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False Economy August 23, 2009

Posted by Brian L. Belen in Academically Speaking, Books, Reviews.
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It’s easy to mistake False Economy: A Surprising Economic History of the World for a book cast in the same mold as many titles these days about the present economic malaise. At first glance, Alan Beattie’s latest does have all the trappings: Deals with a political-economic topic potentially related to the global downturn ? Check. Has a title that communicates something ominous? Check. Offers the possibility of casting one’s prior understanding of world events in a completely different light? Game, set, match. Yet this offering from the Financial Times’ world trade editor is anything but a book of the sort, nor does it aspire to be.

In truth, overshadowed by the sensationalism that words such as “false” or “surprising” tend to stir, False Economy attempts to be no more or less than a reader on economic history. In this regard it manages to stand out, to some extent because it offers the economic history of nothing in particular — opting to discuss how certain economic quandaries can be explained by reviewing its political-economic antecedents — but more because it argues against the notion that economic outcomes are inevitable. In Beattie’s words, “[t]he aim of this book is to explain how and why countries and societies and economies got to where they are today […]. But it will reject the idea that the present state of those economies, countries and continents was predetermined. Countries have choices, and those choices have substantially determined whether they succeeded or failed.”

How does the book measure up against this yardstick? Quite well, for the most part. Beattie tackles topics using economic history as his lens (such as the development of cities, patterns of trade, or the purported link between development and religion to name but a few) in an undoubtedly erudite fashion. Indeed, the book as a whole makes for some maddeningly holistic reading, what with the author’s knack for citing seemingly disparate episodes across time and across countries to get his point across. Granted, the result is hardly stellar each and every time, but when it strikes a chord it surely resonates.

Unfortunately, on the “predetermination” score False Economy comes up a little short, but not for lack of trying. Certainly, the book makes a coherent case that economic outcomes are merely the end result of past choices that could have gone many different ways. Yet an equally compelling argument can be made that any single choice limits the efficacy of each succeeding one, sometimes to the point that the decision tree of a country/society/economy becomes so narrow as to render some outcomes more likely than not. Inevitability? Not necessarily. But while Beattie rails against the idea, it does seem much like path dependence at work. To be fair, this really comes with the territory as such is the unending dilemma of history and the business of making sense of the past.

Overall there’s much to commend in False Economy. It is a decent romp through economic history — not a saga, by any means, but merely episodes of different stories — that at the very least should have readers thinking about economic issues a little bit differently.

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