The global economy is not just unusually fluid, it also is being jolted – from above by economic uncertainties, domestic political polarisation and geopolitical threats; and from below by disruptive technologies in an ever-expanding number of industries.
These unusual bottom-up and top-down forces, some quite controversial, have been explored in several works that captured my interest last year.
On economics and policy, the former Federal Reserve chairman Ben Bernanke’s The Courage to Act: A Memoir of a Crisis and Its Aftermath is instructive in detailing the traumatic global financial crisis and its effects. It also reminds us why the economic and financial path ahead is so “unusually uncertain”.
The implications go well beyond overreliance and unhealthy dependence on central banks’ experimental monetary policies, whose benefits increasingly carry the risk of collateral damage and unintended consequences. In addition, domestic political systems are finding it difficult to respond to the challenges and the related evidence of popular discontent, the emergence of protest and anti-establishment movements and pressures on social cohesion.
These concerns run through Martin Ford’s analysis in Rise of the Robots. Many won’t agree with his policy prescriptions but it is hard to ignore his arguments about the consequential structural shifts to the things we do and the way we do them brought about by automation.
Should you have any doubt about the potential power of disruptors, especially during this phase of great technological advancement, Stephen Witt’s How Music Got Free is a must-read. It flows like a captivating novel, highlighting the historic upending of the music industry through a grass-roots revolution triggered in a most unlikely manner.
I feel compelled to add a book to the list that takes a refreshing, and far from comforting, look at the industry. In Other People’s Money: The Real Business of Finance, John Kay pushes us to question how the industry has approached and performed its basic function of intermediating savings and other loanable funds to productive activities.
The combined message of these books is a pervasive fluidity that makes the path ahead unusually uncertain. Our understanding of this shifting terrain is complemented by two books on behavioural economics written by the giants in the field: Phishing for Phools by George Akerlof and Robert J Shiller; and Misbehaving by Richard Thaler.
■ Read The National’s excerpts from Phishing for Phools, Misbehaving, Losing the Signal and Unfinished Business here
Both remind us of the challenges to the “rational” responses that are modelled in many conventional theories and still dominate the mindset of too many leaders in the public and private sectors. And they highlight why we should work harder to reduce the risk of inadequate decision-making.
Poor decisions, and by people who should have known better, played an important role in undermining Blackberry. Losing the Signal by Jacquie McNish and Sean Silcoff tells the story of the company’s fall from a dominant position. This once high-flying company fell victim to a series of internal corporate conflicts and stunningly poor individual and collective responses.
My final recommendation is Unfinished Business: Women Men Work Family by Anne-Marie Slaughter.
Research and experience have made me a huge believer in the power of cognitive diversity. Yet, as a society and as individuals, we continue to undermine the type of inclusiveness – of gender, race and culture – that is needed and attainable. Slaughter provides a compelling narrative of the what, why and so what of foregone opportunities. She also supplies solutions that are relevant not just to policymakers and business leaders but also to parents looking to level the playing field for the next generations.
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