from the Financial Times in London I'm
Frederick's to demand the literary
editor and this is news and focus where
we offer insights into the stories that
matter one of the big highlights of the
FT year is towards the end of the year
when we look back at all the books that
have been published and we get our
experts and critics and some of our top
writers to assess which are the books
from the various genres from economics
to health from politics to interiors are
the best reads of the year that's gone
by and it's a great pleasure to welcome
Martin wolf with me here he's done once
again a fantastic job in sifting through
all the economics books that have
crossed the his table over the past
twelve months but in particularly the
last six months and he's going to give
us an assessment of the types of books
that we've had the themes that they
discuss and what he thinks are gonna be
the great takeaways from them let's
first get at just an overview of all the
books that you've had a look at in this
year and particularly the last six
months great themes or any books that
really stand out what is astonishing to
me is how many good books there are and
taking the year as a whole it's quite
extraordinary it comes to over I think
about 30 books the themes are pretty
clear first and biggest I think is
capitalism and democracy and their
relationship is there's a system in
trouble I think we're still very much in
the aftermath of the crisis and in the
slow growth in the rise of populism and
all this is reflected very profoundly
another theme not quite as common as
that one is trade and trade Wars and the
the backlash against trade well that's
clearly a very significant one as well
there's some interesting thinking about
AI I had to book on that in the previous
lists by Richard Baldwin and now I've
got one by Roger boodles just here so
that's a clearly going to be a running
theme as well
there are sort of variants on some of
these things but I think these are the
ones that are clearly attracting a
multiplicity of authors basically
they're asking is the system working
right it's a big question that we the FT
led by you in a column that kicked off a
whole new initiative by the FT the the
new agenda that we've been asking
ourselves so I think you feel that we're
part of a broader intellectual trend we
are all responding to the same questions
the system is not as working as well as
we would like either politically or
economically you can either ignore it
and pretend nothing's happening or
respond to it and I think many writers
in economics as in politics and other
subject and of course we in journalism
have to respond to these questions of
the books that you in the red are in the
last six months which are the ones that
feel you really stand out about
inequality and why Thomas philoponus
book or the great reversal isn't
narrowly about inequality but it's about
is capitalism working and above all is
capitalism working in the US and it is I
think the most exciting economics book
I've read because it uses evidence very
very compellingly to argue that
competition isn't really working in the
US and that's quite controversial
working less than in the EU which is
evil which is more controversial and I
think it's incredibly impressive
I think the book by size and zucman on
how the rich avoid innovate acts is
mostly avoid them is also really
important because again it's not just
waving one's hands they've done a lot of
work and they've shown really quite
compellingly
and shockingly to me that the top 400
richest people in the u.s. paying a
lower average tax rate than any other
group largest group in American society
old way down to the bottom 10% of the
income distribution that's pretty
shocking and so it's the evidence
I'm very responsive to somebody who
doesn't just talk about something very
generally but actually produces evidence
tell us briefly then about the trade
well as you say this is a topic which
was often what you know more on the
margins but let the perhaps of the
debate kimberly cow singh has done a
really good account of why progressive
people should be in favor of trade i
think this is a battle that has to be
engaged politically in the u.s. because
i think liberal trade is a progressive
cause and she makes a very good case for
it and basically arguing as i've tried
to do in my own writings that the
problems of the the poor and the working
class the middle class not been caused
by trade they've been caused by a lousy
domestic policy particularly in the US
but not only in the US but to me the
most important book is paul blue Stein's
he's done the work we need on the
origins of history of and current state
of the us-china trade relationship and
this is one aspect and at the moment the
central aspect of what is simply the the
dominant geopolitical story of our
lifetime i think which is the emerging
rivalry in conflict between the US and
China which is shaping everything and
he's done as he always does a wonderful
journalistic job of telling you what
happened doing analysis of how it
happened and I think anyone who wants a
briefing of what's behind this in taking
us back to Cades as we should and
putting him in context he's very
balanced about the what is real and what
is quite wrong about the charges against
China I mean if that is a very important
book on a very important topic right now
and as you mentioned earlier on you've
been doing this for several years now
having babies expert hopefully overviews
and telling our readers what one of the
books that they need to look out for are
there any new authors on the scene new
economists that you think wow this is
quite exciting never heard of this
person or you know they've been a bit
quiet until now where you look you think
this is really interesting this is a new
voice coming through well there are
several books here by people I hadn't
heard of before I mentioned Kimberly
cousing at Reed College I think Richard
Davies has done a fascinating book
economics in extremes very much approach
of a rather brilliant journalist I
understand he worked for The Economist
at one stage and he went to see well
what happens when things go really
really wrong or which are really
different and he comes up with of a war
yes suppose up in the middle that's
really fat cuz it's so different mark
Thomas his book ninety-nine percent is a
