Every other week in the Read More newsletter – available for free to all registered Project Syndicate users – we highlight new and noteworthy works written by PS contributors. This holiday season, we present a selection of books that you don’t want to miss.
The authors say: “Progress and Power provides the thousand-year backstory for ChatGPT and other generative artificial intelligence. We have been struggling with the consequences of automation at least since watermills and windmills spread across medieval Europe. Contrary to today’s conventional wisdom, new technology does not necessarily bring shared prosperity. Countervailing powers are always needed to press for higher wages and better working (and living) conditions. With highly capable AI coming at us unbelievably fast, Power and Progress offers a way to understand the technology’s likely impact – and how we can steer progress onto a more positive and inclusive path.”
Gordon Brown, Mohamed El-Erian, and Michael Spence
The authors say: “At the heart of today’s permacrisis are broken approaches to growth, economic management, and governance. While these approaches are broken, they are not beyond repair. In Permacrisis: A Plan to Fix a Fractured World, we offer an explanation of where we’ve gone wrong and put forward a provocative, inspiring plan to change the world for the better. We set out how the world can prevent crises and better manage the future, for the benefit of the many and not the few. This is our answer to the question of what change should look like.”
Cochrane says: “The Fiscal Theory of the Price Level explores a new view of the fundamental determinant of inflation: The price level adjusts so that the real value of government debt equals the present value of primary surpluses. In the book, I develop the theory, I integrate it with central banks that set interest-rate targets, and I place it in the framework of standard dynamic economic models. I also consider broad issues of monetary doctrine and how to analyze events. Throughout, the emphasis is on making fiscal theory useful, to academic researchers, to central-bank modelers, and to those making and thinking about monetary and fiscal policy.”
Coyle says: “Cogs and Monsters: What Economics Is And What It Should Be is my plea for criticisms of economics to stop focusing on tired old straw men – ‘Why does economics use so much mathematics?' 'Why does it make unrealistic assumptions about behavior?’ – and instead focus on the discipline's actual weaknesses. I highlight a number of those weaknesses in the book, such as a lack of diversity in the profession and a particularly serious failing as a social science. Economics suffers from the positivist claim that the discipline deals only with objective facts, even though economists are always advising about ‘good’ and ‘bad’ courses of action, and thus implicitly making value judgements. And the workhorse models economists use to assess policy decisions still do not reflect the characteristics of the digital economy, such as the fact that data (unlike, say, grain) are not depleted when one person consumes it.”
Guriev says: “In Spin Dictators: The Changing Face of Tyranny in the 21st Century, Daniel Treisman and I show that nondemocratic regimes are not what they used to be. Whereas the tyrants of the twentieth century ruled through violence, fear, and ideology, most modern autocrats control their citizens by distorting information and simulating democratic procedures. Like spin doctors in democracies, they distort facts to win support. Beyond showing how such dictators emerge and operate, we examine the unique threats they pose and offer recommendations about how democracies should respond.”
Mody says: “Indian elites, living in first-world gated communities, tout a narrative of India on the move. The global echoes of that narrative can be seen in predictions of an ‘Indian century.’ But look beyond the hype, and you see hundreds of millions of Indians who are struggling to find gainful employment, have access only to poor education and health care, and are continually exposed to polluted air and water. You see women facing endemic violence in their homes and in public spaces, agriculture in distress, harsh urban living conditions, and a coercive judicial system for all but the most privileged. Dying rivers and a marauding climate crisis are further damaging lives and livelihoods. India is Broken is my effort to tell the post-independence history of eroding social norms and public accountability, which leave the country and its people at a dangerous impasse.”
Patten says: “I wrote The Hong Kong Diaries during my five years as the last British governor of that city – a job that I could never have done without the support of my wife and family. I tried to balance an account of the challenges that arose as I engaged in high-level negotiation with China in order to secure Hong Kong’s future with descriptions of the thoroughly enjoyable business of effectively serving as mayor of a great and successful Asian city. Hong Kong was promised that it would be able to maintain its way of life, based on the rule of law and including all the freedoms of an open society, until 2047. We did what we could, in the face of Chinese threats and bullying, to lay the foundations for this promise to be kept. But, as I explain in the book, the nature of Chinese communism meant that we could not be certain whether we had succeeded.”
