Best Books on the Economic Crisis

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 neo liberal 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 Neo Liberalism” 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 neo liberalism, 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 Neo Liberalism. (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 morgage market. An entertaing 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 US 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 hosuehold debt in the US, 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 US hosuing bubble, the sub prime bond debacle, the bank bailouts and the failed Obama stimulus package.

5 comments

  • Good to see you on top of the subject Andrew. I found The Big Short a great read. It is very revealing about how useless the rating agencies were in assessing sub-prime mortgage debt. These same agencies terrorized provincial governments in Canada (including the Sask. NDP) into making budget cuts to satisfy the bond market, and Martin used them to justify his own cuts. Do we have to listen to their nonsense again? Probably.
    To your list I would add Gillian Tett, Fool’s Gold. She goes back and looks at how the derivatives market developed. Nobody wants to talk about what a collapse of that casino operation would mean for financial capitalism.
    Finally I have admired the work of John Lancaster, published regularly in the London Review of Books. I have not read his book Whoops! but suspect it is great. Michael Hudson whose work appears on counterpunch.org (see his piece this weekend on the Greek crisis) has a volume in the works that I am looking forward to reading.

  • We in Ireland are getting our teeth into (the somewhat parochial) Sins of the Fathers: Tracing the Decisions that Shaped the Irish Economy by Conor McCabe.

    http://www.bookdepository.co.uk/Sins-Fathers-Conor-McCabe/9781845886936

  • I found Harvey’s Enigmas of Capital read as if it were put together in a rush – poorly edited, loosely argued, errors in captions on tables, etc. It’s not nearly as elegant and concise as his Brief History of Neoliberalism, which is great. Nevertheless, even sub-par David Harvey is pretty good.

  • Better than any of the books mentioned so far, in my view, is David McNally’s Global Slump: The Economics and Politics of Crisis and Resistance — very readable presentation of an analysis that I think is sharper than Harvey’s or Dumenil & Levy’s in a number of important respects.

  • I’ve read a number of the books mentioned here — Turner (great background in geo-political economics), Harvey (good on the overaccumulation problem), Lanchester (good on a lot of things, particularly for economic laypersons like myself).
    It seems not many people are talking about John Quiggan’s Zombie Economics: How Dead Ideas Still Walk Among Us (Princeton, 2010), which I would highly recommend.
    Quiggan reviews the theoretical foundations of mainstream economic thinking and dissects the intellectual bankruptcy that constitutes the ‘life force’ of the zombie that is neo-liberalism. In five chapters of clear, crisp prose he takes aim at five living-dead ideas which, given their zombie ontology, will likely have to be killed twice: The great moderation; The efficient markets hypothesis; Dynamic stoachastic general equilibrium; Trickle down economics; and Privatization. Quiggan strikes what seems like a perfect balance between speaking economics-ese to economists and speaking plainly to laypersons.

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