Author Archives: Diane Coyle

Enlightened Economist Prize 2022 – the winner

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It’s always much harder to select a winner than to decide on the 10 (occasionally 12) books on the longlist, and somehow harder than usual this year. For I’ve decided there are two that have the combination of interest, distinctiveness and excellent writing I’m looking for. So, with the usual caveat that this is an entirely personal decision based on what I happen to have read, my own interests, (and no doubt my mood at the time), I’m offering a free lunch to both Brad DeLong for Slouching Towards Utopia and James Bessen for The New Goliaths. Congratulations to both!

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Times without a rulebook

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“This is a short book on a vast topic.” So starts Rules: A Short History of What We Live By, by Lorraine Dalston. I enjoyed reading it without ever feeling I got to grips with what it’s about, and the vastness of the topic might be the explanation – or the fact that it’s a lecture series in origin. The chapters work roughly chronologically from the ancient world to today, exploring different aspects of rules – rules versus discretion, rules as regulations, rules of art, rules as laws or norms, rules as algorithms. The book is packed with historical nuggets of information, of the kind I very much enjoy. On the other hand, there’s no narrative arc. It’s a pointillist painting of a book at a focal length that doesn’t reveal the big picture.

Perhaps this is a bit unfair. There are some mid-level conclusions. ‘Thin’ rules such as routine algorithms or traffic regulation work well in stable contexts, and require a good deal of pre-existing infrastructure, be it training data or investment in traffic lights and cameras. ‘Thick’ rules are needed for situations requiring flexibility and judgement, and tend to have exceptions to prove them. “Low tolerance for discretion indexes rampant distrust in society,” she writes. Either governments which don’t trust their citizens, and so apply pettifogging rigour, or sometimes citizens who don’t trust authority.

Sometimes explicit rules need implicit ones to support and enforce them; the ideal of sufficient stability and predictability to do without the implicit is perhaps a modernist interlude. But the book’s final conclusion? “In abnormal times, when we are thrown into the breach without a rulebook, we once again become aware that there are no rules to help us reason about rules.”

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The 2022 Enlightened Economist Prize – longlist

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Looking back over my reading during the past 12 months, there is a strong longlist for this year’s Prize. As a reminder, this is a completely arbitrary decision based on the books I’ve read (regardless of their publication date), and – apart from the glory – the only actual prize is an offer to the author of a free lunch next time they and I are in the same location. There’s a bias toward digital economy titles, economic history, and a couple of great business books. Here’s the list:

Free Market: The History of an Idea by Jacob Soll (my review)

The New Goliaths by James Bessen (my review)

Cloud Empires by Vili Lehrdonvirta (my review)

Jan Tinbergen by Erwin Dekker (my review)

Slouching Towards Utopia by Brad DeLong (my review)

The Journey of Humanity by Oded Galor (my review)

The Vaccine by Joe Miller (my review)

Money Men by Dan McCrum (no review – it reads like a thriller, excellent read)

Restarting the Future by Jonathan Haskel & Stian Westlake (my review)

The Money Minders by Jagjit Chadha (embarrassed to say I didn’t write up a review as I read an early draft to provide a blurb. All you need to know to demystify central banking, in crystal prose).

 

 

Models and Morals

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This has been a busy term so I’m behind on my reading, but have recently finished a fine biography, Jan Tinbergen and the Rise of Economic Expertise by Erwin Dekker. I knew little about Tinbergen so was bound to learn a lot from any biography, and this one is genuinely interesting. It has some personal detail but is much more an intellectual history, locating Tinbergen in his historical context. That was not a happy one: the Depression and the Second World War occurred in his early adulthood. The intellectual currents were, of course, fascinating. I had never realised how much Tinbergen was engaged in policy throughout his career. As well as being the founding director of the CPB (which gave me as a thank you gift for a talk a fine bronze bust of Tinbergen earlier this year now in prominent position on my shelves),  he had previously worked at the League of Nations, and continued throughout his career to be heavily engaged in policy. This followed a youth involved in idealistic progressive political movements.

