small scale and limited. Perhaps the most striking example is hydroelectric power – where greens often favour small-scale dams but condemn large-scale ones. For Energise! : “Environmentalists don’t really see wind, solar, water and geothermal as massive sources of energy. Their ‘renewables’ rather, are meant to renew the world morally – by leading it away from industrialism and modernity” (p360).

The emphasis on the need for a huge increase in energy supply also rules out approaches based on conservation or energy efficiency. Conservation is rejected simply because the world needs more energy rather than less. Energy efficiency is fine in principle but there are physical limits to achieving it and in any case using energy more efficiently generally means using more rather than less.

Those who ­promote energy efficiency often seem unaware that substantial improvements since the 1970s have coincided with greater energy use overall.

In relation to climate change the authors reject the sceptic view by recognising it is happening and that human activity is an important cause. But they also repudiate the mainstream response of curbing emissions and promoting energy conservation with a fundamentally different approach. In broad terms this means heavy investment in developing new and improved sources of energy supply rather than curbing demand.

On runaway climate change – change that is irreversible and dangerous – the authors argue that it cannot be ruled out theoretically but it is highly unlikely. Energise! says that climate alarmists exaggerate the magnitude and significance of the uncertainty around climate sensitivity.

Woudhuysen and Kaplinsky point out that mainstream scientific opinion does not see the build-up of a given level of greenhouse gases as likely to have anywhere near as dramatic effect as many environmentalists suggest. In effect alarmists present an extreme worst-case scenario as if it is the mainstream view.

Rather than panic about climate change the authors suggest a programme of transformation to deal with the problem. In essence this means investing heavily in what they call “a gale of new-generation technologies” (p466). Measures would include new-generation nuclear energy including fusion, a new carbon infrastructure, astronomical use of clean energy, radically improved building infrastructure and increased mechanisation of agriculture.

The main barrier to achieving the goal of massive increases in energy supply is not technical – although there are technological challenges to be overcome – but social. There is a pervasive culture of caution which militates against bold, imaginative solutions to insufficient energy supply.

In addition, a widespread antipathy to consumption means that the idea of producing more energy is often a source of anxiety if not outright hostility. Indeed, Energise! regards this topic as so important that chapter two is devoted to examining the views of commentators who are hostile to, or at least haughty towards, consumption. These range from thinkers such as Thorstein Veblen, who coined the term “conspicuous consumption”, to John Maynard Keynes and John Kenneth Galbraith.

The only weaknesses of the book are minor and technical. It has no index or bibliography – although there are extensive references.

Overall, Energise! is a huge achievement. From its simple starting point of the need for a massive increase in cheap energy it builds a strong case with authority and flair. It should be read by anyone who wants to understand one of the key debates of our age.

Labels: book, consumption, energy, Fund Strategy, review

The February 2009 issue of History Today has an article by Keith Thomas, a fellow of All Souls College, Oxford, on the emergence of a consumer society in Britain from the 17th century onward. He argues:

“What we see during the 17th and 18th centuries is the gradual emergence of a new ideology, accepting the pursuit of consumer goods as a valid object of human endeavour and recognising that no limit could, or should, be put to it. Consumption was justified in terms of the opportunities it brought for human fulfilment. The growth of a consumer market, unrestricted by the requirements of social hierarchy, offered increasing possibilities for comfort, enjoyment and self-realisation. Poverty was no longer to be regarded as a holy state; and there was no need to feel guilt about envying the rich; one should try to emulate them. Or so the advocates of laissez-faire commerce would argue.”

The article is broadly in the tradition of Thorstein Veblen, the author of The Theory of the Leisure Class (1899) in seeing the accumulation of wealth as a means to demonstrate standing and gain esteem in relation to other individuals. It also discusses how upholders of the traditional Protestant ethic objected to what they saw as frivolous displays of luxury.

Thomas’s article is based on an extract of his book, The Ends of Life: Roads to Fulfilment in Early Modern England, which is published in February by Oxford University Press.

Labels: book, consumption, progress

Spiked has published an extended version of my review of Paul Krugman’s book on “depression economics”. An earlier version appeared in Fund Strategy.

Sean Collins has a review in the same issue of the spiked review of books which examines how the current financial crisis can be linked to the real economy.

Labels: Austerity Watch, book, economics, finance, Fund Strategy, review, spiked

Can there be a non-elitist environmentalism? The is the question posed, implicitly at least, by an article on Greening the ghetto in the New Yorker.

