For all who missed it earlier, which included me, here's an excellent round-up of the best business books of last year. I've read one of these, Benjamin Roth's Depression Diary. I have Liaquat Ahmed's Lords of Finance in the pile, and also Reinhart and Rogoff's This Time 's Different. It's been on everyone's 'best of…' lists. I like the look of this book on American Public Media's list about music business success story Merge Records,  Our Noise. I love it that so many punks have succeeded in business.

Anyway, those of us who like to read business and economics books have had a rich crop this past year. Looking at the economy, 2010 will bring just as good a harvest for readers.

In a continuation of her service to authors of following the detail of the legal settlement, and letting the rest of us know what it means, Gill Spraggs has completed a second paper, which is on: “the outrageous treatment of so-called 'inserts'.”  She has also revised the early paragraphs of her 'survival aid', on the same website, for those who have the earlier version.

My thanks to Gill for continuing to keep me, and readers of The Enlightened Economist, updated on this.
 

The superb economic historian Harold James has a column of this title in today's Financial Times, based on his most recent book, The Creation and Destruction of Value. I must confess that despite being a big fan of Professor James, including his previous book, The End of Globalization, I haven't yet read the latest one (which was published in September). The column makes me feel sure I'd agree with him. He writes:

” ….[F]inding a way out of the damage was very tough in the 1930s and is
just as hard now. Unlike in the case of a 1929-type challenge, there
are no obvious macro-economic answers to financial distress. The
answers lie in the slow, painful cleaning up of balance sheets; and in
designing an incentive system that compels banks to operate less
dangerously. A 1931-type event requires micro-economic
restructuring, not macro-economic stimulus and liquidity provision. It
cannot be imposed from above by an all-wise planner but requires many
businesses and individuals to change behaviour.”

This point is exactly what puzzles me about the optimists who seen sprouting green shoots in recent economic data; macro stability is only the precondition for the reconstructive surgery needed now.

A second point in the column is that the recent era of financial globalisation suited small and nimble trading states such as Singapore and Ireland, whereas the dawning age of retrenchment severely limits their options and will be an age of big states. The BRICs, to be precise, not the old G7.

Reading about the economy of the 1930s is essential for understanding what's happening now. I shall order Prof James's book at once.

What better way to start the New Year than with a taster of a forthcoming book by Daron Acemoglu and James Robinson about the age-old question in economics: why do some economies grow and others not? This article in Esquire majors on the links between democracy and economic performance  – and no doubt oversimplifies the argument in the book. Here's the heart of it, however:

“People need incentives to invest and prosper; they need to know that
if they work hard, they can make money and actually keep that money.
And the key to ensuring those incentives is sound institutions — the
rule of law and security and a governing system that offers
opportunities to achieve and innovate. That's what determines the haves
from the have-nots — not geography or weather or technology or disease
or ethnicity.

Put simply: Fix incentives and you will fix poverty. And if you wish to fix institutions, you have to fix governments.”

It will certainly be one to look forward to. The next post will flag up some other forthcoming titles, some of which look really terrific.