Looking at other people's libraries is one of life's simple pleasures. Over the holiday weekend our family visited Sissinghurst Castle, home in the 1930s of diplomat and politician Harold Nicolson and writer Vita Sackville-West. The glory of the place is its garden, but I loved the library, which had the authentic smell of old paper and bookbindings.
Some 30 years or so ago I dipped a bit into Nicolson's Diaries. He was, like Keynes, a critic of the Versailles Treaty. Later he had a career as an MP and (in the 40s) a BBC Governor. I've just ordered the diaries to remind myself – the political diary genre, ranging from Richard Crossman through Alan Clark to Chris Mullin is extremely varied of course, but for the most part an interesting read if only for the insight into the distinctive way of thinking a life in politics imposes on people.
The most envy-inducing library I ever visited, though, was that belonging to Mario Vargas Llosa in Madrid. I went to interview him for a BBC Radio 4 Analysis on globalisation. (I can't link to it at the moment as the volume of Royal Wedding traffic on the BBC website is preventing it from responding to any other requests!) It was an old building near the palace. The room had a mezzanine, with his desk on the gallery and sofas around a low table on the lower level. And books. Lots of. It was hard to concentrate on the interview.
Aerotropolis: The Way We'll Live Next by John Kasarda and Greg Lindsay is a fascinating book; and although I suspect readers will either absolutely hate its thesis or be absolutely intrigued by it, either way it demands a thoughtful reaction.
The underlying premise is undeniable: cities are fundamentally shaped by transportation. The oldest are organised around water, a navigable river or port, Victorian cities were expanded and shaped by train lines, and since the early 20th century automobiles and major road networks redrew domestic trade and commuting routes, and enabled the spread of suburbs – especially in the US with its sprawling 'Edge Cities'.
Aerotropolis argues that in the age of globalisation, air travel has already altered choices about work and home locations and about business location – and will only continue to do so. The question is whether urban authorities go about dealing with this in a haphazard way – as in London, where finding agreement about where and how to expand capacity seems impossible – or in a planned way with a sufficiently large international airport connected to residential areas by convenient public transport and with sensible mixed-use zoning nearby.
The book has many interesting examples – mainly from the US but other countries too – of both approaches. I'm convinced that the haphazard approach, hostage to the pious pretense of some environmentalists that we're going to stop flying and the NIMBY-ism of those living near airports (no matter how much they fly), is inferior.
One reason is, in fact, that the environmental impact of airports can be much better managed if realism reigns. Better by far to embrace the airport and its benefits, and ensure that the public transport links are built, for example. Ed Glaeser's recent book, Triumph of the City, also sets out the possibly surprising environmental benefits of a wholehearted embrace of urban life.
The second reason is that the economic benefits of physical connectivity are often, I think, underestimated. The productivity effects of information and communication technologies emerged first and most strongly in distribution and logistics – FedEx and UPS, WalMart and Tesco, clothing retailers such as Zara and their Chinese suppliers are all characterised by their ultra-efficient supply and logistics chains. The economic development officer in Memphis, which reinvented itself as an aerotropolis to house FedEx, makes this point in the book. At the time, he says, other cities looked down on 'distribution' as a low value, low-paying alternative to the vanishing traditional industries. But over time, being a superb hub for distribution – and also for globe-trotting executives – has brought in high value activities. The climb is reflected in the job titles, he says: from 'warehouse manager' to 'assistant manager of logistics' to 'senior vice president, global supply chain'. (pp81-82)
Many people have also certainly made the mistake of assuming that the technologies substitute for face-to-face contact, when in fact they complement each other. As Aerotropolis notes, the highest-tech industries clock up the most executive travel. “Trillions of connections yield billions aloft. The more wired we are, the more we fly. …. At the current rate, the Internet will render business travel obsolete at about the same time it replaces paper.” (p113)
I'm not sure how far reason will ever reign in urban planning, including the planning of transport. Passions run high and property prices are at stake. The romanticism of environmentalism conflicts with the reality of profitable global supply chains and global careers. I for one enjoyed the vision of the gleaming, bustling aerotropolis. It will all be a bit too J.G. Ballard for some, but I write as one who lives close to Heathrow and rather enjoys the experience of battling with London Transport and BAA security to have a leisurely coffee in a crowded and over-retailed departure lounge while watching all the world's people go by.
One odd thing, and it does get in the way, is the authorship. Journalist Greg Lindsay has done the writing, and the book is well-written with vivid reportage. Professor (and uber-consultant) John Kasarda is, however, billed as the author because his ideas have inspired the book. It got me surprisingly confused about the status of the authorial voice. A minor complaint. This is a fascinating book stuffed full of information.
Every
cloud has a silver lining and one positive offshoot from the tornado that was
the financial crisis has been a spurt of books aiming to explain economics to
non-economists. As
its title sets out, this latest entry, 30 Second Economics edited by Donald Marron, aims to explain the 50 most
thought-provoking economic theories in just half a minute.
