A column on vox by Matthew Luzzetti and Lee Ohanian celebrates the 75th anniversary of the publication of The General Theory of Employment, Interest and Money. They argue that the reason it proved such an influential book was in large part because it was published in the right place at the right time, for three main reasons:

“Macroeconomic time series from the 1940s through the 1960s conformed
qualitatively to patterns predicted by the General Theory
(even though the driving forces behind the US economy at this time may
have been very different than the forces stressed by the Keynesian
model);

Simultaneous equation econometric developments made around this time
elevated the Keynesian model to a quantitative enterprise;

And perhaps most important, the General Theory was
published during the Great Depression when there was enormous demand for
new ideas to understand chronic depression.”

I remember, the one time I tried to read it cover to cover, struggling to make sense of the book. Although it's written in beautifully clear English, I could only speak the language of the neoclassical synthesis of the 1970s, and the concepts were alien. Looking back at it now – although not re-reading it cover to cover – the striking thing is how much of its time the book is. The international trade sector and global capital markets are absent. So although the vox column concludes, rightly, that the concept of aggregate demand management will always be with us now, at least in times of recession, I'm sceptical about the modern relevance of The General Theory.

However, as economists need to become much better educated about the intellectual history of their own discipline, that's no excuse for not reading it if you haven't already.

The news of Daniel Bell's death this past week sent me back to his books, two of which – The Coming of Post-Industrial Society and The Cultural Contradictions of Capitalism – I re-read recently for my own forthcoming book, The Economics of Enough.

Previously on this blog I've noted the prescience of Bell's argument, in Post-Industrial Society, that the main political faultline of modern times would be the tensions between the technocratic management of a complex economy and the ever-growing pressures for populist democracy.

In The Economics of Enough, it's the Cultural Contradictions that plays a larger role. Bell, usually thought of as a right-wing commentator, writes in a 1978 foreword:

“….I am a socialist in economics. For me, socialism is not statism, or the collective ownership of the means of production. It is a judgment on the priorities of economic policy. It is for this reason that in this realm the community takes precedence over the individual in the values that legitimate economic policy.”

He goes on to argue for a minimum income, adequate health care and security of employment. As the Guardian's obituary put it: “He is best remembered as the author of The End of Ideology (1960), and
as one of the last of the New York intellectuals who travelled the
distance from the leftism of the 1930s to the neoconservatism of the
1970s-80s and the uncertain middle ground beyond.”

The thread I pulled out of the book this time concerns the tensions between three different sets of values or priorities in capitalism: individualism and self-realisation; equality or fairness; and efficiency and growth. There are trade-offs and in fact only two of the three can be policy targets at any one time. Bell suggests the focus in modern economies on growth and individualism means a sacrifice on the equality front, a lack which was formerly addressed by the Protestant work ethic. Without an external moral imperative containing behaviour, he suggests, the growing inequality in society would at some stage become intolerable. Again, how prescient that looks now. This 'trilemma' is a source of constant dynamics in a capitalist economy.

For more about how I link this to our current situation and policy prescriptions, you'll have to read the Overview and Chapter 7 of my book – it can now be pre-ordered from Amazon UK or other retailers!

Back to Bell – there's no shortage of obits. I like his self-description in this one from the Boston Globe: “I specialize in generalizations.” Excellent ones also in Slate and The New York Times.

It must be seasonal: there are lots of new books of interest just out, and lots of reviews.

The first batch on the BP oil spill in the Gulf of Mexico are out. Blowout in the Gulf by William Freudenberg and Robert Gramling (MIT Press) and In Too Deep by Stanley Reed and Alison Fitzgerald (John Wiley). There's also of course the official report from the National Commission on the BP Deepwater Horizon Spill, Deep Water: The Gulf Oil Disaster and the Future of Offshore Drilling. The latter two are reviewed by Ed Crooks in the Financial Times. He says they reach the same conclusion – that deep water drilling will be needed – via different analyses. The blurb for the Freudenberg and Gramling book says, interestingly: “They note that—both in the Gulf of Mexico and
elsewhere—we have been getting into increasingly dangerous waters over
recent decades, with some in the industry cutting corners and with most
federal regulators not even noticing. In the process, the actual owners
of the oil—American taxpayers—have come to receive a lower fraction of
the income from the oil than in almost any other nation on earth.”

The political and social implications of the internet are another prominent current theme. Anybody interested in this subject can't have failed to notice the widely-reviewed book by Evgeny Morozov, The Net Delusion: How Not to Liberate the World. The political impact of Twitter, Facebook etc have been a big subject of discussion – not least on Twitter and Facebook – during the recent events in Tunisia and Egypt. Malcolm Gladwell caused online outrage by claiming in an essay (Small Change: Why the Revolution Will Not Be Tweeted) that social networks weren't changing anything. Morozov thinks things are changing but isn't optimistic about the outcomes. I haven't yet read the book – there are tons of reviews already though, including the FT and Guardian, Charlie Beckett's excellent blog, and The Economist.

Alongside The Net Delusion there are two other sceptical to pessimistic analyses: Sherry Turkle's Alone Together: Why We Expect More from Technology and Less From Each Other, and a volume edited by John Brockman, Is The Internet Changing the Way You Think. They're covered in the same FT review. This is a burgeoning literature.

Other titles I picked up in my morning's reading were: Consumptionomics: Asia's Role in Reshaping Capitalism and Saving the Planet by Chandran Nair (why Chinese consumers shouldn't aspire to consumer goods as the economy develops) (NB publishers – that's enough 'somethingonomics' titles, thanks); The Future of Power by Joseph Nye; How To Run The World by Parag Khanna; and – completely different – Edgelands: Journeys Into England's True Wilderness by Paul Farley and Michael Symmons Roberts.

It's been drawn to my attention (by @clarityeconomic) that the US government's Financial Crisis Inquiry Report is now available as a free pdf or can be ordered as a physical copy. As Phil says, the US does these big investigations rather well. Even more interestingly, the Commissioners disagreed amongst themselves, and so there is a dissenting minority voice as well. Should be an interesting read.

Last night was one for collapsing on the sofa in front of the TV, and I watched The Human Planet and an archive episode of the 1973 series by Jacob Bronowski, The Ascent of Man. It was serendipity city. The former, a gorgeous series, was looking at the Arctic and the interplay between environment – now changing – and human societies in the region. I turned from its vibrant HD images of Norwegian reindeer herders to the Bronowski programme – which also featured reindeer herding. His theme in this episode was nomadism giving way to settled agriculture. Which just happened to have been part of the territory covered by the sections of Ian Morris's Why the West Rules for Now, my current reading.

It reminded me just how terrific the Bronowski book of the series was – for that was how I came to it. The show passed me by but when I caught up with the book (also published in 1973) a little later, I was bowled over. It was a formative read for me, and I remember curling up in my favourite reading spot, on the floor by the window in our northern terraced house, devouring the book – and at the same time trying to make it last as long as possible. Both the DVD and the book (2nd hand eg from Amazon) are still available!