India's creamy layer

Off to Delhi tomorrow for a few days to launch a report on the impact of mobiles in India. As homework this time I read Edward Luce's book 'In Spite of the Gods' which seemed to this non-expert on the country a very good overview of the economy and how the politics work. One of his big themes is that it's only the 'creamy layer', a wonderful Indian English phrase for the elite, which has benefited massively from the reforms and the amazing growth of the country, while the great mass of the Indian people have not. I thought his explanation of how caste-identity politics prevented democratic votes from spreading the benefits of growth was masterly. The theme certainly fits with our mobiles report (at www.vodafone.com/publicpolicyseries from Tuesday), which points to the need for more effective reform if the benefits of communications are to be shared outside the creamy layer. Anyway, my India reading isn't very extensive. I enjoyed William Dalrymple's City of Djinns, and Amartya Sen's The Argumentative Indian. I'd be glad of other recommendations on the economy.

George Orwell on money, and the lack of it

One of many fascinating aspects of the Credit Crunch is the way it puts the spotlight on money as a social institution. Madoff defrauded many close social contacts; bankers who lunched together or golfed together frequently don't trust each other enough to lend in the interbank market any more. But there are wider social aspects too, which were brought to mind by a George Orwell essay in a clever new Penguin title called Books v Cigarettes (clever because £4.99 for a slender volume with a fab retro cover which book lovers find irresistible when stacked by the till, as well as clever because of the selection of essays). Orwell wrote: “There never was, I suppose, in the history of the world a time when the sheer vulgar fatness of wealth, without any kind of aristocratic elegance to redeem it, was so obtrusive …the worship of money was entirely unreflecting and untroubled by any pang of conscience.” He was writing of his pre-first world war prep school, but those words seemed apt for the vulgarity of the financial markets and the oligarch money swilling around London and the grotesque salaries and bonuses top executives have been paying themselves. The essay speaks of the social (and psychological) chasms created by the centrality of money as a measure of value, in particular the way that ordinary boys like himself were despised by those from wealthy families, which is what made the parallel interesting. It has certainly been remarked that 'little people' with little money – ie. most taxpayers – are paying for the clean-up operation; what the social and political consequences of that will be are less clear, although I confidently predict one will be the end of exec bonuses and disproportionate salaries. Orwell notes that the inequality of the post-W1 Gilded Age was just as extreme as the pre-war type he suffered at school, but much less confident, more knowing and defensive. We may yet get the defensive phase of our own crisis but wise organisations will move straight to a restoration of non-monetary values and rewards. As a postscript, I wonder what other past writers, less well known than Orwell perhaps, are waiting to be rediscovered for the light they can shed on our situation? Suggestions anybody?

Martin Wolf scares me on Global Finance

Two long train rides in a day (Trowbridge and back) gave me chance to finish reading Martin Wolf's new book Fixing Global Finance, as I'm reviewing it for the Independent later in the month. To begin with I wondered if he hadn't got the timing absolutely wrong as he'd obviously finished the book before the sky fell in on the global financial markets. It's about global current account imbalances and exchange rates rather than imploding banks and frozen capital markets, and doesn't make reference to The Crunch. As I read on, I began to think that the institutional and personal drama in the news every day is distracting us from the underlying issues about the ordering of a globalized economy, including its geopolitics, which are Martin's focus. And very worrying those issues are, too. I won't pre-empt my review by saying more, but I'd certainly recommend reading the book. Having said that, it tested my knowledge on international finance, never one of my strengths. I've always believed economics makes a huge contribution in this field simply by pointing out that things which add up will add up (it's called balance of payments for a reason), but still sometimes have to think for a moment about the counterparts to various imbalances. I also remember a conversation with a former member of the Monetary Policy Committee who was being kind about a mistake I made by saying, not to worry, they could never remember which way up exchange rates went either. I think it was a joke, but couldn't be completely sure. And of course as well as the intellectual books, I can't wait for the political, official and banking memoirs of this period to be published. What fun it will be triangulating all the blow-by-blow accounts.

The Bottom Billion

Paul Collier's marvellous book about poverty and economic development is just out as an OUP paperback, I noticed in the Sunday papers. Highly commended. No quick fixes, very realistic and sober, and extremely readable. Both my husband and son No. 1 read and enjoyed this one.

What can Daniel Bell teach us about capitalism?

Most Sundays I meet a couple of friends for a mini-philosophical salon (ok, a drink and chat), and last week Richard the Philosopher of Vagueness in Education (yes really!) asked if he could borrow Daniel Bell's 'The Coming of Post Industrial Society' from me.
I first read this as a student in the late 1970s & put it out of my mind until I was being interviewed by a nasty neocon columnist in the US about one of my books, Paradoxes of Prosperity. What was I saying, the nasty neocon asked, that Daniel Bell hadn't said better and 30 years earlier? When I recovered from the mauling, it was time to re-read the book, which did indeed turn out to be astonishingly prescient. Bell had underestimated two things about modern capitalism: the scale and scope of the organisational and social change being driven by new technologies; and globalisation, the way the reshaping of capitalism would cross borders. Still, it remains an impressive book, and one of its key points – the tension between technocratic decision-making by experts in a complex society and the pressures for ever more democracy and populism – is spot on.
Anyway, I tracked down the book on my shelves for Richard the Philosopher but decided I need to read it again in preparation for my next book. As his birthday's coming up I thought I might buy it for him, and found it's only available used, as are the other Daniel Bell titles I hunted for. I've ordered both Post Industrial Society and the Cultural Contradictions of Capitalism (from O'Donoghue Books in Hay on Wye, via Abe – Sean O'Donoghue is a specialist social science bookseller), so if you're reading Richard the Philosopher, you'll have the book soon. But what a surprise to find Bell out of print. Even though those of a neocon persuasion obviously still love him, for me he's an interesting thinker full of insight about capitalism. Don't we need a bit of that these days?