The piece is a profile of Van Jones, the founder and president of Green for All, a California-based “national organization dedicated to building an inclusive green economy strong enough to lift people out of poverty”. His project is to reduce poverty by creating millions of “green jobs” in such areas as installing solar panels, “weatherising” buildings and constructing mass transit systems. Jones’s book on the subject, The Green Collar Economy: How One Solution Can Fix Our Two Biggest Problems (HarperOne 2008), has the endorsement of the likes of former vice President Al Gore, Nancy Pelosi (the speaker of the house of representatives) and Thomas Friedman (New York Times columnist).

The article acknowledges that environmentalists normally come from an affluent minority: “A 2006 study commissioned by Earthjustice, a nonprofit environmental-law group, found that the ecological base ‹defined as Americans who report the environment as being central to their concerns) is nearly ninety percent white, mostly college-educated, higher-income, and over thirty-five.” It is implied that Jones, who is black, could represent the future of a more broad-based environmentalism.

There is a problem with this argument. Even if environmentalism caught on among the mass of the population it would remain an elite ideology in an important sense. Any project with the goal of curbing economic growth is likely to reinforce the existing order. As far as it is possible to tell from the Green for All website the campaign shares the prejudices of mainstream environmentalism in relation to curbing energy use and penalising the use of fossil fuels.

The Jones campaign could be a pragmatic way of raising funds from the federal government and other sources. Clearly his pitch is likely to appeal in today’s intellectual and political climate. But even if he genuinely believes it the campaign will not solve America’s economic problems or benefit the mass of the population.

Labels: America, book, economics, environment, inequality, work

The following comment by me appeared in the latest Fund Strategy (12 January).

There is no doubting the theme of last week's economics discussions: how can economies be boosted to offset the effects of the downturn? Such a limited outlook overlooks practical and more fundamental problems.

In Britain the focus was on the Bank of England lowering base rates to their lowest levels ever. There is also talk of "quantitative easing" - printing money - if lowering base rates does not ease the credit crunch.

In America the debate has centred on the fiscal stimulus. Barack Obama has proposed a $775 billion (£530 billion) package of which $300 billion will be in tax cuts. Meanwhile, the Congressional Budget Office (CBO) has forecast that the fiscal deficit will hit $1.2 trillion, or 8.3% of GDP, this year.

Yet just as America needs to borrow more it is likely to find it harder to raise funds. China will be increasingly reluctant to fund American consumption as it needs resources for its own fiscal expansion.

Much of the discussion of stimulus packages, both fiscal and monetary, is open to such practical objections. Another is that the economic boost could stoke inflation.

Although such objections are important they do not get to the nub of the problem. They are based, implicitly if not explicitly, on an underconsumptionist model of the downturn. In other words they assume the problem is that the economy is facing insufficient demand. Paul Krugman, whose latest book is reviewed in this issue, is a leading exponent of this outlook.

Unfortunately, such a model cannot be taken as given. Those who assume that the problem is lack of demand will propose an economic stimulus as a solution. But such a premise has to be proved rather than assumed.

There is good reason to suggest the economic downturn has more fundamental causes that the underconsumptionists suggest. Developed economies have experienced relatively sluggish growth since the early 1970s. Indeed the enormous expansion of credit was largely an attempt to offset this tendency.

In more recent times the trend towards "green capitalism" has compounded the problem of slow growth. Economic growth is increasingly stigmatised as leading to environmental disaster and misery.

If the underconsumptionists are wrong in their diagnosis of the economic woes their solutions are also likely to be flawed.

Labels: America, book, economics, Fund Strategy

The following book review by me appeared in the latest Fund Strategy (12 January).

Paul Krugman is probably the most influential economist in the world today. Not only did he win the 2008 Nobel prize for economics but he also has a column in the New York Times. He used the latter as a platform to attack what he saw as the crude free market economics of the Bush administration.

The Return of Depression Economics is likely to enhance his reputation further. It is an updated version of a book first published in 1999 which seemed to anticipate many of the main trends that surfaced in the economic crisis of 2008. Indeed Krugman argues that many of the themes of "depression economics" were already clear in financial crises in Latin America in the mid-1990s, in Japan in the 1990s and in the Asian financial crisis of 1997-8:

"The world economy is not in depression, despite the magnitude of the current crisis … But while depression itself has not returned, depression economics, the kinds of problems that characterized much of the world economy but have not been seen since - has staged a stunning comeback" (p181).

