by Nothing could be more relevant today than war and peace. Why We Fight (Viking, £18.99) by Christopher Blattman of the University of Chicago is an outstanding and original book on this topic. Blattman turns what most of us think about violence on its head. It is not frequent; it is rare. There are thousands of potential conflicts. But mostly they do not become violent, because fighting is costly and the outcome is unpredictable. It is far better to rub along together in mutual loathing than raise arms against one another. Why, then, if it is almost always so foolish, do we fight at all? The answer, suggests Blattman, can be found in five logics that undermine the incentives for compromise: unchecked interests (rulers, like Putin, who send others to fight and die); intangible
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Nothing could be more relevant today than war and peace. Why We Fight (Viking, £18.99) by Christopher Blattman of the University of Chicago is an outstanding and original book on this topic.
Blattman turns what most of us think about violence on its head. It is not frequent; it is rare. There are thousands of potential conflicts. But mostly they do not become violent, because fighting is costly and the outcome is unpredictable. It is far better to rub along together in mutual loathing than raise arms against one another.
Why, then, if it is almost always so foolish, do we fight at all? The answer, suggests Blattman, can be found in five logics that undermine the incentives for compromise: unchecked interests (rulers, like Putin, who send others to fight and die); intangible incentives (God or glory, for example); uncertainty (and its close relative, bluffs that go wrong); commitment problems (such as the inability of a country that is going to become more powerful than you to commit itself not to attack you); and, finally, misperceptions (the tendency to be overconfident).
Glenn Hubbard was chairman of the US Council of Economic Advisers under George W Bush from 2001 to 2003. He has impeccable pro-free-market credentials. It is striking then that his latest book, The Wall and the Bridge (Yale University Press, £20), admits problems with free markets.
Economic change has losers. Big economic changes have many losers. In response, one can build walls or bridges: walls are designed to keep out the sources of economic and social disruption; but bridges are intended to help people find new opportunities.
Populists of the left and right build walls. Donald Trump seized the Republican party by promising to build walls against people and goods. It is always easy to blame foreigners. But walls trap people in doomed activities. The superior alternative is to build bridges to a better future.
Those who gain from change need to compensate the losers. But “compensation is not a check from a gainer to the loser, but a basic principle that support for preparation (opportunity) and reconnection (social insurance) must accompany market acceptance of change. It preserves both the gains of market capitalism and dynamism, and popular support for those gains.” Hubbard’s support for such ideas is to me surprising, important and correct.
India is soon going to be the world’s most populous country. As Ajay Chhibber and Salman Anees Soz argue in their excellent book, Unshackling India (HarperCollins, £21.50), a prosperous India, given its population, will also necessarily be a superpower. Its future matters.
The book shows, however, that such prosperity is far from guaranteed. A little over a decade ago, continued fast economic growth seemed almost certain. Now that optimism has evaporated.
The book provides a superb overview of what has gone wrong and what needs to be done to put it right. Is anybody in India, above all the prime minister, Narendra Modi, and his close advisers, willing to understand this analysis and follow its good advice?
Richard Duncan, a well-known heterodox thinker on money and markets, ends up in a very radical position indeed in The Money Revolution (Wiley, £20.99).
Duncan argues that the US must invest massively for the future and, even more radically, that this can be safely funded by the Federal Reserve. Investment has indeed been weak. That is why we have been experiencing what Harvard’s Larry Summers called “secular stagnation”. But more investment is necessary, says Duncan, to improve the dynamism of the US economy.
The Fed should, he argues, finance this investment simply by creating credit. The consequences of such an expansion of credit and money can be managed by raising the required reserves of the banks to a level sufficient to eliminate “excess reserves” as well as ceasing the current practice of paying interest on reserves. This amounts to a large tax on banks.
These ideas can be viewed as the progeny of the Chicago Plan for 100 per cent reserve banking and modern monetary theory. Will they happen? Almost certainly not. But they are thought-provoking.
A final essential topic is demography. Amlan Roy is a leading expert. In his valuable book, Demographics Unravelled (Wiley, £30), he sheds useful light on all aspects of this crucial and much misunderstood issue.
Above all, the book shows that demographics is about much more than age: two people of the same age may be vastly different. It emphasises the importance of understanding the heterogeneity of populations: “Broad groupings of countries and regions based on their geography or median age often lead to false conclusions”. This is a lucid exposition of what we know on an essential topic.
Martin Wolf is the FT’s chief economics commentator
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