I'm just back from a conference with many very senior politicians, officials and journalists amongst the participants. It's heartwarming to realise how many of them are serious readers. This is something they can only reveal in the privacy of a conference conducted under the Chatham House rule giving them anonymity, so anti-intellectual are our populist politics and press.

Just one leading politician cited – in the course of two brief interventions – the following books and authors: Antonio Gramsci (Prison Notebooks was the specific reference, I think), Christopher Lasch's The Revolt of the Elites and the Betrayal of Democracy, Michael Harrington, Sunstein and Thaler's Nudge, Sayiyd Qutb (and the speaker gave every appearance of having read some of his works), and Tariq Ramadan. Another politician strongly recommended Walter Russell Mead's God and Gold to me – I hadn't heard of it before.

Reinhardt and Rogoff's This Time Is Different was much-cited, and must count as one of the most influential books of the past 12 months. And a number of people were reading – or about to read – Barry Eichengreen's Exorbitant Privilege. Others were crossing Dambisa Moyo's latest, How the West Was Lost, on the back of a stinker of a review in this week's Economist, although it has been better reviewed elsewhere. The anonymity of its reviewers certainly assists frankness.

The latest Foreign Affairs carries a review by Timur Kuran of Ian Morris's Why The West Rules – For Now. The review focuses on organisational capabilities, and how these diverged between east and west in the late 18th century. I haven't yet read Morris's book, but am reminded by the review that I also need to add Timur Kuran's own book, Islam and Mammon, to my in-pile. It was glowingly recommended to me by Bob Shiller, who described it as one of the most important books he has read lately.

Macrowikinomics by Don Tapscott and Anthony Williams has been so widely reviewed and praised that it hardly needs another review, but I've read it so it's getting one. In the interests of product differentiation, I'll say little about the thesis as a whole, and concentrate on one specific section, about public value. I have a particular interest in this, having co-authored a (free, pdf or text) book, Public Value in Practice: Restoring the Ethos of Public Service, for the BBC Trust, as the Trustee with responsibility for steering public value tests of significant changes to BBC services. (In fact, I recently bumped into Andy Parfitt, the very cool head of Radio 1 and popular music, in a cafe, and he told me he was reading the public value book – what better recommendation could you need to read it too?)

Anyway, back to the general theme of Macrowikinomics. In case anybody is unaware, it continues where Wikinomics left off. Its theme was the beneficial impact of mass collaboration in business, and I enjoyed the many examples it gave of how successful companies were using information and communication technologies, and specifically social networks, to innovate. The new book gives more examples from business but turns specifically to larger-scale collaborations being undertaken by other kinds of institutions. The examples are health, higher education and research, climate change and the media, as well as the 'public square'.

I fundamentally agree with the key point that most of the knowledge anybody in any organisation needs will lie outside, rather than within, its boundaries. Macrowikinomics makes plenty of interesting points about its examples. Having said that, I found it less satisfying than its predecessor.

One reason is the purely stylistic – personally, I find the management guru style acceptable when applied to corporate stories and a bit tooth-grinding when applied in other contexts. The cliches stand out more. There's a lot of taking things to the next level and making ideas a reality – and what on earth does 'opening the kimono' mean? I'm sure it's meant to be a cliche but is new to me. We all have stylistic tics, even me, so this is a question of taste.

More substantively, Macrowikinomics skates over the complexities that inevitably arise when it comes to big institutions or policy matters. The authors overstate their claim that applying wiki principles will solve all problems. For example on higher education – where I agree with their fundamental point that mass production of graduates was fine for the mass production age and unsatisfactory now – they write as if students never used to skip lectures or work together. And they do not make the link between the exploratory learning they advocate and some very traditional educational theory (hello John Dewey!)

Having quibbled, there are lots of interesting examples and ideas in the book, and that goes for the section on the public sector too. One of the essential aspects of public value is the process of exploration and debate with the public, the procedural justice which Amartya Sen and Martha Nussbaum have emphasized as an aspect of meaningful human capability – see for example the essays in The Quality of Life (1993)).

The new technologies certainly make that process meaningful in new ways. The open data movement is incredibly valuable: the motivated crowd can discover things no bureaucrat would ever have time to do. The people can even generate their own data, and – as Steve Levitt noted in his recent talk at the American Economic Association meetings – data-generation via social networks is already playing into social science research. Tapscott and Williams vastly understate the risks to public sector organizations of opening up in this way – risks that essentially arise because of the inevitable dynamic between public sector and politics. After all, participation via social networks and online communities of interest could easily start to challenge the legitimacy of classic participation by voting in an election for people whose job is to take decisions on behalf of everyone. But this is certainly the right direction. I'd love to see some debate between public officials and politicians about how to address the challenges posed to each group by increasing openness and participation on specific issues.

So in sum, Macrowikinomics has loads of interesting suggestions and examples, and is definitely a worthwhile and not all that time-consuming read.

Why the World Economy Needs Another Financial Crash – a guest review by Phil Thornton of Clarity Economics

“Those drawing their incomes mainly from City (of London)
activities are relatively few. The devaluation of those claims is a necessary,
if insufficient condition for the quickening of real economic activity and
perhaps even the survival of the capitalist system.”

These words will ring true for many observers of the current
tussle between the UK Government and the big banks. But this was written in
1986 as the conclusion of a prescient article in the Financial Times
explaining why there needed to be a financial crash or a bout of inflation to
purge the system of its excesses. The author, Jan Toporowski, now Head of the Economics Department at the School of Oriental
and African Studies in London, got his wish a year later but also lost his City
job.