For Krugman the fundamental problem is what he calls a "liquidity trap" or what others have referred to as underconsumption. For him the bursting of the financial bubble has left individuals in a state of anxiety about consuming. They would rather hold on to their money than engage in what they see as excessive spending. As a result, Krugman argues, the world is suffering from a lack of demand: "for the first time in two generations, failures on the demand side of the economy - insufficient private spending to make use of the available productive capacity - have become the clear and present limitation on prosperity for a large part of the world" (p182). His solution is for Keynesian measures, such as spending on infrastructure, to bolster demand and get the economy moving again.

There are fundamental problems with Krugman's argument but to understand them it is necessary to understand how he reaches his conclusions. It is not enough to simply reject his policy suggestions. Before that his underlying assumptions must be interrogated.

Krugman uses a simple model to explain his argument. He points to the example of a Washington babysitting co-op to explain what he means by a liquidity trap. The co-op issued its members with coupons, which each represented an hour of babysitting time. The idea was that over time every member of the co-op would do an equal amount of babysitting as they cashed in their coupons.

Unfortunately the coupon system did not work as planned. Some couples who were worried about not having enough coupons were anxious about going out and keen to babysit. As a result they started hoarding their coupons. Such hoarding made couples even more nervous about going out. Eventually there were not enough coupons in circulation for the co-op to operate. In effect the co-op was in recession. For Krugman this provides a simplified version of the economic crisis.

It is important to recognise that there is not a problem with such model-building in principle. Economists do it all the time for good reason. It means isolating the most important factors in the operation of an economy rather than focusing on relatively peripheral questions. For example, an initial model of an economy might assume that it is closed - that is, it is not involved in international trade and investment - so that the main domestic trends can be identified. Later on more complex factors can be added to the model to account for more subtle variations of the argument.

The problem with Krugman's approach is not model building itself but the ahistorical character of his assumptions. It does not grapple with the specific features of the contemporary economy that mark it out from previous times. Indeed it can be argued that there is a circularity to Krugman's argument. His conclusion - that a Keynesian fiscal boost is the solution - is built into his underconsumptionist model of the economic crisis.

In contrast a working model of the economy would need to be based on a critical examination of its defining characteristics. In Cowardly Capitalism (Wiley 2001) I argued that there were two key features underlying the workings of the contemporary economy.

First, the productive economy of the West has become atrophied. The dynamic to growth of the productive side of the economy has become weak. This weakness was partially hidden by the artificial boost to consumption from the extension of credit in recent years. The relative dynamism of Asia, which subsidised consumption in the West with many billions of dollars of capital flows, also disguised the extent of Western stagnation. Indeed the financial bubble can itself be understood as the result of an attempt to offset the tendencies to atrophy in the Western economies. Such measures worked for a while but their limits were reached back in 2008.

Second, the pervasive culture of risk aversion in contemporary society gives shape to the financial markets. Financial markets have become more about transferring risks than channelling capital. Instruments such as mortgage backed securities and credit derivatives are primarily mechanisms to allow those involved to transfer risk. Yet, paradoxically, they have provided the mechanism for "contagion" from one financial party in a transaction to another.

More recently an additional factor has become paramount: the "greening" of capitalism. In the name of such vacuous concepts as "sustainability" the expansion of production is being constrained. There is a strong cultural aversion to genuine innovation and dynamic growth. This pervasive mood in society has intensified the problem of economic atrophy still further.

Any solution to the economic crisis must take into account these characteristics of the contemporary economy. Crude models of the downturn inevitably lead to flawed solutions. Krugman's proposals to bolster the sagging economy may be at the height of fashion but they look destined to fail to counteract the descent into depression economics.

Labels: book, economics, Fund Strategy, review

After yesterday’s post on simple living I was reminded by a television advert that there is a long history of popular culture lauding the simple life. Evidently the Little House on the Prairie, a 1974-1983 television series depicting a family in a village in the American Midwest in the late nineteenth century, is now available on DVD. It is based on books which were first published in America in the midst of the Great Depression of the 1930s. Other television programmes on a similar theme include the Waltons (1972-1981), on a family facing rural hardship in Virginia in the 1930s, and the Good Life (1975-78 – called Good Neighbours in America), a comedy on a couple who decide to opt out of the “rat race” in suburban Britain.

Labels: book, ethics, television

Mother Jones, a radical American publication, has an article by Michael Agger discussing several books on self-sacrifice in its November / December issue.

