More of what I'm reading now ...
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Oz Shy, The Economics of Network Industries. Cambridge University Press, 2001 Krugman's book is a good one for "civilians," but you need to know some economics already before you read Oz Shy's textbook on network economics. This is a terrific book that is worth the small amount of effort that it takes to work through the mathematics (mainly a little game theory). Network industries are characterized by
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There is a lot to like about Shy's analysis: it is both theoretical and plainly applied, it looks both at private incentives and at social consequences. There are a number of "gee wiz" conclusions here -- situations where you are just amazed at where the logic of the models has taken you. Here is one to whet your appetite: the consumers of Apple computers are better off if Apples are basically notcompatible with other types of computers (because Apple will have to bribe them to accept the imcompatible machines), although society is better off if they are.
Although I read this book to learn about the high tech industries that are its main subject, I admit that I am drawn to the many unexpected applications of the analysis. You may also be interested to find out if your religion is efficient or not (not efficient if it erects a lot of hurdles to people who want to convert to it). You may also want to know why, under reasonable circumstances, the wages of all attorneys rise if a few of them become more efficient.
Mancur Olson, Power and Prosperity. Basic Books, 2000.
Why can't poor nations overcome their poverty and become rich (or richer or at least less poor)? Here are two books that tackle this big question from completely opposite perspectives and arrive at nearly the same conclusion. Each is interesting, but they are very interesting when read together.
Olson's analysis is top down and abstract. He attempts to derive logically the necessary conditions for economic growth. His analysis is provocative but his conclusions down to earth. For those who are interested in the topic, his analysis of Stalin's tax system, which managed to maximize both tax revenues and work effort is not to be missed. His analysis of reform failures in Russia is also very good.
Olson's conclusion: individual rights are necessary for a growing society, especially property rights. No one is going to invest in society's future if their own future is not firmly linked to it through secure property rights. He concludes that even a bandit prince, who wants to maximize his plunder, would find it necessary to guarantee these rights, if only so that there will be something (if not everything) to take.
De Soto's approach is very much from the bottom up. He and his teams have studied the informal economies in many corners of the less developed world. These people have a lot of capital, he concludes (trillions of dollars of capital, in fact), but they cannot leverage it to get ahead because ... wait for it ... they do not have secure legal rights to their capital. He calls for property reform (including land reform one supposes). His aim, however, is not so much to redistribute capital as to give people legal rights to the capital that they use today. He finds precedent for such a proposal is western history in general and US history in particular.
De Soto's final chapter is his strongest and I encourage everyone to read it. So long as capital is a two-tier system, capitalism is dangerously unstable. Capitalism works in the "west" where useful access to capital exists because of our solid system of property rights. But capitalism is a completely different and very dangerous animal in the "rest" where useful access to capital is limited by archaic property rules. De Soto argues that Marx's critique of capitalism, a dead letter in the west, is alive and well in the rest, where uneven and unequal access to useful capital does really create class systems and class tensions.
De Soto's final reason for reforming property systems in less developed countries is because it is a necessary condition for the survival of capitalism. This is a conclusion that Olson also arrives at, albeit from a much different path.
Here are two books that deserve wide readership. But they are best read together, even though they do not entirely support each other because they complement each other in many useful ways.
Aida: The Musical by Elton John (music), Tim Rice (lyrics) with book by Linda Woolverton, Robert Falls, and David Henry Hwang.
"Suggested by the opera" it says in the program -- that would be Aida by Giuseppe Verdi (1813-1901).
Yes, I know it is not a book, but here is my review of the new Aida. It is a musical about globalization -- not the first one you have seen and not the last one, either. To understand how Aida is a globalization musical, you have to get into the details a bit.
Most people, I suppose, will imagine that this is an American musical because it was produced in America by the quintessential American company, The Disney Company. But Disney is a global business and the people they hired to write the work are less American than International and multicultural. Elton John of Watford and Atlanta and 32 gold and 21 platinum records. Tim Rice of Jesus Christ Superstar, Evita and others. David Henry Hwang of M. Butterfly and Golden Child. Linda Woolverton of Lion King and Beauty and the Beast. You get the idea. This is a global crew.
Verdi's Aida was about the tensions of Victorian globalization. The opera is set in Egypt, but it's really Rome, get it? Verdi was Italian writing for a European audience.. Egypt is threatened by war with Ethiopia (an Italian colony in the 19th century). The love triangle that ties together Aida, Radames, and Amneris is about the tension between imperial center (the Princess) and colonial periphery (Aida, the Ethiopian). Read into this a commentary on 19th century imperialism. Verdi's European audience was comfortable in its imperial opera society, yet also sympathetic to the demand for colonial independence. The symbolism is very powerful: Noble Aida is a made a slave. At the end of the first act priests actually consecrate the imperial sword that enslaved her. Get it?