Now 25 years later it forms the title essay in a collection of his
subsequent writings on the danger inherent within a “financial era [where]
finance mostly finances finance”. The book, Why the World Economy Needs Another
Financial Crash (Anthem Press; 143pp; £22.95), is therefore not a focused
examination of the causes of, and solutions to the financial crisis, of which
there is a burgeoning bibliography. Instead it is a record of a journey of a
practitioner-turned-student of the era of financial deregulation that he
believes was primed to create an excess of debt that would need to be purged,
either in a controlled fashion or by a shock event that leaves the world with a
period of debt deflation.

His core focus is on the concept of financial inflation, which the
author describes as the “rise in value of the financial sector of the economy
in relation to the value of the rest.” At the heart of the book are two
chapters that form a critique of financial inflation. It is harmful, we are
told, because it changes the way the economy works, by inflating asset prices
and creating a false sense of prosperity until the cycle ends with asset
deflation that in turn can lead to debt deflation.

The book is divided into three sections. The first looks at the
history of modern finance, covering familiar themes such as the end of Bretton
Woods, the run of emerging market crises and the dominance of the Washington consensus
of economic policy but viewed against the backdrop of the battle between
economic liberals and Keynesians over how best to control global finance.

The second looks at the academic and professional culture behind
financial inflation and includes entertaining essays on the “mendacious
courtesy” of goodwill in corporate accounts, and on deleveraging as a conduit
of financial crises. They also include a pertinent pair of chapters looking at
the link between asset inflation and inequality and highlighting the awful
irony that the surge in house prices that made the rich richer encouraged poor
people to over-debt themselves to get on the ladder and fuel the growth in
subprime mortgages.

The third section brings the debate up to data with an analysis of
the causes of the current crisis. It also includes a Woody Allen-inspired
dictionary of “everything you need to know about the crisis but couldn’t find
out because experts were explaining it.”

The book is thoroughly grounded in economic history with references
to the 20th, 19th or even 17th and 18th centuries never far away and steeped
with references to the great economic thinkers. It also uses humour well,
describing financial innovations as being little use to those outside financial
markets “although this will be disputed by anyone who has used a credit card to
cut a cake”.

Ultimately the critique begs the question of what the author would
put in place to replace financial liberalism and so, as Gordon Brown once
heralded, to end the cycle of (financial) boom and bust. Toporowski looks at
the Basel proposals on capital requirements for banks but rejects them as
simply forcing businesses and households to use unregulated financial markets. He
says that a return to the credit controls of the 1950s might curb the credit
cycle but would not end the industrial business cycle, whose downward phase
would simply lead to renewed calls for another bout of credit expansion of
asset inflation. The opening 1986 essay argued that a bout of inflation was
needed to boost wages and prices and reduce the real value of debt. Given that
debts are stratospherically higher now, more extreme measures may be needed.

In case the reader is any doubt about the measures needed
Toporowski closes the book with the statement that what is needed is an
economic system that avoids both financial and industrial instability. “It is
time once more to consider socialism.”

It would have been nice – perhaps for geeks and economic
historians – to have been given details of the time of writing and the outlet
for each article to put the thinking in a context of its time. But that is a
small quibble in what is a timely and amusing contribution.

There are so many enticing new economics books coming out this spring that I couldn't fit it all into one post. I'll start the second installment with one I'm particularly looking forward to, The Triumph of the City by Edward Glaeser, published by Macmillan in March. I've had the privilege of working with Ed on projects in Glasgow (see New Wealth for Old Nations: Scotland's Economic Prospects) and Manchester (on the Manchester Independent Economic Review) so I know it will be a terrific book on urban economics and the impact of technological and structural change on cities' prospects.

From MIT Press there's a new title in the terrific Boston Review series, Government's Place in the Market by Eliot Spitzer. Also of interest are Redesigning Leadership by John Maeda; Reforming U.S. Financial Markets: Reflections Before and Beyond Dodd-Frank by Randall Kroszner and Robert Shiller; and – no doubt one of many to come on this subject – Blowout in the Gulf: The BP Oil Spill Disaster and the Future of
Energy in America by William Freudenberg and Robert Gramling. Given my techno-interests, I'm also intrigued by The Secret War Between Downloading and Uploading: Tales of the Computer as Culture Machine by Peter Lunenfeld.

Cambridge University Press has some intriguing books on offer too. I'd pick out a three-volume Economic History of Modern Britain by John Clapham, a reprint of a 1930 book. The catalogues says: “The first volume of John Harold Clapham's remarkable and original work
begins with a comprehensive description of Britain on the eve of the
Railway Age, covering topics such as the organisation of agriculture,
industry and commerce. The second volume covers the period of the Great
Exhibition and the development of the production of cheap mass-produced
steel; the railway system continued to grow and the fortunes of canals
and decline. With the third volume, Professor Clapham completes the
work, bringing the story down to 1929.” My interest is also aroused by  Individuals and Identity in Economics by John B Davis, looking at the evolving way the individual is treated in the subject, covering for example developments in neuroeconomics.

From Polity Press in March comes The New Scramble for Africa by Padraig Carmody, another welcome study about inward investment in the continent's natural resources. Yale University Press is offering What's Next: Unconventional Wisdom on the Future of the World Economy by David Hale and Lyric Hughes Hale; and The Theory That Would Not Die (about Bayes' Theorem) by Sharon Bertsch McGrayne.

These are the ones I've picked up on so far. If any publishers think I've left out prospects of interest to the general reader of economics books, do let me know and I can post a Part 3.