It starts by discussing Henry David Thoreau and his book Walden. For those not versed in American culture Thoreau was, among other things, a nineteenth century advocate of simple living.

The article then moves on to the present day with a discussion of Colin Beaven:

“The most notorious neo-Thoreauvian might be Colin Beavan, a 45-year-old New Yorker better known as No Impact Man, and even better known as The Man Who Doesn't Let His Wife Use Toilet Paper. That last detail was the highlight of a 2007 New York Times profile of Beavan, which portrayed how he, his wife, and their two-year-old daughter were attempting to live in downtown Manhattan with zero "net impact" on the environment. This goal involves eating only organic food grown within a 250-mile radius, composting inside their small apartment, forgoing paper, carbon-based transportation, dishwashers, TV, and adhering to whatever new austerities Beavan dreams up.

“Naturally, Beavan is hoping his no impact experiment has maximum impact. Like Thoreau, who, after all, was living on Emerson's land, Beavan is well connected. He has a book contract. His wife's friend has made him the subject of her documentary film, and he has a website, where people praise his boldness and question his motives.”

He almost makes Ethan Greenhart, spiked’s spoof environmental columnist, seem sane in comparison.

The article then goes on to discuss the following books:

* Judith Levine, Not Buying It

* Mary Carlomagno, Give It Up!: My Year of Learning to Live Better With Less

* Sara Bongiorni, A Year Without "Made in China": One Family's True Life Adventure in the Global Economy

* Alisa Smith and JB MacKinnon Plenty: One Man, One Woman, and a Raucous Year of Eating Locally

In conclusion Agger argues that: “The ultimate lesson of the new Thoreauvians seems to be that change is rarely drastic. We must strive for continuous, daily, incremental improvement toward whatever social, environmental, and economic goals we deem important.”

Labels: America, book, consumption, ethics, spiked

Energise! (Beautiful Books) by James Woudhuysen and Joe Kaplinsky is finally out. The book’s starting point is the need to bolster the supply of energy if humanity is to meet its full potential. Not only does the content look excellent but the presentation and production quality look superb. A must read book.

Labels: book, economics, energy

Monthly Review, an American left wing publication, has an article by Immanuel Wallerstein, a senior research scholar at Yale, on “The Human Costs of Economic Growth” in its December issue. The title is misleading as the article is a review of Amiya Kumar Bagchi’s Perilous Passage: Mankind and the Global Ascendancy of Capital (Rowman & Littlefield, 2005). The most explicit reference to the headline states that Bagchi:

“wishes to center his attention on the degree to which economic growth under capitalism is very poorly correlated with human development, even in the West. His book is an attempt to analyze in detail the human suffering that has been at the basis of ‘the advantages reaped by the European ruling classes’”.

Most of the review focuses on different explanations for the relatively rapid economic growth of the world over the past two centuries. However, from Wallerstein’s account the book sounds highly sceptical of the benefits of economic growth:

“Bagchi analyzes this capitalist world not in terms of how much growth it made possible but how much human development it made possible, and in this regard he finds it very wanting. One of his principal services to readers is his pulling together of the demographic literature on life expectancy, the public health literature on disease prevention and cure, data on nutrition, income levels, and the various forms of labor coercion to give us a nuanced picture of human development over time and throughout the world, one that is differentiated by geography, age cohorts, and gender.”

Labels: book, development, economics, growth

Yesterday I went to the launch of the International Growth Centre at the London School of Economics (LSE). The international network of scholars is a joint venture between LSE and Oxford University with funding of £42m from Britain’s Department for International Development (DFID).

Superficially the tone was incredibly pro-growth. This was reflected in a DFID booklet (PDF) handed out at the event called Growth: Building Jobs and Prosperity in Developing Countries. It opens with the sentence: “Economic growth is the most powerful instrument for reducing poverty and improving the quality of life in developing countries”. Much of the rest of the text is in a similar vein.

However, numerous caveats to the initially upbeat assessment of growth are subtly introduced including:

* An emphasis on “poverty reduction” rather than all-rounded development.

* An emphasis on the importance of climate change.

* References to “environmental sustainability” and “low carbon” growth.

The whole approach is also technocratic. It emphasises “growth diagnostics” - experts identifying the barriers to growth - rather than mass participation in development. Although it discusses “ownership” of projects by third world nations this conception only seems to take in a narrow elite of government officials, business leaders and non-governmental organisations (“civil society”).