good solid right radical tome if you
like it's like the Occupy movement
updated but very well done has a Bushies
account of how inequality actually
undermines growth very important point I
should have stress that she had to think
tank in Washington a relatively new some
very well rehearse summary of the
evidence making the argument not just
that note that the inverse it's not as
we used to think inequality is the price
of growth but beyond a certain point
inequality has many consequences which
seriously undermine growth and this is
something economists have began to
realize and I think it's a very very
important contribution the final new
author to me completely new is this is
Katharina Pistor which looks at the code
of capital which looks at what makes
capitalism and it's sort of an obvious
point but it's done in great detail
which is well what makes capitalism is
all the things that are property and how
their property and it's not just objects
physical things that sort of things
people used to think of property there
all sorts of completely intangible
things derivative contracts
ideas which have been attached to the
idea of capital and she argues quite
persuasively that this is we owe all
this to the lawyers and that we
understate and underestimate the
importance of legal arguments and legal
processes in developing the entire
economic system we have today in many
respects she's quite convincing on this
really strangely things we would never
really agree to if
ever put to us collectively is that a
sensible former property we'll probably
say no some of them are really quite
weird could you give us an example well
one of them which is really very
technical and I'm sure get the details
wrong is actions will be amazed on with
derivative contracts hmm
how bankruptcy adjusts in that situation
and what I discovered is that there are
people who never expect who are ranked
above the most senior creditors because
of the way the legal structure works and
the implication is that people who
thought they were protected in law
because they were the senior creditors
turn out not to be and that's really
quite shocking and he's in the very
technical details of these contracts
where you illuminate these things
finally just on AI Roger boodles book
which is just that what I think you
found this quite a sort of different
take years had lots of you know views on
the how AI is coming for us or has
already arrived
well most books on this subject care of
the form it comes back to the tech hype
that the world is in got undergoing a
fantastic period of never before seen
upheaval most jobs are going to
disappear and and therefore we have to
be very nervous about all this the
Rogers book is a nice corrective
generally our experience with these
transformations and there be many is
there at least not neither then not
necessarily as profound and they're not
as quick as most people imagine
economists have been grappling with this
idea David Ricardo 200 years ago wrote
about the possibility that machinery
would generate permanent unemployment
and well it can develop real shocks
there's no question real adjustment
problems but boodles argument is well we
should be calm down and relaxed about
this and not be too upset now
is that right I don't know
in that sort of lean back relaxing
spirit I want out of all the books is
there in is there any one or maybe two
or more that you way you say this is a
big book this is one that will stand the
test of time people who talk about this
in years to come at that level I've
already mentioned Phillip enough and his
importance but I think there are two
books which challenge us in a rather
interesting way which I think I found
particularly enjoyable one is a book by
the German American ancient historian
Valdez Idol who wrote a wonderful book
called the great leveler this book is
called the escape from Rome and it's
very sensual II a story of the last
three thousand years and his argument is
what made Europe the the crucible of
modernity that the continent when new
things happened and to which now China
is responding so successfully what made
it happen is that the universal empire
disappeared so he puts it the best thing
Rome ever did for us was disappearing
and that's a very much I think a
counterintuitive view it's not original
I mean some people have argued this orb
is beautifully done the other book which
I enjoyed very much when I know has been
a bit controversial which I reviewed he
is Darrin a chomo Leo and James
Robinson's book the narrow corridor and
it's a much more sophisticated an
up-to-date vision of what liberalism
means what is a free country as well how
does it happen and instead of being
where they tended to be in why nations
fail you'd have the right institutions
and the Slade goes away their previous
book and the state goes away and
everything happens as long as the state
imposes the rule of law they've now got
what I think is a much more
sophisticated view which is civilized
societies are the product of a balance
between the powerful state you need a
powerful state but it has to be balanced
by a powerful society in democratic
institutions which fight against the
state and
force it to take account of society's
desires and if you don't have that
balance you either end up with despotism
or you end up with anarchy and this is
what I think is really important and why
this is a significant development in
their thinking is the it brings out the
great fragility of civilization which of
course we learnt in the 20s and 30s but
we thought we'd fixed all that and that
we now knew how to do all this a narrow
corridor is the wall view is a narrow
corridor is the path on which stable
liberal democratic societies exist and
function and it's narrow and we can be
pushed out of it and that I think is a
book very much of and for our time so
probably those are the two big books
there that I think are likely to stand
the test of time because they are
addressing things that we're not going
to stop what they're thinking about well
on that cheery note Marty thank you very
much and thank you I should also just
say thank you very much for having read
all the books for for us for our readers
I'm sure they'll they will appreciate
that and thanks for listening don't
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