Three particular things to consider: First, Ethiopia initiates the conflict (colonial uprising). Radames great act of generosity in Verdi's play results in freedom for some Ethiopian captives (what greater insult to colonial imperialism). But the story ends in death and a prayer for peace. The tension between Empire and colony is left unresolved, which is also a fitting commentary on Verdi's times.
The Elton John musical is also set in Egypt, but by the dress of the players we know that it is really London or New York. They are waging war against Nubia, not Ethiopia, which is a significant change. Instead of colonial revolt against the center, we have white aggression against the black periphery which is also North exploitation of the South. The love triangle tension is still there, but it is now about wealth and power-seeking capitalists versus exploited indigenous natives. The context is thus transformed from Victorian imperial globalization to contemporary capitalist globalization.
The Elton John musical makes the new context especially clear by transforming Princess Amneris into a material girl. She sings that "you are what you wear" and celebrates conspicuous consumption (although later she shows that she knows it is only a sad facade).
Three things to consider. The capitalist core is now the aggressor. In Radames' great act of generosity, he gives away all of his material possessions (what greater insult to consumer capitalism). And the ending, well, I think it is a happy ending fitting for a feel good society. The tension between capitalism and indigenous culture is easily reconciled by the Disney folks: capitalism triumphs, but indigenous culture lives on -- in museums, movie theaters, the Broadway stage, and on pay-per-view.
You didn't expect a Disney production to end any other way, did you?
Globalization aside, I liked this musical a lot. Although everyone except Aida seems to have acquired Elton John's Watford meets Atlanta signing accent. The lighting and scenery design are especially stunning.
Soros's new book, Open Society, is really a revision of his previous book, The Crisis of Global Capitalism (1998). If you own the first one (as I do), you might think twice before buying the second (as I did but kind of wish I hadn't) because there is considerable overlap.
What are these books about? Lots of things. At the heart of both books is (an essentially identical) first person account of recent global financial crises. Soros is very strong here, both in description and analysis. His hour-by-hour account of the Russian meltdown is required reading for anyone who wants really to understand the political economy of financial crisis today.
This solid core is wrapped in many layers and several agendas. One layer is Soros talking about himself and his actions -- trying to justify and explain and to carve out a place in history. Mixed in here is a discourse -- often excessively complication, in my view -- of his philosophy of the Open Society. I am basically sympathetic with his views here. In a world where it is impossible to know truth for sure, we should be very careful to preserve an open society that tolerates and even invites a diversity of views. Better this than to embrace one "official" truth that can become the foundation for a regime of tyranny. History is full of examples of the consequences of this mistake.
Soros is a progressive, so he likes to suggest solutions. In the 1998 book his aim was to scare the Dickens out of the reader so that we would take seriously the possibility of global financial collapse. In the new book he acknowledges that this hasn't happened (yet -- I would add -- it hasn't happened yet). So instead of hollering Boo to scare us, Soros presents a very ambitious plan to try to create a global open society. It reminds me a bit of Kant's pacific federation. It is a bit utopian and I suspect that most reviewers will focus on it and talk about how unrealistic it is. Well, yes I agree, but for me it would be a mistake to let this fact cause us to ignore the sound analysis found here. And besides, I'm not sure that we don't need an infusion of idealism every now and then.
Bobos are Bourgeois Bohemians, the new upper class distinguished by education (and taste? Or attitude?) They combine the bohemian attitudes of the 1960s with the bourgeois interests of the 1980s. They are the kind of people who celebrate Earthday by putting on their REI Goretex jackets and driving their Lincoln Navigators to the local Starbucks, where they rage against globalization and multinational corporations with friends they met while doing Ford Foundation post-docs in Costa Rica.
Bobos are pretty easy targets in part because they are a flexible class. It is not that hard to take any thing vaguely ridiculous about American life (the wedding page of the Sunday New York Times, for example) and find a way to make it a Bobo phenomenon. However it must also be said that Bobos are also easy targets because they are ubiquitous. More than once I saw myself in the images Brooks presents -- especially the chapters on Bobo vacationers. I sure found it easier to laugh about Bobos when I thought he was talking about someone else.
Brooks writes about Bobo attitudes, consumption patterns, religious inclinations, and politics. He traces the development of Bobo social thought and the tension between bourgeois and bohemian attitudes and values in the 20th century. This book is funny and insightful, a combination that causes one to think and makes thinking enjoyable. But something is missing. I think what it need is a better attempt to answer the "So What?" question. If you too are interested in the "So What?," I suggest that when you've finished Bobos you read ...