Rajan says: “In August 2005, I pointed to the perverse incentives for private players to take risks in a low interest-rate environment. It was no comfort to me when these risks materialized in the 2008 global financial crisis. But as central banks pursued yet more accommodative – and even unorthodox – policies to revive ailing economies, I worried that we were ignoring a primary cause of the crisis: central banks. They intervened merrily in a variety of markets, supporting prices and sometimes market players. They occasionally tied monetary-policy actions to market movements and sentiments. Somewhat perversely, the more the central bank did, the more it was expected to do, and the more it ended up doing. For instance, the mini banking crisis in March 2023 was alleviated by massive intervention by the US Federal Reserve and Treasury, including the effective insurance of all uninsured deposits, but this no longer seems to register as an aberration in the public consciousness. My central argument in this book is that monetary adventurism is rarely as much of a panacea as we think and often has unintended effects, which require yet more adventurism to address. The book is a plea to central bankers again to become more conservative and boring, and not to assume that they have all the solutions.”
Roach says: “In the past five years, the United States and China have become embroiled in a trade war, a tech war, and now a new cold war. In Accidental Conflict, I argue that the world’s two most powerful countries would not have entered this ominous trajectory of conflict escalation had it not been for the false narratives that each embraces about the other. America’s fixation on its trade deficit with China and China’s failed pro-consumption rebalancing strategy are leading cases in point. Amplified by information distortion (America) and state-sponsored censorship (China), I warn that this confluence of false narratives has become the high-octane fuel of conflict escalation that could be ignited by any number of sparks, not least tensions over Taiwan. To avoid a catastrophic clash between the leading and rising power, I conclude with a plan for conflict resolution, featuring a market-opening Bilateral Investment Treaty and a new architecture of engagement centered around a detailed proposal for a US-China secretariat.”
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Iran’s mass ballistic missile and drone attack on Israel last week raised anew the specter of a widening Middle East war that draws in Iran and its proxies, as well as Western countries like the United States. The urgent need to defuse tensions – starting by ending Israel’s war in Gaza and pursuing a lasting political solution to the Israeli-Palestinian conflict – is obvious, but can it be done?
The most successful development stories almost always involve major shifts in the sources of economic growth, which in turn allow economies to reinvent themselves out of necessity or by design. In China, the interplay of mounting external pressures, lagging household consumption, and falling productivity will increasingly shape China’s policy choices in the years ahead.
explains why the Chinese authorities should switch to a consumption- and productivity-led growth model.
Minxin Pei
doubts China’s government is willing to do what is needed to restore growth, describes the low-tech approaches taken by the country’s vast security apparatus, considers the Chinese social-credit system’s repressive potential, and more.
China’s authorities have powerful economic-policy levers at their disposal to achieve their 5% growth target this year and put the economy on a more sustainable long-term growth path. But several trends – from the shift toward state capitalism to population aging to the loss of goodwill between Chinese and Americans – could thwart China’s ambition to join the ranks of high-income countries by mid-century.
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Daron Acemoglu and Simon Johnson
Power and Progress: Our Thousand-Year Struggle Over Technology and Prosperity
The authors say: “Progress and Power provides the thousand-year backstory for ChatGPT and other generative artificial intelligence. We have been struggling with the consequences of automation at least since watermills and windmills spread across medieval Europe. Contrary to today’s conventional wisdom, new technology does not necessarily bring shared prosperity. Countervailing powers are always needed to press for higher wages and better working (and living) conditions. With highly capable AI coming at us unbelievably fast, Power and Progress offers a way to understand the technology’s likely impact – and how we can steer progress onto a more positive and inclusive path.”
Gordon Brown, Mohamed El-Erian, and Michael Spence
Permacrisis: A Plan to Fix a Fractured World
The authors say: “At the heart of today’s permacrisis are broken approaches to growth, economic management, and governance. While these approaches are broken, they are not beyond repair. In Permacrisis: A Plan to Fix a Fractured World, we offer an explanation of where we’ve gone wrong and put forward a provocative, inspiring plan to change the world for the better. We set out how the world can prevent crises and better manage the future, for the benefit of the many and not the few. This is our answer to the question of what change should look like.”
John H. Cochrane
The Fiscal Theory of the Price Level
Cochrane says: “The Fiscal Theory of the Price Level explores a new view of the fundamental determinant of inflation: The price level adjusts so that the real value of government debt equals the present value of primary surpluses. In the book, I develop the theory, I integrate it with central banks that set interest-rate targets, and I place it in the framework of standard dynamic economic models. I also consider broad issues of monetary doctrine and how to analyze events. Throughout, the emphasis is on making fiscal theory useful, to academic researchers, to central-bank modelers, and to those making and thinking about monetary and fiscal policy.”
