Bradford DeLong

I really enjoyed this. It's a 500+-page economic history of the years 1870 - 2010. It got really exciting in the WWI chapter, nearly every sentence packing a punch. Here's just one I bookmarked, about how just 80 years separated Croats & Serbs fighting together as blood brothers in WWI and the breakup of Yugoslavia in the 90s: "To fight one set of wars at the start of the twentieth century to unify Serbs and Croats, and another set of wars at the end of that century to 'ethnically cleanse' show more Serbs of Croats, and Croats of Serbs, seems among the sickest jokes history ever played on humanity, or, more causally accurate, humans ever played on history."

The overall theme of this history is Hayek vs. Polyani. Friedrich Hayek, I was familiar with, but with Michael Polyani I was not. DeLong sums up Hayek (repeatedly - the book is not afraid to repeat its themes): "The market giveth, and the market taketh away; blessed be the name of the market." Polyani, if I can summarize: nothing beats the free market for producing general prosperity, feeding technological progress, and allocating capital efficiently. However, people generally want more. They want some stability, some expectation they can keep their job, some fairness, etc. The market produces none of these things, which isn't a bad thing or a good thing; it's just not what the market does. Since people will persist in wanting these things, they will take action to make them happen, which is entirely reasonable. This struck me as one of those perspectives with a deep sense to it. Like when I turned away from libertarianism all those years ago. Freedom is great and important, but why should it trump other things that are also great and important? Like Haidt's RIGHTEOUS MIND - empathy is great and important, but people have other pillars of morality. So, the market is great and important, but there are other things that maybe it doesn't always trump.

Great food for thought, great history, great read. show less

I'm glad I read this so soon after Postcards From Tomorrow Square, because the parts that focus on China are a great macro-level companion to Fallows' work, and the rest is an excellent guide to many of the most recent developments in the world financial landscape. I can tell that UC Berkeley professor Brad DeLong wrote the majority of this book by his recognizably light-hearted but extremely erudite style - he's a smart guy who is trying to explain something that is unprecedented in US show more history, which is that all of a sudden the former "world's only remaining superpower" (a vomit-inducing epithet, but still true in many ways) is no longer totally exempt from the same financial laws of gravity that bind every other country in the world. In the book's phrase, "What happens when the US no longer has all the money?" Ever since World War 2 the US has filled the role that the UK used to, the world's strongest and richest power setting the pace militarily, politically, and culturally. The UK was bankrupted by the war and essentially surrendered its ability to act unilaterally in exchange for peace and stability, gracefully transitioning from the all-pervasive hegemonic British Empire into just another European power, and the United States is about to undergo a similar transformation. In our case it's due to a number of factors: unsustainable budget and trade imbalances, inexorably slowing growth, the rise of non-nation-state financial actors, and developing countries moving up the economic food chain.

To ensure that their growth is positive-sum economic progress rather than zero-sum trade wars will require adapting to a new mindset, however: the neoliberal consensus of laissez-faire management and focus on markets instead of government power has become obsolete, not least because of its conspicuous failures in the run-up to the Great Recession, but also because societies are slowly remembering that the foundations of prosperity in the post-war period were in large part due to deliberate governmental policy, without which we would not have microwaves, semiconductors, high-speed trains, jet aircraft, the Internet, interstate highways and countless other vital technologies and pieces of infrastructure. Making the shift from laissez-faire back to active economic management, or industrial policy, doesn't just involve Uncle Sam cutting Boeing checks (or the Euro equivalent with Airbus), it also means currency management (or "manipulation", if you're feeling pejorative and talking about China). One of the biggest yet least-understood stories in the world today is China's propping up of the US dollar by keeping its own currency weak, which both artificially boosts the American economy but also gives its own exporters a leg up on the competition.

DeLong and Cohen note that in picking winners (exporters) and losers (domestic savers and consumers) in its economy, the Chinese government is merely doing not only what its "Asian Tiger" neighbors did during their own booms, but also what every Western government has done since the dawn of time, from Alexander Hamilton's American System to the French national champions. That industrial policy has become a dirty word in America doesn't mean that it doesn't work, it just means that it will go by other names, from monetary and fiscal policy to the increasingly influential sovereign wealth funds, which are a cross between plain old infrastructure banks and hedge funds on crack, with all the possibilities for corruption and failure that description implies. As other countries begin to use these tools to flex their muscles and catch up to the advanced countries, the ability of any single country to fully control its own destiny will weaken, and the US will have to adjust to this new world of consensus and interdependency. The key variable is the role of the dollar, which has remained surprisingly strong during this crisis as investors looked for safe havens and decided the greenback was the least of all evils in spite of America's looming fiscal crises.

As long as the dollar remains the world's reserve currency, the US will still "have the money", to a certain degree, and other countries will have a stake in our continued prosperity - should that no longer be the case, however, life would get much worse for nearly everyone in America as well as investors around the world. The great world challenge of this century will be to rebalance the American and Chinese economies into something approaching normalcy, to turn the "financial balance of terror" that is the massive and increasing amount of American debt held by China and others into productive investments that make everyone better off. No one knows how that can be done, or if it can be done, and your position on whether or not these immense multi-trillion dollar structural shifts in the world's economies are feasible depends on your opinion of the competence of people like Ben Bernanke and Tim Geithner. That old Chinese curse about living in interesting times gets more relevant every year. show less

The subtitle of DeLong's book is "An Economic History of the Twentieth Century."

That's a tiny bit misleading. He writes about what he calls the "long twentieth century," beginning in 1870 not long after the end of the American Civil Warn, and ending in 2010, just after the election of Barack Obama and the 2008 housing crisis that kicked off the Great Recession.

It's ambitious -- that's 140 years on the entire world (with an acknowledged emphasis on the global north, but coverage of other show more regions as well), spanning what DeLong demonstrates is the greatest period of economic advancement and improvement in the history of humanity. He reaches backward every now and then, for example to the beginning of the industrial revolution in England, but does a very good job of staying on point for 530 or so pages.

There are recurring themes throughout the book -- "Polanyian rights," "really-existing socialism" and others reward an end-to-end read, because they are introduced once, and used over and over. I was struck, though, by the fact that individual chapters were really excellent short histories that could stand alone, on significant events in that long century. Want to understand the rise of the Soviet Union? Chapter 8, Really Existing Socialism, taught me things I never knew. Want to wrap your head around the economic forces and political genius that led to Hitler's rise? Chapter 9, Fascism and Nazism, is a pretty good textbook. Chapter 16, Reglobalization, Information Technology and Hyperglobalization is an outstanding explanation of the period, beginning most noticeably in the 1980s and running to about 2010, that produced so much wealth, and also social media.

The book is greater than the sum of its parts. Its parts are excellent.

You write a history of something when it's over, and DeLong's argument is that the long twentieth century has ended. That's not so much because of the date on the calendar, but because, DeLong says, the advantages and forces that led to such an astonishing climb have come apart at last. The book doesn't end pessimistically, exactly, but it acknowledges the enormous challenges we face right now -- a climate crisis, populism, discrimination and worse of some people, and an absence of thoughtful, principled and kind political leadership equal to the moment. show less

A great read!
A political economists looks at the "long" 20th century - 1870 to 2010 and picks out the big picture issues - the grand narratives.
The author has an engaging writing style, confident but also self-deprecating. I was rapt for most of the coverage, but not so much for the more recent decades - maybe it's harder for the author (and reader) to step back and consider the grand narrative for decades that are still raw in the mind of the writer and reader.