Musings on a barbarian's interests
My friends think I’m nuts and my family seems to like me less for it, but I’ve spent my last two vacations catching up on my Economics. In no particular order, a few reviews of the Economics must-reads for the times:
Ascent of Money – Niall Ferguson
Ferguson is one of my favorite historians, hands-down. His hitiographic approach — international history — seems like an optimal one for tracing the thematic emergence of the most important aspects of our modern financial system: banking; bond markets; share ownership in limited liability companies; credit/money markets; risk management systems — insurance and other hedge instruments. He also does a great job of capturing many of the more colorful characters involved in these historical developments.
While I do think this is a must-read for anyone interested in the topic, one nit I have with the book is it’s facile jump from historical examination to an explanation of our current, emerging crisis. To me, the book both failed to tie its various financial themes together in this current events study, and didn’t give this study the depth required to have these chapters stand as one of the most significant parts of the book.
The New Paradigm for Financial Markets: The Credit Crisis of 2008 and What It Means – George Soros
This was a great paper — but a book it should not be. Soros’ separation of the housing bubble v. the long-term credit/leverage bubble we’re seeing — and the associated de-gearing we’re experiencing — is useful and extremely well argued. For these reasons this is a worthy read. That said, his repetitive intro chapters — how many times does a smart person really need to be introduced to the conecpt of reflexivity?! — and overall lack of coherence from section-to-section really make this a good paper bookended by interesting supporting essays. If you read it as such you won’t be dissapointed.
The Crash of 1929 – John Kenneth Galbraith
The Great Crash. Galbraith. ‘Nuff said. A history most relevant to what we’re seeing: the vagaries of varying government involvement and de-regulation; investor panic; rampant speculation; non-transparency. Sound familar? Read this book.
The Theory of Economic Development – Joseph Schumpeter
I admit I tend Schumpterian — even as Keynsianism seems to be sweeping back into favor. This is a classic, and an expansion on a set of Schumpeter’s essays that I devoured when I read Growth Economics way back when. Fluidly written, this book separates and rigorously — and interestingly — examines the key components of an economic growth system: Capital; Interest; Capitalists (risk capital lenders); and Entrepreneurs (process and product innovators — separate of Managers).