With the summer reading season at hand, here is a short list -- in no particular order -- of the best books I have read over the last couple of years on the roots and implications of the Great Recession -- essential reading for all progressive economists.
John Cassidy. How Markets Fail: The Logic of Economic Calamities. (Penguin, 2009.)
An American economic journalist, Cassidy moves back and forth between an account of the financial and wider crisis and the history of economic theory, showing how the crisis was rooted in what he calls "utopian economics." This is a great briefing on the failure of neoliberal economics to understand the dynamics of the real economy we live in, and a primer on the counter-current of progressive economics from Keynes to Minsky.
Graham Turner. The Credit Crunch: Housing Bubbles, Globalisation and the Worldwide Economic Crisis. (Pluto Press, 2008.)
This prescient book explained the roots of the coming crisis even before the financial crash at the end of 2008. It laid out some of the key themes of progressive analysis -- namely the origins of the crisis, not just in financial speculation and the housing bubble, but its deeper roots in the global repression of wages and structural imbalances in the global economy.
David Harvey. The Enigma of Capital and the Crisises of Capitalism. (Oxford University Press, 2010.)
Harvey's Brief History of Neoliberalism is, to my mind, by far the best single book on that subject. In The Enigma of Capital, he succinctly outlines why the Great Recession has to be considered a crisis of global neoliberalism, and then lays out the multiple potential sources of crisis within capitalism, such as crises of over-accumulation, financial and credit crises, and crises rooted in the capital-labour relationship. He proceeds to lay out barriers to any sustained recovery and limits to the unlimited growth of capital, while arguing that there will be no definitive crisis of the system if there is no political alternative.
Gerard Dumenil and Dominique Levy. The Crisis of Neoliberalism. (Harvard University Press, 2011.)
I am still only part way through, but this looks to be the best comprehensive account of the crisis from a Marxist perspective. See also the 2011 issue of Socialist Register for a range of socialist perspectives on the crisis.
Michael Lewis. The Big Short. (WW Norton and Co, 2010.)
This is a page turner about the few individuals who saw the huge amounts of money to be won by using credit default swaps to bet against the sub prime mortgage market. An entertaining way to understand complex financial derivatives.
Jospeh E. Stiglitz. Freefall: America, Free Markets and the Sinking of the World Economy. (WW Norton, 2010.)
Nobel-prize-winning economist Stiglitz is good on the U.S. financial crisis and the housing bubble, and also good on the macro economic roots of the crisis and the failures of mainstream economic theory. He shows how increasing income inequality made global expansion dangerously dependent upon the growth of household debt in the U.S., while excess profits flowed into speculative finance, fuelling an unsustainable asset boom. Better on analysis than on alternatives.
Simon Johnson and James Kwak. 13 Bankers: The Wall Street Takeover and the Next Financial Meltdown. (Pantheon, 2010)
A searing indictment of the Wall Street banks and the shadow credit system, as well as the economists and regulators who let it all happen.
Dean Baker. Plunder and Blunder: The Rise and Fall of the Bubble Economy and False Profits: Recovering from the Bubble Economy. (PoliPoint Press, 2009 and 2010)
Good brief accounts of the U.S. housing bubble, the sub prime bond debacle, the bank bailouts and the failed Obama stimulus package.
This article was first posted on The Progressive Economics Forum.
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