Author Archives: Diane Coyle

Festive reading?

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It was a huge pleasure to take the two Enlightened Economist Prize winners, Ed Conway and Paul Johnson, to a celebratory lunch yesterday. The conversation turned to other things we’ve read and – importantly at this season – what we’d like to read. Ed and I have both read the proofs of Brett Christophers’ *excellent* February 2024 book on energy markets and the challenges of investing in renewables, The Price is Wrong. I’m partway through David Kreps’ book on preference formation and the implications for economics, Arguing About Tastes – an important subject.

But various others came up in the conversation. It sounds like Underground Empire by Henry Farrell and Abraham Newman would be right up my street. I want to read Anu Bradford’s Digital Empires, Fei Fei Li’s The Worlds I See, and also haven’t yet got round to Angus Deaton’s Economics in America. I bought Charles Crowson’s Jam Tomorrow but haven’t yet read that either. I see from the new Princeton University Press catalogue that they have a book, Discounting the Future, by Liliana Dogonva, that I’ll definitely want to read when it’s out in April

In any case, other recommendations for holiday reading (and beyond) please!BCBF7F75-24DB-4F1F-9A62-B43D8E96F7AE_1_105_c

The social life of measurement

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How could I resist a book called Beyond Measure: The Hidden History of Measurement. By James Vincent, it’s a pacily-written whistle stop tour of – well, the history of measurement. It runs from the beginnings of standardised measurement in the ancient world through mediaeval markets, the scientific revolution, the French Revolution, land surveying, the development of statistics all the way through to the Quantified Self movement.

It’s aimed at the popular audience, getting over the key message that the measurements used to understand the world are both socially constructed and in turn construct society. “In our attempt to measure uncertainties we construct new knowledge and in doing so we inevitably remake our understanding of the world.” It also points out that measurement systems can be at the same time utopian and totalitarian – we should stay aware of the fact that reality never fits neatly into a measurement framework.

For those interested in developing new ways of measuring – like the Beyond GDP movement – the book also offers a somewhat cautionary note: “The pervasive nature of measurements helps explain why the changes to units so often occur in times of social upheava such as conquest or revolution. It is only during these moments when old sueties are tossed into the air. … that reordering of anything as fundamental as measurement can take place.” GDP itself was the progeny of world war.

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The Enlightened Economist Prize 2023

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Drumroll – it’s time to announce the winner of this year’s prize, from the long shortlist.

It’s been a difficult choice, as so often. Indeed, I’m going to have a runner-up as well this time. A reminder that this is entirely my personal decision, reflecting a book’s combination of insights, facts or ideas that were new to me and compelling writing to make it an enjoyable read. There is nothing systematic about the longlist, which just depends on what I read during the previous 12 months. And the Prize is that I offer to buy the winner (and the runner up) lunch if we happen to be in the same place.

So this year’s winner is Ed Conway’s Material World, a fantastic voyage of discovery around the world exploring the critical materials on which modern life, and the modern economy, depend. Some of these are familiar, like lithium, others far less so – such as the specific sand or salt needed for critical manufacturing processes. A quarter century ago I published a book called the Weightless World which observed, correctly, that economic value was increasingly intangible. There has been progressively less material stuff per £ of GDP since at least the 1970s. But the material to which all that intangible value is tethered is essential. This is a terrific read.

The runner up, as we head into a UK election period, is Paul Johnson’s Follow the Money. It didn’t quite make top slot because the content – UK policy and politics –  is so much more familiar to me. But it deserves a prize for clarity of writing and the white-hot burning anger about the seemingly ever-worsening leadership and economic management people in this country have been suffering. Essential preparatory reading for the next 12 months in the UK.

Ed, Paul – I’m at your disposal for the prize lunch!

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Enlightened Economist Prize Longlist 2023

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It’s the time of year when I look back over 12 months of reading and select a top 10. This time I have two top 10s, one for the usual economics and business books – the prize contenders – and another 10 I liked a lot as a bonus for readers. The prize is a free lunch when the winner and I happen to be in the same place, and anything I read is eligible even if it was published earlier than 2023.