I also notice that Paul Collier, one of the directors of the centre and a speaker at yesterday’s event, has a forthcoming book, Wars, Guns and Votes (Bodley Head), out on development. It evidently extends his call for United Nations intervention in troubled areas (see 14 May 2007 post) - an initiative that can only make matters worse for the world’s poorest countries.

Labels: Africa, book, climate, development, economics, environment, growth

William Easterly, a professor at New York University and one of the world’s leading conservative development economists, has done a belated review (PDF) of Paul Collier’s The Bottom Billion ( “Foreign aid goes military”, New York Review of Books 55(19), 4 December 2008). Easterly looks at the increasing trend to link development to calls for Western military intervention. He also argues Collier is guilty of statistical fallacies such as confusing correlation with causation.

Labels: aid, book, development, economics, inequality

Margaret Atwood, a Canadian writer and activist, has had a non-fiction book published on debt. Payback: Debt and the Shadow Side of Wealth is a collection of essays based on the annual Massey lectures she gave this year. From what I can gather it is against “greed” and pro-environmentalist. For an extract click here.

Labels: book, debt, environment, finance

Just as the world appears to be on the edge of an economic downturn New Scientist (18 October) comes along with a special issue on “The folly of growth”. Its online edition edition is even bleaker with a headline of “How our economy is killing the earth”. It seems to be based on the hoary old argument that the economy is growing exponentially in a finite world. Contributors include many of the usual suspects such as Herman Daly, Susan George, Tim Jackson and Andrew Simms. Along with the customary references to books by Herman Daly, Paul Ehrlich, Al Gore and Jeffrey Sachs are others by Peter Dauvergne, Herve Kempf and James Gustave Speth.

If only the magazine would stick to science rather than recycling dodgy economics.

Labels: book, economics, environment, growth, science

The backdrop to the 2008 Booker Prize Winner, White Tiger by Aravind Adiga, is evidently inequality and getting rich in India. I could be wrong but it sounds relevant to the growth sceptic discussion. The chairman of the award judges was Michael Portillo, a former Conservative politician in Britain, so it should not be surprising that the winning novel has a political theme.

Labels: book, india, inequality

This week my recent Fund Strategy news analysis on the market meltdown (see 6 October post) was reproduced on Real Clear Markets while spiked ran an updated version of my review of Robert Reich’s Supercapitalism. I was also invited to appear on the Al Jazeera English TV station and Sky News but could not do either as I was in Dubai. It seems that I am at my most popular during a global financial crisis!

Labels: book, economics, finance, Fund Strategy, media appearances, review, spiked, television

Development Redefined, a new book by Robin Broad and John Cavanagh, promises to provide a critique of the Washington Consensus or “market fundamentalism”. Unfortunately, judging by its endorsements – including Walden Bello, Naomi Klein and Vandana Shiva – it is likely to prove even more conservative than the ideas it criticises.

Labels: book, development, economics

Duncan Green of Oxfam GB has started a blog on development issues. Given the substantial (and often pernicious) influence of non-governmental organisations (NGOs) in development it will probably prove worth monitoring. Oxfam is one of the most influential of such organisations.

On Green’s recent book on development see my 22 June 2008 post.

Labels: book, development, economics

An interesting article by Sameer Panya in Miller McCune on apocalyptic visions in movies, popular books and TV. Examples he points to include the Dark Knight (the latest Batman movie - evidently shows the Joker trying to destroy the world for sheer pleasure), Wall-E (see my post of 21 July 2008), Battlestar Gallactica (the recent TV version) and Cormac McCarthy’s The Road ( a novel which comes out as a film later this year). Two recent books examine this phenomenon: In Apocalyptic Dread by Kirsten Moana Thompson and Shocking Representation by Adam Lowenstein.

I wrote about apocalpytic visions in non-fiction in my post of 24 April 2008. I also used the introduction from Mad Max II to introduce my recent Fund Strategy feature on oil (see 26 August 2008 post).

Such visions seem to represent, in an extreme form, the fear of the future that is so prevalent at present.

Labels: apocalyptic, book, film

There have been several interesting articles and discussions this week but until now I have been too busy to blog them all. Here is a quick round-up:

* Debate on geo-engineering. The Royal Society (Britain’s premier science organisation) has published a series of papers in its Philosophical Transactions on geo-engineering. That in turn prompted a substantial article in the Economist (6 September edition) and a piece by Oliver Tickell (an environmental campaigner) on the Guardian comment is free site supporting geo-engineering but only if it is linked to a reduction in emissions.

