Renewed economic mayhem around the world has revived interest in economics books this Christmas.
It’s fitting since St. Nicholas was the patron saint of merchants. Indeed, one of his miracles even involved shifting the supply curve, as we call it now, when he provided for a wheat ship to unload at multiple ports without getting any lighter.
So what books might St. Nick recommend this Christmas? You’ll have to write your own letter and ask him, but here are a few of my favourite recent and classic picks to get you through the fourth winter since Lehman went bankrupt.
Newly published Boomerang: Travels in the New Third World, by Michael Lewis (Penguin, $30) is essentially disaster tourism for economists. Lewis, famous for his entertaining accounts of bond trading (Liar’s Poker) and statistics in the sports business (Moneyball), recounts his visits to financial black holes like Iceland, Ireland, Greece and California.
Each chapter leaves the reader equally appalled and entertained. Lewis interviews Icelandic fishermen who got into foreign exchange trading, visits Greek monks turned property speculators and tours brand new Dublin housing estates that no one lives in. His last chapter is closer to home, interviewing former California governor Arnold Schwarzenegger and the mayors of Californian towns headed for bankruptcy.
It makes you realize how much damage bad public financial decision-making can do. We may regret the Yukon government’s $36-million foray into Asset Backed Commercial Paper and recent cost-cutting at the City of Whitehorse, but Lewis reminds us that lots of other places have much bigger problems.
More Money Than God: Hedge Funds and the Making of a New Elite (Penguin, $19.50), by Sebastian Mallaby, is a rollicking account of the rise of the hedge fund industry. It’s a fascinating tale, not least since a lot of people talk about hedge funds but very few understand how they actually work. Plus, the industry’s free-wheeling ways attract plenty of outsized and outrageous personalities, giving Mallaby plenty of anecdotes to work with. For example, when the geeky quants at Renaissance used personal data on their invitees to build a computer model to do the seating arrangement for a 500-person dinner party, it sat one of their investors next to a woman who had sued him for sexual harassment.
Switching gears to fiction, it is too soon for anyone to have written the great novel of the current crisis. Past crises have given us plenty of classics you might want to re-read. A Tale of Two Cities by Dickens speaks to the one per cent and 99 per cent debate the Occupy Wall Street protesters have put forward. I recently watched the 1980 film of the novel, and I’m sure the scene where peasants toss aristocrats out the palace windows would make more than a few Wall Street bankers squirm in their seats.
Another classic is Anthony Trollope’s The Way We Live Now. Trollope penned it as a scathing critique of greed and irresponsibility after the financial crises of the 1870s. “Of all novelists in any country, Trollope best understands the role of money,” said W.H. Auden. Twentieth century reads include The Grapes of Wrath and Bonfire of the Vanities.
If you have noticed the strange tendency of TV channels to put Second World War shows on at this time of year (Nazis at Christmas! as my wife describes it), then you might be interested in Hitler’s Empire: How the Nazis Ruled Europe (Penguin, $25). The Third Reich’s ruthless efficiency did not transfer into the economic sphere. In fact, the economic illiteracy of Hitler and his lieutenants led to the squandering of resources on an epic scale. Not only were the Nazi labour camps a crime against humanity, they also drained resources from the front. And while the Nazis looted occupied Europe with enthusiasm, they did a terrible job at marshalling the continent’s resources for total war. The French aircraft industry, once the biggest in Europe, produced only six aircraft under German management in 1943.
If you’ve moved from paper to iPods and iPads, there are some great electronic choices. The Economist magazine has a clean and easy to navigate iPad app if you buy your loved one a subscription. If you are giving an iPod, I suggest you pre-load it with a couple of entertaining economics podcasts.
Planet Money from National Public Radio is a superb show, delivered by a set of young journalists that didn’t get the memo that economics should be boring. They’ve wrung some fascinating insights, for example, from their recent pieces on Las Vegas gambling, bacon trading and the European financial crisis.
The Wall Street Journal This Morning podcast is your link to what’s on the Street’s mind this week. For podcast listeners of a certain age, the way they separate the stories with snippets of 1980s classic rock will also appeal.
Merry Christmas and happy reading!
Keith Halliday is a Yukon economist and author of the Aurore of the Yukon series of historical children’s adventure novels.