To the extent economists now know anything about Tinbergen, we think of the econometric models for which his Nobel Prize was awarded. The book prompted me to read the Prize Lecture, which is very interesting: “Models constitute a framework or a skeleton and the flesh and blood will have to be added by a lot of common sense and knowledge of details.” He went on to suggest using models to compare different social orderings – communism and capitalism – on a scientific basis; it seems a forlorn hope now but evidently not in 1969. And think about the literary illustration of the equivalance of perfect markets and perfect planning in Francis Spufford’s wonderful book Red Plenty.

Dekker comments that Tinbergen found it irritating that this work from the 1930s was remembered rather than his later thinking about the institutional framework within which economies operate – the ‘Ordnung’ (the book uses the German word). I found particularly interesting a chapter titled ‘The Expert in the Model, the Economist outside the Model’, portraying Tinbergen’s effort to reconcile the fact that he had put policymakers inside his model of the how the economy operates with his simultaneous view that economists could nevertheless analyse from above  – ‘the view from nowhere’ – how the system then changes and can be controlled. The chapter uses the Lucas critique to analyse this in a macro context. It’s one of the themes of my Cogs & Monsters.

I also greatly enjoyed the chapter ‘Measuring the Unmeasurable: Welfare and Justice’. Dekker writes: “Tinbergen was mostly silent on philosophical matters. …. One of the very few exceptions are his reflections on ‘measurement in the human sciences.” He saw measurements as a vector for changing behaviour, and in addition saw the purpose of economic measurement as measurement of economic welfare. His was not a positivist view, but rather a moral one: economic policy had a deep societal purpose.

The book is quite long but the 400 pages zipped by. Tinbergen was clearly a fascinating person and deserves to be better appreciated by the Anglophone dominated economics profession. This biography serves him well.

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Discord and David Hume

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October has been whizzing past, with travel to conferences (hooray), the start of term, and a new grandson. I’ve been reading a lot of non-economics books on trains and planes, including Ai Weiwei’s compelling memoir 1000 Days of Joys and Sorrows, Red Dust by Ma Jian, and also a chunky hardback, Orhan Pamuk’s latest novel, Nights of Plague.

Another chunky hardback has been Paul Tucker’s latest, wide-ranging and erudite, book, Global Discord: Values and Power in a Fractured World Order. I must admit it took me some time to get into it, perhaps due to my general October distraction, but I’m with the programme: his aim is to bring a mash-up of David Hume and Bernard Williams to the current fraught state of geopolitics and global crises. The book uses the Humean dual of incentives and norms to think about international economic institutions in place of more traditional International Relations perspectives (realism, constructivism…). As long-time readers of this blog will know, I’m a big Hume fan (although confess to not having read Bernard WIlliams since my student days).

The motivating question is whether a legitimate international order can exist in a world transitioning out of the European/Atlantic order and facing complex existential challenges. Specifically, what international economic arrangements can co-exist with current geopolitics and shifts in power? The book starts with a historical overview of how the current arrangements and structures developed and why the growing power of China has challenged them. The second section looks at what form institutions for international co-operation can take and when/whether they can be stable and self-enforcing – Humean norms and conventions as a lens on international relations feature strongly here. Part three focuses on current tensions within and between China and the US – neither seeming particularly stable internally at the moment, never mind in terms of their mutual relations.

Part four is really the heart of the book: what does the Hume-Williams framework – what will be stable and self-enforcing in its norms, and what will be normatively right – imply for how democracies can legitimately delegate to international organisations, and how such organisations can legitimately constrain individual countries and governments? What are the principles for participation and delegation? How can practical problem solving encourage and sustain norms of behaviour (Hume)? What is its moral basis and hence legitimacy particularly in our still liberal(ish) democracies (Williams)?

The final part moves on to how to apply the framework in the current context, in terms of different more and less opti/pessi-mistic scenarios:lingering status quo, superpower struggle,  new Cold War, reshaped world order. Chapters consider different organisations – the IMF, WTO, BIS etc – getting in to how these might evolve. And the book ends with a vote for cautious optimism. (I find it hard to share that view as Brexit continues to destroy British democracy and prosperity, courtesy of the Conservative Party, I must say.)

The breadth of the research (and length of bibliography) across different disciplines is impressive. The book isn’t a light read, but worth while – and there are actually plenty of online events where Paul Tucker himself will give a better summary than I can here. For any day’s news headlines make it clear there could hardly be a more important set of questions to be resolved.

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