Review: Popper’s Digital Gold Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money

Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money
Nathaniel Popper

Just the bitcoin book for me – the kind of guy very interested in the personalities involved and the political and economic repercussions, perhaps not the book for people interested primarily in the technical issues related to the currency. This is so good, and so accessible to the layman, that I’m surprised it hasn’t gotten even more attention. Popper has clearly been covering this story for quite some time. He has a good handle on the tech, and has deep knowledge of most of the major players (except of course for the mysterious Satoshi).

Speaking of Satoshi, it’s nice to read something about bitcoin that doesn’t become obsessed with figuring out who he (or they) might be. Popper cover the Satoshi angle, include the Newsweek debacle, and other theories of his identity, but he doesn’t dwell on it. Real, known, characters like Ross William Ulbricht from Silk Road, Mark Karpeles  from Mt. Gox, and others get more of the attention. I found that refreshing.

Like Black Flags, this is an early book about an important phenomenon, and surely the story of Bitcoin will deepen and change as time goes on, but this is an excellent introduction to the story of the digital currencies creation and early days.

Recommended.

Review: Braudel’s Perspective of the World

This review originally appeared in a now long defunct livejournal sometime around 2007.

The Perspective of the World: Civilization and Capitalism 15Th-18th Century, Vol. 3

Fernand Braudel

The final volume of this magnum opus tracing in minute, painful, detail the creation of capitalism in the west, and the precursors and repercussions of that creation in the rest of the world. For my reviews of the other two volumes, check here and here.

My tolerance for the detailed economic historiography that makes up a lot of this book is pretty low. The breadth of Braudel’s scholarship is still deeply impressive, but as I got to the last hundred pages, I found myself wanting to skip more and more of the detailed recounting of other authors scholarship.

The main take away from Volume Three is something that most people who are interested in the industrial revolution probably already agree on – this wasn’t a revolution in the modern Russian revolution sense. It was a change in the means of organizing society that few noticed while it was happening, and few even tried to understand until much later.* This of course leads to one of the questions that lefties are always arguing over – if one of the greatest reengineerings of society happened without anyone really knowing it was happening, then why on earth does anyone think they can come up with the next great plan by a decision by a central committee? Braudel doesn’t answer this, but all the evidence he gives would point to the conclusion that planned revolutions are a pipe dream.

Recommended for the enthusiast.

* Even Adam Smith, who came a little late to the party, didn’t really grasp what was going on.

 

Review: Lewis’s The Money Culture

The Money Culture
Michael Lewis

I love me some Michael Lewis, and I have confessed here before a pleasure in the business tell all book. Michael Lewis wrote one of the genre, Liar’s Poker. This collection of pieces written right before and after Liar’s Poker is all right, but not his best work.

I have a high tolerance for bad writing if I am interested in the subject manner, but even I had a hard time getting through some of the early pieces in here about the excesses of Wall Street or the inherent stupidity of American Express. Perhaps Lewis had to get all this poor sophomoric writing out of his system before he could write decent sophomoric books. If Money Culture is what it takes to get to Moneyball, so be it.

Don’t bother with this one, read Liar’s Poker and his book on baseball Moneyball. They won’t change your life or deeply inform how you relate to the world, but they are more worthy of your time.

Not Recommended. 

Thaler and Sunstein’s Nudge

Nudge

Richard Thaler and Cass Sunstein

In my final year of law school, Nudge was the book that was under every policy wonk’s arm. It’s not surprising that the khaki’ed masses of Du Pont circle wanted to read the first popular book explaining the policy implications of the findings of behavioral economics.

In Nudge, Richard Thaler and the dean of dork, Cass Sunstein, define behavioral economics, and then go on to use the lessons garnered from the scholarly literature in the field to propose certain approaches to big time policy questions, like health care, education, and the environment. Behavior economics, as all good wonks know, is a subfield of economics which uses behavioral psychology findings and argues that, despite what econometricians may want to suppose, we are not purely rational actors. Instead, our economic decisions are often based on impressions, crowd psychology and precognitive feelings. If policy makers have an understanding of how these non-rational factors work in effecting our decisions, then the policy makers can create incentives to encourage certain behaviors and discourage others.

At the time of its release, this was, to many of us, very exciting, and slightly dangerous, stuff. There is a whiff of the totalitarian in using behavioral psychology to nudge people toward certain decisions, isn’t there? Sunstein and Thaler are very conscious of this and insist that their proposals are to “nudge” people towards certain choices, not force them there. But when is an economic nudge actually an ultimatum? There is no bright line between a nudge and a demand. We must walk carefully when creating government incentives for certain behaviors, economically punishing people for making unpopular lifestyle choices is something that makes me very nervous, but encouraging behavior that leads to a healthier population is something I am all about supporting.