* Book on Nazi’s green credentials. I came across this when I heard radio presenters making fun of the title How Green were the Nazis?. To me it is a perfectly reasonable question and the book looks interesting. There is no doubt that many Nazis supported what are today classified as environmental ideas - which does not mean that all environmentalists are Nazis. The most serious critique I could find of the book was in Haaretz (Israel’s leading newspaper).

* Critique of Garrett Hardin’s classic article on “The tragedy of the commons” from a leftist viewpoint. Available here.

* Article on conservative assumptions of organic food movement. Conservative in a literal Burkean sense. Available here.

* Poll on hostility to local development in America, Britain and Canada. Available here.

* James Heartfield on Enron as a pioneer of environmentalism. Based on extracts from his latest book. Available here.

Labels: book, development, economics, environment, finance, food, geo-engineering

Spiked has published an extended version of my review of Robert Reich’s Supercapitalism. The original was published in Fund Strategy (see 4 August 2008 post).

Labels: book, economics, review, spiked

Chrystia Freeland, the US managing editor of the Financial Times (FT), reviews what she describes as a “fine new book” on “the most important US economic trend, and hence most critical domestic issue - growing income inequality” (FT, 25 August): Claudia Godlin and Larry Katz, The Race Between Education and Technology, Belknap Press.

However, I’m not convinced by her contention that “this trend is hard to discuss in the US”. This blog alone includes numerous references to the debate on rising inequality in America.

Labels: America, book, inequality

Tom Friedman, a foreign affairs columnist for the New York Times, is having a new book published in September called Hot, Flat and Crowded. Evidently he argues that America should pursue environmental goals both as a good in itself and because it can help the nation retain its position of world leadership. It sounds like it puts him firmly in the neo-Malthusian camp (for Friedman's earlier work on this theme see post of 15 April 2007).

Labels: America, book, environment, Malthus

I have finally managed to find a publisher for my book on growth scepticism! I tried three other publishers before I found my present one but each of them backed away when they realised the full implications of my argument. The experience reinforced my view that an uncompromising defence of prosperity is both necessary and likely to prove unpopular in some quarters.

Labels: book, growth

Miller-McCune magazine, a publication from the Miller-McCune Center for Research, Media and Public Policy in California, has a useful review essay by David Villano on the “more-is-less” thesis. In other words it examines (sympathetically) the argument that it is possible to be more prosperous while consuming less.

Many of the points it makes are familiar – Americans consume far more per head than most of the rest of the world, the threat of climate change is imminent, the need to change lifestyles etc – but it includes many useful references. Among them are Confronting Consumption, (MIT Press) a 2002 book on America’s consumer society co-edited by Michael Maniates. Others include the California-based Global Footprint Network, the Voluntary Simplicity Movement, Redefining Progress and Mean Genes, a book on how our desire to consume is embedded in our DNA.

Labels: affluenza, America, book, climate, consumption, environment, footprint, inequality, progress, review, sustainability

Dick Meyer, a veteran American journalist, has written an interesting-sounding book on self-loathing in America with the brilliant title of Why We Hate Us (Crown 2008). To quote the blurb from his publisher:

“Meyer argues—with biting wit and observations that make you want to shout, “Yes! I hate that too!”—that when the social, spiritual, and political turmoil that followed the sixties collided with the technological and media revolution at the turn of the century, something inside us hit overload. American culture no longer reflects our own values. As a result, we are now morally and existentially tired, disoriented, anchorless, and defensive. We hate us and we wonder why.”

No doubt there is much that is wrong with Meyer’s analysis but he raises some important questions. There certainly is a strong element of self-loathing in America and Western culture more generally. This is apparent in many areas including environmentalism, identity politics and the hostility towards Chinese economic development. It is a topic that is worth examining in more detail.

An extract from the book and interview with the author are available here.

Labels: America, book, china, consumption, happiness

Today’s Guardian has an unashamedly one-sided review essay by Tim Flannery (Australian academic, climate change activist and author of The Weather Makers), of books on climate change. Among those authors recommended in the piece are works by Al Gore (Earth in the Balance), Mark Lynas (Six Degrees), George Marshall (Carbon Detox) and Oliver Tickell (Kyoto2). The review concentrates on British writers but American authors mentioned include Keith Bradsher (High and Mighty - an interesting sounding book on SUVs), Ross Gelbspan (Boiling Point), William McDonough (Cradle to Cradle), Bill McKibben and Gus Speth. Bjorn Lomborg, a leading sceptic on climate change, is mentioned in a few sentences but disparagingly dismissed.

