Economics, then and now | Book Review: More by Philip Coggan

History is all about wars and kings and destruction. Economics is always about inflation and growth. How does one then narrate Economic History? The subject can be a drag, and it isn’t easy to maintain interest as we deal with centuries of events and developments. This is where Philip Coggan achieves the impossible by weaving an incredible story of the 10,000-year rise of the world economy is around 380 pages. The book covers financial crises like Lehman Brothers, Europe’s debt crisis contagion, and Ireland’s property crisis (Photo: Express archives). Being a journalist with Financial Times and The Economist gives him a head start. When you know that he had authored the columns Bartleby and Buttonwood, which cover niche subjects, it seems natural that the end product is brilliant.

This story has been told in various chapters, from how economics developed in primitive times, from trade that needed a government to maintain law to the evolution of finance to facilitate transactions. He traces the evolution process covering various phases from these basics in short chapters. Eighteen chapters span the entire period from the ancient economy to the present. The need for agriculture and the quest for energy has been the building blocks of this economic journey, with manufacturing taking the cake in innovation.

Globalization, spoken of a lot these days, is not new and existed in various forms as early as 1820, right up to World War. The charm of this book is that one can start anywhere, and the reviewer started from the back. The Lehman crisis has been described briefly in a couple of pages, where one learns how it began and how policymakers reacted. In a few paragraphs, the author takes us through the contagion in Europe, with the property crisis in Ireland providing the start, which then went across to the PIGS Group. Interestingly, while we usually associate MBS (mortgage-backed securities) as the starting point of the financial crisis, the first transaction was undertaken as far back as 1970 by Ginnie Mae.

This way, Coggan manages to be to the point when explaining or describing events and uses the advantage of being a journalist not to meander off course. Like how columns in newspapers and magazines have to be within a world count of 800 or 1,000, the chapters stick to this norm and ensure that one never loses track of the subject.

He focuses on 1979-2007 when the world saw the most significant changes. China was led by Deng Xiaoping, which overturned the model of Mao to what it is today with the blended economy approach. The Iran crisis brought about a leadership change in the USA, a turning point as Ronald Regan brought in the ‘less government’ doctrine pursued in England and later spread to other nations. The Berlin Wall’s bringing down and the USSR’s disintegration was turning points as communism disappeared or almost did, and markets opened up. India, too, came into the frame with liberalization and the concept of the Asian tigers as rapid growth took place worldwide—the great moderation, as it was called.

He also traces the History of central banks that talks of the institutions and the evolution of money, from the barter system to metals to currency and digital money. This is an exciting chapter, for sure. Another one talks of the importance of a government, and the common refrain is that it impedes once it crosses the domain of the preservation of law and order. But he points out that it is indispensable, especially since everything in the private economy depends on the state—it provides education, health, welfare, and infrastructure to all, without which enterprise cannot move. Without being judgmental about what the role of the state should be, he provides a refreshing perspective.

Technology is an issue he puts on the table that will make us think. We have had two rounds of a technology revolution. The first was physical products— the steam engine, power, aircraft, ships, machines, etc. The second one today is IT-based. Without getting into a debate, he compares which has been more effective. We may pitch for the second, but his point is that productivity levels are lower today than during the first round of the technology revolution. While we have more information, better communication, and newer forms of entertainment today, we may not be more productive. This makes sense when we think deeply as he gives an example of a current office environment where we may be surfing lots of stuff and spending time on things that are not part of our job!

More is a must-read for anyone interested in the evolution of economies. It is easy to read and grasp, and incredible how centuries of stories have been covered in one very readable and engaging volume.

Madan Sabnavis is the chief economist at CARE Ratings

More
Philip Coggan
Hachette
Pp 466, Rs 799