Economics

Planning Armageddon

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Given our times, I decided to pull this one off the shelf and put its review at the top of the queue. It’s an account of another time a great power attempted, by “economic derangement”, to win a war.

It didn’t go well either.

Review: Planning Armageddon: British Economic Warfare in the First World War, Nicholas A. Lambert, 2012.

In one of the great failed predictions of all time, Norman Angell said, in his 1910 bestselling book The Great Illusion, that war between great powers was unthinkable. It would result in, to quote Lambert, “economic Armageddon – a kind of economic mutually assured destruction”.

Ivan Bloch made a more successful prediction in his 1899 work Is War Now Impossible?:

The future of war is not fighting, but famine, not the slaying of men, but the bankruptcy of nations and the break-up of the whole social organization.

The British government, particularly the Royal Navy, didn’t dispute these ideas. It embraced them. Given its dominance in international shipping, central position in a world network of submarine cables, and that London was the world’s financial capitol, maybe England could cut out an enemy nation from international trade and win a war before it, too, economically bled out.

After the 1898 Fashoda Crisis drove up maritime insurance rates for British ships, the Royal Navy reluctantly realized that attacking and defending trade would have to become part of its strategy. A study was commissioned. A six-week month project stretched into years, but, by 1902, the Royal Navy had a dim view, obscured by the lack of good statistics, of the outlines of the problem.

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The Servile State

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It’s been a while since I’ve reviewed an econ book though this is as much about politics and history as economics.

Essay: The Servile State, Hilaire Belloc, 1912.

I first came across the idea of distributism on Jerry Pournelle’s Chaos Manor blog. Distributism was one of those attempts at a “third way” between capitalism and socialism or communism. In England, it was put forth by two noted writers, both Catholic, G. K. Chesterton and Belloc. In America, it was associated with Dorothy Day and the Catholic Worker Movement.

My only previous exposure to Belloc was his alternate history essay “If Drouet’s Cart Had Stuck”. I got the vague impression that, like Chesterton, he longed for a return to the Middle Ages with the Catholic Church the predominant institution.

I still don’t know that much about Belloc, a very prolific writer. (You very well know some of his nursery rhymes and epigraphs without knowing it.) This short book, more of a pamphlet, is one of his books still discussed.

Distributism, of course, never caught on under that label though its tenet of decentralized economic power is still very much discussed. And, in this book, Belloc predicted it wouldn’t prevail. It’s a gloomy, concise bit of economic history which, despite some factors Belloc couldn’t see like massive immigration into western societies in the 20th century and automation, managed to be rather predictive.

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A History of the First World War in 100 Objects

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Review: A History of the First World War in 100 Objects, John Hughes-Wilson, 2014.History of the First World War in 100 Objects

A remarkably complete history of the war covering every major combat theatre – Europe, Asia, Africa, and the Middle East – from mining operations below ground to air combat and bombing, from under the sea to the Battle of Jutland. It covers weapons and war financing, logistics and espionage, home front politics and war production, mutinies, the soldiers’ life in combat and behind the trenches and on leave, and artists and the war.

The format is simple. Each chapter has a full-page picture of an object, an inset talking about it, and anywhere from one to six pages of text, often with additional, smaller photos, covering the subject the object represents.

The objects are not always what you expect. For instance, a “body density map” is shown for a chapter on Western Front casualties, a fullerphone (a scrambler for voice and Morse signals passed on a wire), Lieutenant Augustus Agar’s boat (used in a raid on the Bolshevik fleet for which he won “the mystery VC”), and a harpoon gun used by interred German sailors at Scapa Flow to supplement their meagre rations with birds. Continue reading →

The New Economics of Inequality and Redistribution

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Yes, it’s another econ book.

A retro review from March 1, 2013 …

(And, no, I didn’t pay for this one. It was an Amazon Vine title.)

Review: The New Economics of Inequality and Redistribution, Samuel Bowles, 2012.New Economics of Inequality

I came to this book as a layman who suspects that globalization, automation, and an increasing percentage of the population not having the innate intelligence for the jobs of the future will necessitate some sort of new economic order. This book really didn’t go very far in suggesting a new economic system, but it is worth a look.

Or, to be more precise, it’s worth a partial look if, like me, you are not a trained economist. I suspect few laymen will have the time, patience or money to follow up on the bibliographic suggestions to check up on Bowles’ arguments. Those laymen are also going to have to put up with a lot of equations. To be sure, they are simple algebra for the most part, but you can get lost in the thicket of variables. Bowles should have spelled out his variables instead of just designating them with place holding letters. An interested reader could probably just read the “conclusion” of each chapter and backtrack, if interested, to see Bowles’ evidence and math.

Still, there is some stuff of value.

First, Bowles is a behavioral economist meaning he relies on experiments to show how people really make economic decisions and not the classical theory of man as a utility maximizing animal. Second, while economic redistribution is thought of as a liberal or left-wing desire, Bowles does not fall into conventional policy notions of how to do that. There is, I think, material and arguments to vex and please stereotypical liberals and conservatives. Continue reading →

Antifragile

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A retro review from January 5, 2013.  This review copy came from Amazon’s Vine program.

Review: Anti-Fragile: Things That Gain from Disorder, Nassim Nicholas Taleb, 2012.Antifragile

This is not an investment guide.

This is not a fitness guide.

This is not a diet guide.

This is not a screed against the dismal science.

This is not a call for fundamental economic and political change.

This is not an autobiography.

This is, as Taleb himself has called it, a work of philosophy which touches on all of the above. I’d also call it a field guide to understanding important parts of the natural and social worlds. It finds much inspiration in the ancient texts of the Mediterranean. Taleb says “moderns have severe handicaps when it comes to wisdom”.

We rely, he argues, too much on the illusion of knowledge, too much on false precision, ignorantly intervene, centralize our decisions, try futilely to avoid random risk. Taleb practices “naturalistic risk management” – ways of minimizing bad risk and benefiting from the “Extended Disorder Family”: uncertainty, variability, imperfect knowledge, chaos, volatility, time, the unknown, randomness, error, and stressors”. Weak things are hurt by disorder; robust things are unchanged, and, as the title indicates, Taleb’s coinage “antifragile” designates those things benefitting from disorder. Continue reading →

The Two Narratives of Political Economy

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Every once in a while I try to educate myself about the dismal science.

A retro review from June 14, 2012 …

Review: The Two Narratives of Political Economy, eds. Nicholas Capaldi and Gordon Lloyd, 2010.Two Narratives of Political Economy

The two narratives are the arguments for liberty and the argument for equality, the two ultimate sources for most of our political debates these days, our discussions over what government should and can do. This book traces the main points of that argument for roughly two hundred years. What causes enslavement, what causes inequality, what can eliminate either, and whether it is possible to solve both problems at once – if they are problems, is what this book covers.

While economics was already pretending to be a science and using some very simple equations, these selections all come from a time when economics was not pretending to be a values neutral description of the world separate from politics, just another impartial tool for government to pick up as needed. These authors all have a political picture of the world they wish to preserve or create, an idea of the best life for man.

It’s evident fairly early on Capaldi’s and Lloyd’s sympathies are with the liberty narrative. They both are affiliated with the Liberty Fund. Some exclamation marks get thrown around in the introduction to the equality narratives, and, at one point, they openly state the book is weighted towards the liberty narrative since the equality narrative is the default one of the modern world, an observation hard to argue with. Continue reading →