The Map and the Territory

Risk, Human Nature, and the Future of Forecasting

By: Alan Greenspan

Narrated by: Malcolm Hillgartner

Like all of us, though few so visibly, Alan Greenspan was forced by the financial crisis of 2008 to question some fundamental assumptions about risk management and economic forecasting. No one with any meaningful role in economic decision making in the world saw beforehand the storm for what it was. How had our models so utterly failed us?

To answer this question, Alan Greenspan embarked on a rigorous and far-reaching multiyear examination of how Homo economicus predicts the economic future, and how it can predict it better. Economic risk is a fact of life in every realm, from home to business to government at all levels. Whether we're conscious of it or not, we make wagers on the future virtually every day, one way or another. Very often, however, we're steering by out-of-date maps, when we're not driven by factors entirely beyond our conscious control.

The Map and the Territory is nothing less than an effort to update our forecasting conceptual grid using twenty-first-century technologies. It integrates the history of economic prediction, the new work of behavioral economists, and the fruits of the author's own remarkable career to offer a thrillingly lucid and empirically based grounding in what we can know about economic forecasting and what we can't. The audiobook explores how culture is and isn't destiny and probes what we can predict about the world's biggest looming challenges, from debt and the reform of the welfare state to our competition with China to natural disasters in an age of global warming.

No map is the territory, but Greenspan's approach, grounded in his trademark rigor, wisdom, and unprecedented context, ensures that this particular map will assist in safe journeys down many different roads, traveled by individuals, businesses, and the state.

©2013 Alan Greenspan (P)2013 Penguin Audio

Critic reviews

"No other American economic policy maker in the past half-century could have written so thoughtfully about the implications of the Enlightenment for economic policy or have attempted, as Greenspan did while in office and does again here, to compute the physical weight of all the goods that comprise American gross domestic product. The range of topics and arguments makes this book a very important statement, whether one ultimately agrees or disagrees with the author.... Greenspan’s range, vision and boldness is especially important at a time like the present, when Washington is preoccupied with the political and petty.... Greenspan has written a major work.... [A] splendid book." (Larry Summers, Financial Times)

"The Map and the Territory is a model of expositional clarity, with complex and recondite matters made accessible to the lay reader. The book should be must reading for anyone interested in the way our financial markets work - and sometimes fail to do so." (Burton Malkiel, The Wall Street Journal)

"Compelling and hugely enlightening.... This exposition of a lifetime as a practicing economist is full of insights and lessons for financiers, security analysts, business students and public policy makers, especially Presidents, congressmen, central bankers and the FDIC, SEC, CFTC, FHLB. It should be required reading for some of the insights into the way markets perform." (Forbes)

I profit from listening, and sometimes disagree

This is a wide-ranging tour of ideas and history that have been capturing Mr Greenspan's attention since he left the Fed, and he thereafter admitted before Congress as the Great Recession unfolded, that some big assumptions and models he was using hadn't worked. I like to listen to his mind working, as, for example, he loosely cobbles together an economic model in front of the reader, or walks through a stretch of history, lucidly pointing out big salient features of how we got here. Like many very smart people I know, he shows a gift sometimes for displaying (what seem to me glaring) gaps in his reasoning, or for ignoring a 900-pound factual gorilla looming in the situation. (This is the reputed libertarian Ayn Rand disciple who yet worked in and around government much of his adult life, openly disliked government's solutions, yet became arguably the most powerful individual inside government, whereupon he showered cheap credit into the banking system for a very extended period (meanwhile refusing to exercise his statutory powers to regulate various mortgage finance practices) as a vast unstable housing bubble heaved up and (soon enough after he left the job) collapsed into the worst mess since the Great Depression.) This wouldn't be the first time models worked well until they didn't. But, aside from some sidestepping perhaps, he intrepidly wrestles with some big questions. For example, he tackles why this recovery was seemingly this tepid and slow. I don't agree with all the answers he finds, but along this journey I find this book has helped me clarify and sharpen and update my own views and opinions. And for that, I give Mr Greenspan credit and thanks. In that light, I think this work is a success.
I've seen reviews that complain about the wide range of sub-topics. But all of them are interesting to me, and I like the way the guy describes things.

Average, to tell you the truth

I'm afraid it doesn't add much to The Age of Turbulence. A little simplistic at times, self-excusatory. Surprisingly chauvinistic and derogatory of foreign nations and cultures; I say it's surprising because I thought Mr Greenspan was a committed internationalist. Well-written, folksy like the author.