Luxury Fever is the third book in Frank's series on class and inequality in America (the first two were Choosing the Right Pond: Human Behavior and the Quest for Status and The Winner Take-All Society). Frank's discussion of the quest for status through conspicuous consumption (and his personal reluctance to engage in same) fits nicely into Brook's Bobo world. I expect that even Frank would admit to being a Bobo. What I especially like about Luxury Fever is Frank's clear determination to look at the collective consequences of Bobo values. Where Brooks comes away with mixed emotions -- he can see both the good and the bad in Bobo paradise -- Frank is angry and disturbed. He sees Bobo-land degenerating it a world of increasing inequality and declining support for policies to help the poor, unlucky, and disadvantaged. He sees a world where the winners really do take all and it matters more and more which "pond" you are born into.
These are two clever, thoughtful, and timely books. You should read them both.
Robert Wright wants to know the meaning of life and he won't stop, apparently, until he has an adequate answer to this timeless question. Once he nearly had the answer in his grasp. In his first book Three Scientists and their Gods: Looking for the Meaning of Life in the Age of Information (1988) he looked for the answer by interviewing scientists who study complex human systems. At the end of the book he finds himself in a Quaker hostel with Kenneth Boulding, the beloved and respected economist who died a few years ago. As the evening wears on Wright begins to realize that Boulding really does know what the meaning of life is -- but he has become too old and gently unfocused to tell Wright the answer. So Wright had to continue the search on his own. Hence this book and the one that came before it, The Moral Animal.
This book looks for the answer in game theory. Some games are zero-sum: the winners take from the losers. But other games are non-zero, capable to generating wins without offsetting losses. Wright's argument here is that non-zero sum relations have been the "logic of human destiny" -- or at least the engine of social and scientific advancement through the increasing diversity and complexity of life. You need not agree with the main argument of the book to appreciate the fact that non-zero sum opportunities are far more common than is commonly appreciated. Indeed, the world is ruled by little else. Even barbarians at the gate can create opportunity for positive sum relations. Adam Smith's invisible hand is indeed a powerful force. But … so what? What is the meaning of this non-zero sum life? Where does the logic of mutual gain lead? The answer, tentatively revealed in the final chapter, is universal consciousness.
As a rule I don't like collections of articles by many different authors -- too uneven and unfocused! This collection of articles on globalization is uneven, which is to say that I think some of the articles are not very good, but there are a couple especially good essays that make the book worthwhile overall. The piece on globalization and identity by Richard Sennett was especially rewarding. It helped convince me that I need to pay more attention to idendity in my own work. I also like Manuel Castells's brief survey on information technology and globalization. Polly Toynbee's contrarian essay "Who's Afraid of Global Culture" is delightful.
Hutton and Giddens engage in a "conversation" to begin the book that makes a number of nice points. A shame, therefore, that they left their contribution as a rambling exchange instead of actually editing it into a pointed debate. The editors need an editor.
Not what I expected, but still very interesting. Liberalism has always had two faces, according to John Gray. One face is liberalism as a set of universal values (western views of human rights, etc.) growing out of the enlightenment. The other face is liberalism as modus vivendi -- a peaceful way for people to live together and work out or reconcile their differences. Gray argues that the proper face of liberalism is peaceful coexistence, not a universal society.
I think this is an important point, but I am still left feeling a bit empty -- the same reaction I had to Gray's earlier book about globalization, False Dawn. Maybe I just don't appreciate the true philosophical impact of the arguments.
This is a very interesting book; I am sorry that it took me so long to find time to read it. I will certainly read it again. Riesman's book was written at a time when there was still a living memory of Veblen the person. It is fascinating to see one great sociologist try to make sense of another.
I was interested in Riesman's attempts to locate Veblen in an intellectual geography where the other main landmarks are Schumpeter and Marx. Interesting comparisons and contrasts. But, and this is the really interesting part, Riesman proposes that the real key to understanding Veblen is to appreciate the parallels with Mark Twain! (Especially the Mark Twain of Connecticut Yankee, slowly twisting from techno-optimist to social pessimist as the book was being written.) Fascinating!
Zachary's "Roots and Wings" are a bit like Thomas Friedman's "Lexus and Olive Tree," except that Zachary's book explicitly denies the false dichotomy between wings (globalization) and roots (preserving traditional cultural values). (Friedman's book is less certain about globalization and culture.) He argues very strongly for a hybrid, multicultural notions of society -- which he calls "mongrel" culture. Zachary's advocacy of multicultural globalism, however, does not prevent him from recognizing and responding realistically to the problems and tensions that many multi-racial and multi-ethnic cultures experience. It is a stimulating discussion of a controversial topic.
I expressed my own reservations about global cultural homogenization in my book Selling Globalization. Zachary's book helps me understand the reasons for my skepticism and to better appreciate the counter-arguments, too.