Perhaps there is a middle ground of a “nudge” that we can find, but perhaps we should think twice about whether they are a good idea at all. Three years of the Obama administration and its obsession with the lessons of behavioral economics, there have been few victories on this front. Part of the health care reform act is based in behavioral economic ideas. As that program begins to roll out perhaps we will have more of a sense of whether or not these ideas are feasible or if the realm of human desire, and how to use it to create certain results, is still unknowable.

Review: Collier’s Bottom Billion

The Bottom Billion: Why the Poorest Countries are Failing and What Can Be Done About It
Paul Collier

Here is the basic argument – while it sucks to be poor in countries like India, India is heading for relative prosperity, and therefore some hope for its poorest citizens. Where is really, really sucks to be poor is in a number of countries, concentrated in Africa, where there is little hope of breaking out of a cycle of severe poverty.

Collier pinpoints four ways in which these countries stay at the bottom – (1) they are racked by civil wars; (2) they’re rich in a specific natural resource which stifles economic group in other areas; (3) they are surrounded by awful neighbors; and/or (4) they are a small country which is consistently horrifically governed. Collier proposes a number of concrete steps to deal with some of these problems, steps which I find to be realistic if perhaps politically unlikely at times. For example, Collier is totally in support of military intervention, of course he thinks there is a right way and wrong way to do it, but still, you’re not hearing Jeff Sachs talk about sending in guns to cure poverty and with the disaster that has been the Iraq war, I think it will be a long time before the developed world is interested in dangerous humanitarian missions.

This is the book of a man who has spent a long time in world of bureaucracies whose mandate is to fight poverty, and some of Collier’s ideas are a bit gun-ho in reaction to what he rightly thinks is a lack of will power from the developed world. I don’t think all of his ideas are good ones, and many of them I think are unlikely given the developed world’s current lack of commitment to fighting poverty, but if you have any interest in development and poverty reduction you have to read this book.

Recommended.

Review: Marx’s Capital Volume I

Capital: Volume 1: A Critique of Political Economy (Penguin Classics)
Karl Marx

This is another one of those reviews that feels a bit silly. If you’re interested in a life of a mind, you should read Capital. It’s one of the top ten most important books in history, and I am profoundly unqualified to review or critique it. However, this is America, and it is my god given right to post book reviews on my blog, so fuck you.
One of the great misconceptions about Capital is that it is dry and difficult. Many people seem to think that reading it would be a chore. Not true. Admittedly, I was lucky enough to read it with David Harvey, a pretty engaging dude in his own right, but I think even if you were to read it on your own or in a study group, you’d find it funny, engaging, and not all that hard. It assumes perhaps a small amount of understanding of classical political economy (Malthus, Smith, Ricardo, etc) but not much. A copy of the vintage edition and access to Wikipedia is really all you need.
Still, I’d say if you’re going to read it, read it in a group. Some of the ideas need to be worked out, but four friends of average intelligence can understand this book with a minimal level of effort.

That said, is it worth it for you to take the time to read this monster? I’d say so. While I may think a number of Marx’s ideas as laid out here are just plain wrong,* and the ideas of many of those who followed in his footsteps to be even more misguided, I still think this is one of the most important books in history.

As a friend once wrote about Capital, “this is literature”. It definitely is, with all the complications that come with that classification. This book does not explain the workings of a capitalist economy. It is not a science textbook. It is a brilliant work that is part history, part political theory and part a discussion (and refutation) of classical political economy. Everyone should read it, but no one should take it all at face value.

* I think the labor theory of value doesn’t hold up, and predictions of the inevitable death crisis in capitalism have proven to be, well, wrong. That isn’t to say there isn’t a ton to learn from this book. Marx’s analysis of the growth of the capitalist economy may not always be historically dead on, but it is valid, brilliantly argued, and worth grappling with.

Recommended.

Review: Prins Other People’s Money

Other People’s Money: The Corporate Mugging of America
Nomi Prins

Often, left leaning books on finance are poorly informed. Not so with Prin’s awesome Other People’s Money. Prin is a former Goldman Sachs director turned think tank progressive and she knows her stuff. Her critique here of the excesses of finance capital is now a decade old, but it still holds water and, indeed seems prescient of the 2008 recession. When you pay people to take risks with other people’s money, wherein they are rewarded for their wins and not punished for their losses, you run the risk of creating perverse incentives (see 2008). Prins lays out the reasons for this and back it up with a very strong understanding of the way Wall Street works. This is one of the best progressive books on finance out there, and I recommend it for the enthusiast.