Publishers
clearly have a firm idea of what the public wants: 50 ideas; each one easily and quickly digestible; and illustrated with snappy quotes, graphs and potted
biographies. 30 Second brings some new elements: a “3-second crash”
that explains each idea in around 20 words (or around a Twitter-length 140 characters)
and a “3-minute boom” for those who want to delve deeper.
The
50 ideas are categorised within eight groups (schools of thought, economic
systems, economic cycles, growth, global trade, choice, tax and spend, and
markets), which makes it easier for the reader to navigate. Each
entry has a double-page spread with text on one side that also includes related
theories and key thinkers, and an imaginative infographic to hammer home the
point on the facing page.
While
this makes the book a little formulaic, it makes it easier to read than other
similar books that have more varied structure but which take longer to cover a
given subject. You pays your money…
Its
choice of potted biographies is similar to that of other books in the same genre (von
Hayek, Friedman, Keynes, Malthus, Ricardo, Becker, Marshall and Smith). However, the
writers (there are four – see below) display a sense of humour that some other
books in the same vein often lack. In
the biography of Malthus, for example, the book notes that while history has
been harsh on his theories on population, the current emphasis of economic
sustainability means the “bad boy of economics may yet have the last laugh.”
Given
that there are more than 50 economic ideas to choose from, the biggest challenge for any book
of this nature is deciding which concepts to exclude. 30 Second includes the “impossible trinity” or trilemma
that governments face is being unable to control exchange rates, capital flows
and monetary policy simultaneously that others have not selected. On
the other hand it does not include discussion of
trickle-down economics that is becoming a key part of the debate as
economies recover.
But
these are minor quibbles. The book is clearly written and presented and
includes the main concepts that non-economists need to know in the current environment.
On
a presentational note, I am not sure this is a book that needed to come out in
hardback. It is most a likely a book that users will want to keep in their
briefcase, by their laptop or even in their coat pocket so paperback would seem
the better medium.
I
also feel that the writers – the people who actually did the tight writing
needed for this book – should have received more credit. So for the record, the
contributors (who all hail from Sussex University) are Adam Fishwick,
Christakis Georgiou, Katie Huston and Aurélie Maréchal.
The revival of this genre of easy-to-read books
on economics is welcome. On the other hand, perhaps when new volumes are no
longer entering the market, it will be a sign that the recovery is well
established.
Tim Wu's book, The Master Switch, was favourably reviewed here by Rory Cellan-Jones (my husband, & the BBC's technology correspondent). I read it myself over the Easter weekend and agree with Rory's view that it's a superbly well-told history of the information industries in the US.
As a former competition regulator, however, it was the competition analysis of these industries that jumped out at me – with their economies of scale, network effects, tendency to vertical integration and two-sided markets. Although he describes the recurrent Schumpeterian cycle of technological disruption, Wu's prescription is strict anti-trust enforcement against both horizontal and vertical combinations, and this is the perspective he brings to the current net neutrality debate. I think he understates the complexities of applying competition policy in these industries, but that's fair enough because there isn't a settled body of economic theory and evidence anyway.
Also interesting, however, is the link Wu draws between competition and free speech, or rather the diversity of perspectives and debate essential for civic engagement in a healthy democracy, and for artistic creativity in a modern economy. A 'discriminatory' network, he notes, can profoundly alter political debate, and he gives examples from each of his historical cycles. A concentrated media industry narrows the national conversation (p183). He argues for the concept of 'common carriage' as the information industries' counterpart to the 1st Amendment guarantee of free speech. (p57)
Finally, almost en passant, Wu takes a swipe at the extreme version of copyright protection some in the 'content' industries now advocate. “In an age that has radically commoditized content, it is as well to remember that Homer had no expectation of royalties.” (p37)
So it's certainly a thought-provoking book – some people will dispute his arguments. But whatever your perspective, an important book and a must-read for all interested in the content industries, net neutrality and all that jazz.
A comment in the broadly positive review that caught my eye was this:
“But
incredible is the book’s suggestion that only perhaps four people at
AIG knew of the time bomb in FP’s derivatives that covered complex
mortgage bonds.”
It seems to me not at all surprising that nobody either knew or understood the nature and extent of the company's risks, or indeed really understood the business at all. Surely it is all too clear that in all the troubled banks, and in every corporate horror story of recent times, neither the executives nor, for sure, the non-executives, had a clue about the business for which they were formally responsible.
These governance failures have been too little discussed in the aftermath of the crisis. Ensuring an adequate flow of information to those with ultimate responsibility is the central challenge of governance, especially in large and complex organisations. It is a mark of a well run organisation that much energy goes into addressing it and challenging executive assumptions.
However, the boards of banks were populated by chaps who knew each other on the boardroom circuit, thought each other worth paying 'in the top quartile' of pay and bonuses, and all too often understood nothing about derivatives or accountancy policy or risk assessment.
Nothing, but nothing, as far as I'm aware, has been done to tackle the demonstrably weak governance of the banking sector. Time for some radical thoughts about it. Supervisory boards to represent the taxpayer interest in the quasi-nationalised banks? New regulatory requirements on the qualifications of non-executives to be appointed? Annual parliamentary appearances by the main bank chairmen and chief executives? I don't know what the right structure is, but do know that we don't yet have it.
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