One telling sentence in the article: “Few books about climate change have been written by the meteorologists and atmospheric physicists that dominate the field”. So even in relation to the science of climate change – as opposed to the politics or economics – there are few popular books written by experts. Pro-environmentalist non-specialists seem to dominate the popular debate.

In relation to the economics of climate change the Stern Review and William Nordhaus (A Question of Balance) are mentioned.

Labels: book, climate, consumption, economics, environment, review, science

Anything that winds up George Monbiot, the Guardian’s most high profile environmental columnist, is worth looking into. He wrote a comment entitled “Hypocrites unite!” in response to a new book by Julie Burchill, a well known British writer, on hypocrisy. Monbiot deployed what could be called the standard hypocrisy defence. In addition to admitting to being a “posh git” (his father was deputy chairman of the Conservative party) he goes on:

“Sure we are hypocrites. Every one of us, almost by definition. Hypocrisy is the gap between your aspirations and your actions. Greens have high aspirations - they want to live more ethically – and they will always fall short. But the alternative to hypocrisy isn’t moral purity (no one manages that) but cynicism.”

This conveniently absolves him of any need for consistency but it is also untrue. Greens are characterised by their low expectations rather than high aspirations. It is their glum view of humanity that leads them to elevate the idea of natural limits to human action. It is hard to imagine a more cynical outlook.

Those who want a more considered critique of green elitism and double standards should read James Heartfield’s book on the subject (see 17 February 2008 post).

Labels: book, environment, ethics

The following review by me appeared in this week’s Fund Strategy.

Robert Reich blames big business and technological progress for the erosion of democracy. But his flawed thesis is self-serving and - worryingly - he calls for a lowering of living standards.

Supercapitalism is about a fundamental schism in contemporary society. Robert Reich, a professor at Berkeley and labor secretary under President Bill Clinton, argues that big business is increasingly undermining democracy. Although people have benefited enormously as consumers and investors from this trend they are losing out in their capacity as citizens. His understated conclusion is that people should be pushed into accepting falls in living standards in return for greater democracy.

Reich's critique of contemporary capitalism is more sophisticated than many. He eschews explanations that simply attack human greed or slate conservative politicians. Reich also acknowledges that the recent era of big business has brought some substantial benefits.

But Reich's confusion of basic categories leads him to serious errors and damaging political conclusions. The key development to understand is the demise of the role of humans as producers rather than the rise of consumption. To the extent that consumption has become more important it is largely through default. The striking trend of the past 30 years is in the reduction in importance attached to humanity's productive role.

This productive side of humanity should not be understood simply in terms of making widgets. It needs to be put more broadly in the context of what might be called "the human subject": the capacity of people to make and remake the world around them. The diminished sense of human subjectivity, rather than the rise in importance of consumption, is the key to understanding the trends identified by Reich.

Reich's notion of supercapitalism has to be set against the "not quite golden age" of 1945-75. That period embodied many of the values that he holds dear: it was an era of relative equality, job security and trust. There was also a compact between labour unions and big business. Yet Reich is balanced enough to acknowledge it was far from perfect. For example, women and minorities suffered severe discrimination.

For Reich this set-up began to break down in the second half of the 1970s. New technology increased competition between corporations. This in turn led to a new era of globalisation, new production techniques and deregulation.

He acknowledges that the new era has brought enormous benefits. Thanks largely to innovations in medical science the average American lives almost 15 years longer than in 1950. Americans are also rich and have a far wider range of consumer choices than in the 1970s. Other countries too have benefited from similar developments.

However, many of the positive features of the not quite golden age have gone too. Societies have become more unequal, job security has diminished and trust in politicians has disappeared. Corporations through their incessant lobbying have, in Reich's view, undermined the democratic process.

Against those who argue that conservative politicians, such as Ronald Reagan in America or Margaret Thatcher in Britain, are to blame for this shift Reich points out (correctly) that the shift predates their time in office. Reagan was president from 1981-89 while Thatcher was prime minister from 1979-1990 yet the shift started in the 1970s. Both leaders simply intensified an attack on the post-War consensus, particularly in relation to unions, that had started before their time in office.

