Money and Government

The Past and Future of Economics

By: Robert Skidelsky

Narrated by: John Lescault

A critical examination of economics' past and future and how it needs to change, by one of the most eminent political economists of our time.

The dominant view in economics is that money and government should play only a minor role in economic life. Economic outcomes, it is claimed, are best left to the "invisible hand" of the market. Yet these claims remain staunchly unsettled. The view taken in this important new audiobook is that the omnipresence of uncertainty makes money and government essential features of any market economy.

Since Adam Smith, classical economics has espoused nonintervention in markets. The Great Depression brought Keynesian economics to the fore; but stagflation in the 1970s brought a return to small-state orthodoxy. The 2008 global financial crash should have brought a reevaluation of that stance; instead, the response has been punishing austerity and anemic recovery. This audiobook aims to reintroduce Keynes' central insights to a new generation of economists and embolden them to return money and government to the starring roles in the economic drama they deserve.

PLEASE NOTE: When you purchase this title, the accompanying PDF will be available in your Audible Library along with the audio.

©2018 Robert Skidelsky (P)2018 Blackstone Audio, Inc.

Everyone can learn from this outstanding book!

Rarely would I sing the praises for a book as I would for this one. The world ignores books of this quality at their own peril. This book does something that I’ve never seen done before. It lays out a narrative in easy to grasp ways for how to think about macro economics, monetary and fiscal policy (money and government), and why it is necessary to understand in order to not be misled intentionally by fallaciously distracting substance free arguments.

The history of economics and its thought is laid out while always making it relevant to what happened in 2008 and what’s going on today. Keynes, Ricardo, Hayek and all the different schools are differentiated from classical to neo-classical, liberal, neo-liberal and post-Keynesian and so on. The real important thing the author states and demonstrates is that in Economics there really never has been a similar shift as there was in cosmology when the paradigm went from Ptolemy to Copernicus because all of the different schools of Economic thought never really start from scratch and never happen in a vacuum and need a proper context in order to understand.

There are expectations and logic built into how we understand our economic systems. He'll give the examples of Friedman (or it could have been another Economist, I actually forget which one) requiring rational expectations with an efficient market hypothesis in order for their Economic paradigm to work, but then he'll show that sometimes we see the world as Bayesian. He'’ll explain Bayesian in the narrative and I suspect not everyone will be able to follow his details but everyone can understand what he was getting at and why it's so important for the story he's telling.

Having read this book I realized an implicit truth the author is getting at. Economics is always searching for an intrinsic truth at its foundation. Say's Law wants it to be supply creates demand, Marx wants all monetary value to come from money as an intrinsic value through amount of work (and exploitation of labor), and the great schools of thought tweak and provide different nuances, but all want to effect change and contribute to overall well being. There is no absolute truth in economics and events and tools come along and make us see the world differently as the world changes and adapts while the Economic schools do the same. In the 70s we 'were all Keynesians now', and before the 2008 great recession we tended towards monetarism of Milton Friedman until Alan Greenspan finally made the statement 'I'm shocked, I can't believe it bankers lied to me'.

The author clearly wrote the book so as the reader can understand the efficacy of fiscal policy over monetary policy. Austerity is not an efficient road to growth, low inflation or high employment, and monetary policy by itself is probably not sufficient (the author definitely tends towards that, but he never goes beyond what the facts say). Confidence fairies don't exist (the author explains what that means if it is not obvious to you). Everything the author writes about is always in the mainstream of professional Economic thought with the possible exception of the last hour of the book and that's only because that's his personnel thoughts on specific recommendations.

The author never insults his reader and assumes they want to understand. If it takes an equation or four to make his point he'll do just that. He'll show how VAR (value at risk) models for determining Tier I capital requirements was an absurd standard (VAR allots capital reserves by taking the minus 3 sigma risk and multiplying it by 3) and how the CRA (credit ratings agency) contributed mightily to the 2008 financial meltdown. The author never gets ahead of the facts and shows the theory in support of the practice. He quoted Ben Bernanke concerning QE (quantitative easing) that 'it worked in practice but not in theory'. The author probably tended to disagree with that but knows the problems with ceteris paribus and counter factual argumentation thus never really going beyond the known facts.

Most political debates are void of substance since the economic foundations are not understood by most pompous windbags who spew their bilge with no understanding. This book fills those holes by honestly looking at the history of economics, its ontological foundations, its psychological, sociological and political underpinnings, and what happened in 2008 and what is going on today.

Without a doubt I would recommend this book as probably the most significant and relevant book that I've read this year. I'm glad I listened to it instead of reading it since it is full of econometric equations and by listening to the book I didn't dwell on solving the equations; I just mostly concentrated on following the narrative, and the story the author is telling is one I would recommend to everyone today in order to be a well informed person. [I don't want to take away from this book, but I also would recommend 'Crashed' by Adam Tooze. It covers the crash of 2008 in more detail then this book. I think the only thing I really disagreed with this book, 'Money and Government', is he tended to blame subprime mortgages more for the crash than Tooze did].

It's a real pity the world seems to be ignoring this book, because it is a real gem and it's one of the few books that I would recommend everyone read (or listen to). There are real economic problems lurking around us right now and the overwhelming majority of people trying to solve them or argue their view points are without substance and this book would help them get the real foundation they need in order to bring them coherence and understanding. I realize that not everyone can follow mathematics in an audible format or even on the printed page, but for those people who can't, I will say the narrative will come through regardless.