Campaign for the American Reader: Five of the best books on how the world’s political economy works

Thursday, November 28, 2013

Five of the best books on how the world’s political economy works

Mark Blyth is Professor of International Political Economy at Brown University. He is the author of Great Transformations: Economic Ideas and Institutional Change in the Twentieth Century.

His new book is Austerity: The History of a Dangerous Idea.

With Toby Ash at Five Books, Blyth discussed five top books on how the world’s political economy works, including:

The Rhetoric of Reaction by Albert O. Hirschman

The reason I ended with this is that my first four books really give you a great understanding of how the modern world emerged and its dynamics. What The Rhetoric of Reaction gives you is a warning – a warning to watch out for bullshit arguments.

Hirschman picks on conservative arguments but you could imagine that these arguments could come from the left as well, because it’s about a form of argument. He has a lovely line in the book when he says that when the same arguments have been used without much modification for 300 years regardless of the area in which they are deployed, we should be suspicious of them. And we should be suspicious of them. You hear this now in the austerity debate – "We all need to tighten our belts." What about the fact that we are all wearing massively different trousers? Who needs to tighten their belts? And why do we need to do this anyway? Here are another couple – "You can’t live beyond your means" or "It’s just a like a family – if a family spends too much, you reduce spending." The problem is that if every family stops spending simultaneously, every family would be unemployed. Again, it’s that paradox.

So what are these rhetorics of reaction? They are perversity, jeopardy and futility.

The classic perversity logic will say: "Look at the welfare state. It was meant to make people better off, and it just led to welfare dependents, druggies and drop outs." Really, is that the case? Well, I grew up on welfare, and I went to free schools and a subsidised university. I am now an Ivy League professor and will pay a load more tax over my lifetime than I ever would had I been brought up with no welfare state and ended up in the army or in jail.

The futility thesis is that you might think it is a good idea to spend money to alleviate the economic shock coming from the Great Recession that began in 2007. But really what you need to do, so the arguments goes, is let things bottom out and start again because if you don’t, the job is incompletely done. This sounds convincing, but if you actually look at the 1920s, countries cut spending all at once and produced a slump that got worse and worse and led to fascism and World War Two. Is that a question of bottoming out and getting to a better place?

So with wonderful examples, he takes us through these superficially convincing logics - perverse outcomes are bound to happen, don’t try that it’s futile or if you do that, you’ll risk everything. It’s a wonderfully written book and just reminds us that so much of what passes for political and economic analysis is rhetorical bullshit.