Diane Coyle
Cogs and Monsters: What Economics Is, and What It Should Be
Coyle says: “Cogs and Monsters: What Economics Is And What It Should Be is my plea for criticisms of economics to stop focusing on tired old straw men – ‘Why does economics use so much mathematics?' 'Why does it make unrealistic assumptions about behavior?’ – and instead focus on the discipline's actual weaknesses. I highlight a number of those weaknesses in the book, such as a lack of diversity in the profession and a particularly serious failing as a social science. Economics suffers from the positivist claim that the discipline deals only with objective facts, even though economists are always advising about ‘good’ and ‘bad’ courses of action, and thus implicitly making value judgements. And the workhorse models economists use to assess policy decisions still do not reflect the characteristics of the digital economy, such as the fact that data (unlike, say, grain) are not depleted when one person consumes it.”
Sergei Guriev and Daniel Treisman
Spin Dictators: The Changing Face of Tyranny in the 21st Century
Guriev says: “In Spin Dictators: The Changing Face of Tyranny in the 21st Century, Daniel Treisman and I show that nondemocratic regimes are not what they used to be. Whereas the tyrants of the twentieth century ruled through violence, fear, and ideology, most modern autocrats control their citizens by distorting information and simulating democratic procedures. Like spin doctors in democracies, they distort facts to win support. Beyond showing how such dictators emerge and operate, we examine the unique threats they pose and offer recommendations about how democracies should respond.”
Ashoka Mody
India Is Broken: A People Betrayed, Independence to Today
Mody says: “Indian elites, living in first-world gated communities, tout a narrative of India on the move. The global echoes of that narrative can be seen in predictions of an ‘Indian century.’ But look beyond the hype, and you see hundreds of millions of Indians who are struggling to find gainful employment, have access only to poor education and health care, and are continually exposed to polluted air and water. You see women facing endemic violence in their homes and in public spaces, agriculture in distress, harsh urban living conditions, and a coercive judicial system for all but the most privileged. Dying rivers and a marauding climate crisis are further damaging lives and livelihoods. India is Broken is my effort to tell the post-independence history of eroding social norms and public accountability, which leave the country and its people at a dangerous impasse.”
Chris Patten
The Hong Kong Diaries
Patten says: “I wrote The Hong Kong Diaries during my five years as the last British governor of that city – a job that I could never have done without the support of my wife and family. I tried to balance an account of the challenges that arose as I engaged in high-level negotiation with China in order to secure Hong Kong’s future with descriptions of the thoroughly enjoyable business of effectively serving as mayor of a great and successful Asian city. Hong Kong was promised that it would be able to maintain its way of life, based on the rule of law and including all the freedoms of an open society, until 2047. We did what we could, in the face of Chinese threats and bullying, to lay the foundations for this promise to be kept. But, as I explain in the book, the nature of Chinese communism meant that we could not be certain whether we had succeeded.”
Raghuram G. Rajan
Monetary Policy and Its Unintended Consequences
Rajan says: “In August 2005, I pointed to the perverse incentives for private players to take risks in a low interest-rate environment. It was no comfort to me when these risks materialized in the 2008 global financial crisis. But as central banks pursued yet more accommodative – and even unorthodox – policies to revive ailing economies, I worried that we were ignoring a primary cause of the crisis: central banks. They intervened merrily in a variety of markets, supporting prices and sometimes market players. They occasionally tied monetary-policy actions to market movements and sentiments. Somewhat perversely, the more the central bank did, the more it was expected to do, and the more it ended up doing. For instance, the mini banking crisis in March 2023 was alleviated by massive intervention by the US Federal Reserve and Treasury, including the effective insurance of all uninsured deposits, but this no longer seems to register as an aberration in the public consciousness. My central argument in this book is that monetary adventurism is rarely as much of a panacea as we think and often has unintended effects, which require yet more adventurism to address. The book is a plea to central bankers again to become more conservative and boring, and not to assume that they have all the solutions.”
Stephen S. Roach
Accidental Conflict: America, China, and the Clash of False Narratives
Roach says: “In the past five years, the United States and China have become embroiled in a trade war, a tech war, and now a new cold war. In Accidental Conflict, I argue that the world’s two most powerful countries would not have entered this ominous trajectory of conflict escalation had it not been for the false narratives that each embraces about the other. America’s fixation on its trade deficit with China and China’s failed pro-consumption rebalancing strategy are leading cases in point. Amplified by information distortion (America) and state-sponsored censorship (China), I warn that this confluence of false narratives has become the high-octane fuel of conflict escalation that could be ignited by any number of sparks, not least tensions over Taiwan. To avoid a catastrophic clash between the leading and rising power, I conclude with a plan for conflict resolution, featuring a market-opening Bilateral Investment Treaty and a new architecture of engagement centered around a detailed proposal for a US-China secretariat.”