However, in relation to this point Reich seems to be suffering from a temporary memory lapse. The attack on the consensus in America started in earnest under the presidency of Jimmy Carter (1977-81). It was under Carter's presidency that Reich himself was a political appointee at the Federal Trade Commission. Reich does not deny his position but is shy of drawing any conclusions about the role of the Democrats in breaking the consensus. In Britain the Labour government of 1974-9 played a similar role in launching an assault on unions and destroying post-War institutions.

More broadly the way to understand this shift is as a response to the end of the post-War boom. After the second world war the world economy, particularly the developed countries, grew at record rates. But by the early 1970s signs of economic crisis were clear. This lead governments on both sides of the Atlantic to launch an assault on the unions and give much freer rein to business.

This trend in turn meant that ordinary people had much less of a say in their lives. Politics was no longer about competing camps or competing visions of how to organise society. Instead the era of "Tina" - as Thatcher put it "There Is No Alternative" came to the fore. The focus of politics switched to regulating individual behaviour - including such areas as drinking, smoking and even eating - rather than battling over how to organise society.

This is a much more convincing explanation for the shifts that Reich identifies than his focus on technology. Although Reich denies being a technological determinist his explanation exaggerates the role of technology and understates the role of political defeat in creating the current climate.

Reich's outlook also leads to some deeply conservative conclusions despite his reluctance to spell them out in detail. He is in favour of "new rules of the game" (read regulation) particularly in relation to corporate lobbying. Reich seems to lack confidence in the capacity of others to counter the arguments of corporations.

More worryingly, he twice advocates "sacrifice" by ordinary people by which he seems to mean an acceptance of lower living standards. He appears to take the peculiar view that reducing living standards will somehow bolster democracy.

In reality democracy can only be achieved by a revival of politics in the proper sense of the term. This means relaunching a battle of ideas over competing visions of how to organise society. It involves a struggle that is entirely consistent with raising rather than lowering the living standards of the bulk of the population. It is Reich's demand for sacrifice that is the antithesis of democracy.

Labels: book, economics, Fund Strategy, globalisation, review, technology

Eric Rolston, an American science writer, has written a fascinating sounding book on carbon. Despite its sensationalist sub-title – “how life’s core element has become civilization’s greatest threat” – The Carbon Age rightly makes the point that carbon is the building block of life. Despite the element’s key role in the natural world it is strangely seen as a great threat to humanity nowadays.

Labels: book, energy, environment, science

Barbara Ehrenreich, a prominent American activist and writer, has added her voice to the debate about inequality in America. This Land is Their Land (Metropolitan Books), her book on American extremes, seems to be receiving a lot of publicity. This includes an appearance on Comedy Central’s The Colbert Report.

Labels: America, book, inequality, television

Oxfam has published a book that looks likely to become highly influential in the development debate. Although From Poverty to Power, written by Duncan Green, probably says little original it codifies the current development consensus. It has a foreword by Amartya Sen and is endorsed by, among others, Dani Rodrik of Harvard. An accompanying website includes a full download of the book, background papers and a blog. The New Statesman (23 June) has already carried an article on it.

Labels: book, development, economics, inequality

Icfai Books in Hyderabad, India, has published Prosperity Index, a collection of articles including my January 2007 spiked essay arguing “There is no paradox of prosperity”. It is edited by Asha B Joshi, a faculty associate at the Icfai Business School Research Centre in Ahmedabad.

Labels: book, happiness, india, spiked

Josie Appleton has a perceptive review of Benjamin Barber’s Consumed in the latest (April) spiked review of books. Rather than focus too closely on the book itself she looks at the changing ethic of capitalism. In broad terms her breakdown is the following:

* “The capitalist bookkeeper”. The model was Benjamin Franklin (18th century). Its chief theoritician was Max Weber in his Protestant Ethic (1910).

* “The counter-cultural ethic” of the 1920s and later the 1960s. Analysed by Daniel Bell in his Cultural Contradictions of Capitalism (1976).

* “Infantalisation”. Posited as the ethic for 21st century capitalism by Barber. However, Appleton argues it is misleading to talk of an ethic of consumption and that Barber’s is a weaker book than Bell’s. Rather it has taken on a greater importance in society by default. She cites George Simmel in his Philosophy of Money as a useful theorist of consumption.

It is a useful complement to Dolan Cummings’ recent essay on contemporary anti-capitalism (see 9 March 2008 post) which also refers to Barber’s book.

Labels: book, consumption, economics, review, spiked