Gordon Brown on the Financial Crisis

Our former PM's reflections on how well he handled the crisis will be out in November, according to publisher Simon and Schuster (here's the Reuters report).  I've chatted to a few Treasury and Bank of England officials about those events, and the full insider's tale of the period will be fascinating. But will Gordon Brown's book be the one? I doubt it.

Holiday reading pile

The Enlightened Economist is due to go on holiday tomorrow morning for a couple of weeks. Here's the pile of books I've assembled to see me through the first part, but with a long flight to San Francisco and a lot of lounging around planned, I'd welcome recommendations for book stores either in San Francisco or Carmel. This is a classic holiday mix – light non-fiction plus detective novels/thrillers. Regular readers will know my theory about economists and detective fiction.

Publishers, property and words

The weekend papers brought some interesting news about the world of e-books. One article, in the Guardian, reported that 'super agent' Andrew Wylie has moved into direct digital publishing of his authors – only to have his new venture Odyssey Editions denounced by Random House and Macmillan. Odyssey will sell digital editions of modern classics for the Kindle. Random House sent a legal letter to Amazon and cut off business with the Wylie Agency. It reckons it has the rights to the digital property.

Meanwhile, the Financial Times the same day reported on agreements between some publishers, including Bloomsbury, and UK libraries. For a fee of 0.1 pence per head of population, a library can offer its customers free access to e-books published under Bloomsbury's Public Library Online project, which has several publishers now signed up. Similar library subscriptions are already in place for some reference books including the Oxford English Dictionary Online. However, other UK publishers have sent off a letter of complaint to the Department of Media, Culture and Sport. (I love the trans-Atlantic difference – we send for our bureaucrats, the Americans for their lawyers.)

As a former competition regulator, I find it hard to feel sympathy with the mega-merged titans of the publishing world, no matter how much they are shocked – shocked! – by the prospect of new, technology-enabled entry into their business. I hope the DoJ is reading the letter to Amazon carefully. OK, neither Amazon nor even the Wylie Agency lacks market power of their own. But the sad reality for powerful incumbents is that the technology of e-books and digital reading devices will and should cut their profits. That's how new technologies benefit customers – more choice and lower prices.

However, the technology also raises some fascinating questions about what constitutes property. What is it that you buy when you buy a book? Libraries, sharing, and second hand book shops have long undermined the purity of the principle that the originating publisher has absolute control over the number of people entitled to read the words in a book. But before digital readers, the friction of physically moving the book from one reader to another was enough to limit the danger of large-scale loss of control. Now the question of what property is it, exactly, that's being traded is at the foreground. There will be the same mania over DRM and copyright-protection as there has been with music, and no doubt big publishers will make the same arguments as big music companies.

But the truth is that intellectual property isn't the same as physical property. Property is a more mysterious notion than we believe, and is maintained by social conventions. James Boyle sets this out brilliantly in his book The Public Domain. When I buy a drink in a pub, the convention is that I've bought the liquid contents but not the glass – unless it comes in a plastic beaker, in which case I've bought that too. These rules aren't set out above the bar but maintained by custom and practice. So when I buy a book, am I buying the physical book, and is it therefore like buying a coat, which I can freely sell on or give away later? Or am I buying the words and ideas for a rental period, with no rights to pass them on? It's always been the former, but publishers would now like to claim it's the latter.

My money is on the ideas breaking free in the end, but there's bound to be a lot of work for lawyers first.

Unpopular economics

The day after I posted about pop economics books, I spotted a snippet in the Guardian Review about a new book on what's awful about economics. It's Economyths by David Orrell. Alongside the boom in pop economics publishing, there's an echoing wave of books about the failings of the subject. Another recent entrant is Yves Smith's Econned and apparently John Quiggin has a book called Zombie Economics coming out. It's only fair to point out that pop economics has its counterpart.

Like the pro-economics genre, this counterpart 'anti' genre is long-standing and has the good, the bad and the ugly. Under the 'good' heading I'd count Paul Ormerod's Butterfly Economics and The Death of Economics. He is a terrific economist who is heterodox rather than mainstream – but nevertheless a believer in modelling and the application of the scientific method to the economy. Also anything by Deirdre McCloskey but especially How to be Human, Though an Economist – a new one, Bourgeois Dignity: Why Economics Can't Explain the Modern World, is due out in the Fall and will be a must-read.  And Nassim Taleb's The Black Swan – Taleb just hates economics, full stop, but although he can't see any merits in us, it doesn't stop us seeing merit in his approach to probability.

In a somewhat different category but also worthy of respect are books which worry about the cultural and social effects of market economies – such as John Ruskin's Unto This Last, Kary Polanyi's The Great Transformation, or more recently Richard Sennett's work.

I haven't read any of these new books so can't comment on which category
they fall into. But there's a lot of 'bad' anti-economics around, bad because it almost always attacks a caricature version of the subject.  I'd list here titles like some of the books by Robert Heilbroner and George Brockway's The End of Economic Man.

As for the 'ugly', here I put heterodox economists with a chip on their shoulder and a writing style corrupted by over-exposure to critical theory and sociology. My least favourite ever is Philip Mirowski's Machine Dreams, closely followed by Tony Lawson's Economics and Reality.

So economists should read the first group, dip into the second to see what myths about economics are currently doing the rounds, and ignore the third.

Pop Economics

This is definitely an era of popular economics books. I've recently been invited to take part in two discussions of the phenomenon: a whole symposium on economics made fun, at Erasmus University in Rotterdam in December, and at the Annual Meetings of the American Economics Association a month later.

Needless to say, I'd put my own books at the top of any pop-econ reading list. There's a revised edition of The Soulful Science and my earlier books (The Weightless World and Sex, Drugs and Economics) can be found on my website.

Ahead of me in the bestseller stakes, and by quite some distance, are of course Freakonomics and Superfreakonomics by Levitt and Dubner (in my view the latter book is much better), and by the wonderful Tim Harford The Undercover Economist and its sequel The Logic of Life. Other titles in the general category would include Tyler Cowen's Discover Your Inner Economist, Steve Landsburg's More Sex is Safer Sex, and Robert Frank's Economic Naturalist. Somewhat different are the books through which an economist makes accessible a specialist area of work. Robert Shiller's Irrational Exuberance is a prime example.

Which leads on naturally to the behavioural economics sub-genre, currently growing fast and delighting everybody in the policy world who thinks this approach gives them the answer to getting the pesky people to respond to policies as they're supposed to.  Leaders in this field are Dan Ariely's Predictably Irrational and Thaler and Sunstein's Nudge.

The financial crisis has brought its own literature. From the economists come Stephen King's Losing Control, Philippe Legrain's Aftershock, Raghuram Rajan's Faultlines, newest addition Capitalism 4.0 by Anatole Kaletsky and, at a slightly aslant angle, John Kay's Obliquity.

There have always been popularisers of course. Keynes was prominent amongst them, and J K Galbraith. My favourite classic is Thomas Schelling's Micromotives and Macrobehaviour. But given the growing demand for understanding in a time of uncertainty, economists are definitely expanding the supply of accessible economics books now.

Other suggestions for the list are welcome!