OK, here’s the longlist, alphabetically:

Power and Progress by Daron Acemoglu and Simon Johnson – my review

Our Lives in their Portfolios by Brett Christophers – my review

Permacrisis by Gordon Brown, Mohamed El Erian and Mike Spence

Material World by Ed Conway – my review

Ravenous by Henry Dimbleby – my review

Pricing the Priceless by Paula DiPerna – my review

How Big Things Get Done by Bent Flvbjerg and Dan Gardner – my review

Seven Crashes by Harold James – my review

Follow the Money by Paul Johnson – my review

The Lazarus Heist by Geoff White – my review

And here’s the bonus list, which I’m going to label ‘These times’ – mainly technology and history, includes some fiction:

The Garden of the Finzi-Continis by Giorgio Bassani

Journey to the Edge of Reason by Stephen Budiansky – my review

Reality+ by David Chalmers – my review

Parfit by David Edmonds – my review

Hitler, Stalin, Mum and Dad by Daniel Finkelstein

Homelands by Timothy Garton Ash

The MANIAC by Benjamin Labatut – my review

The Last Colony by Philippe Sands

Cahokia Jazz by Francis Spufford

The Philosopher of Palo Alto by John Tinnell – my review

Finally, I have to recommend as a seasonal gift for yourself or someone else my dear husdand Rory Cellan-Jones’s memoir Ruskin Park. I’m biased but it’s had rave reviews. It’s about him growing up with his single mum in a South London council flat and his amazing family story, about his mother’s love story and the barriers talented and ambitious women like her faced in the 1950s through the 70s, and about the BBC.

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Institutions, finance – and war

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Perhaps it was because I read the book in several stages, but I found it hard to take away a single line of argument from Geoffrey Hodgson’s The Wealth of a Nation: Institutional Foundations of English Capitalism. There is plenty of interest in the book but the chapters seem unconnected. One of the comments on the back, from my former colleague Sheilagh Ogilvie, makes a virtue of this, praising it for steering clear of monocausal explanations, which is true. But the book is also making an argument about the mode of economic analysis as well as about causes of the Industrial Revolution.

Anyway, here is what I took from my read:

  1. Other accounts of the origins of the Industrial Revolution and capitalism in England get something wrong: Marx, McCloskey, Mokyr, Allen, Weber, Uncle Tom Cobbley and all.
  2. This is because they do not employ the framework of evolutionary economics.
  3. Economics goes wrong big time in mixing up capital as in physical capital goods and capital as financial capital, starting with Adam Smith.
  4. Economic development is a process of the creation and changing of both technical and institutional rules.
  5. The distinctiveness of capitalism lies in the development of financial instruments and markets, especially mortgages lent against collateral: “Developed financial institutions make capitalism historically specific.”
  6. The Industrial Revolution was due to institutional evolution – mostly gradual but with some big moments of dramatic change such as the deal that brought about the 1688 accession of William and Mary.
  7. But the impact of external shocks – especially war – in bringing about economic development is under-appreciated.

I liked this observation about institutions: “They function as information registries of what is produced and owned, and of rules governing their use and allocation.” Hodgson cites Shannon and Weaver’s definition of information – something whose receipt can cause an action. This metaphor of units of information underlies the evolutionary approach, as I understood this chapter. Hodgson here and elsewhere has strongly argued the case for a paradigm shift in economics away from its still-extant physical production function framework to the evolutionary framework. (I do see the crumbling of the old paradigm in some respects but we’re far from a new one taking its place.)

The book ends, to my surprise, with a chapter about Japan’s economic development. I think the point here is that: “Major institutional changes in the fundamental areas that matter for economic development typically depend on exogenous shocks.” For Japan these were the Meiji restoration, then loss and occupation in 1945/6.

All in all, an interesting read, but it made me think I’d get more from reading one of Prof Hodgson’s earlier books on evolutionary economics.

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