Nilesh Jasani's Reviews > Slouching Towards Utopia: An Economic History of the Twentieth Century

The book is excellent in its sweep of early history, particularly up to the second World War, and does equally well in criticizing both the extreme left and right economic theories. However, the discussions lose objectivity and relevance as the author turns to the recent decades. They turn blindingly self-serving and completely US-centric as many of the prescriptions are beggar-thy-neighbour variety.

The book is unique for its focus on the history of the global political economy. The author is a devout Keynesian, which allows him to be equally harsh on the free-market theories of Hayek or Friedman as well as the communist policies espoused by the likes of Marx.

Through the horrors of the twentieth century, the book easily slams down every form of political extremism. At the midpoint, it becomes clear that any group that serves itself or an ideology - irrespective of whether political or economic - is naive at best in the assumption that all societies' ills could be solved by sticking to pure theories penned in some books. The end results are almost always far worse when such ideologues use their powers to suppress their internal and external dissenters and refuse to see the most obvious harmful results of their policymaking or politics.

Alas, in trying to promote the case of Keynesianism - re-branded as democratic socialism - the author falls prey to some of the same issues that face the ideologues of other types. This is particularly staggering when we are on the verge of another inflation era globally.

One could author a book with disagreements on the book's take on the era since the 1970s. The author does not even mention how the decades-long, post-WW2 boom was partly because of the low base start and partly also because of the policies that borrowed from the future (ie, led to the corrections of the 1970s).

Another driver of that era was the standing start of the Global South that allowed the already-ahead Global North to keep outperforming. Global South also took longer to get rid of some of the ideological, extremist political, and economic ism's, prolonging its plight.

By many measures, at a global level, the world's least privileged are living more, have materially better access to basic needs, have closed the gap on information/knowledge access substantially in our information age, and are being far less discriminated against than ever. There are still too many ills in the world to self-congratulate, but the author refuses to recognise that the trends on these were not necessarily positive in the decades he yearns for - not from the viewpoint of the world.

Keynesianism, like Capitalism or Communism, becomes too extreme as a stand-alone contender theory to solve all economic issues. Communism's failures are in its suppression of individual rights, its tendency to corrupt its powerbrokers because of the lack of checks, and concentrated, inflexible decision-making on inadequate information. Capitalism - in its purest form - lacks humanity, tends to runaway inequality of all kinds, and does not have enough protection for those left behind. It is also prone to excessive cycles that hurt the unprotected the most. Keynesianism's underbelly is in inefficient state policies, the populism that invariably gives rise to inflation, and the crowding out of the private sector, including in innovation.

The reality is such that any set of economic policies - whether in pure forms or as a mix and with its roots in trying to solve the worst problems of the previous set - will create its own problems over time. The macro policies, by definition, are applied at mass levels - which means there are always some who will be left behind in some ways, and over time their plights become bigger than other positives that accrue from these policies elsewhere. A pragmatic society, with a policymaking class that is not focused on working for themselves or any ideology, will have to keep shifting and shaping to remove the excesses (particularly the harmful ones) while never compromising on society's basic rules and norms. This flexibility is most difficult where those in power are set on any fixed goals - whether in boosting growth, reducing unemployment, or fostering equality - for a long time and/or wedded to a particular theory.

A slavish Keynesian approach causes governments to over-extend. While being morally and even politically correct, policies of subsidies, transfers, guarantees, and debt forgiveness, create obvious rot of a different variety after a while. Notwithstanding the fact that Keynesian or other forms of socialistic policies do not come in one form, none of these are forever right or wrong.

Back to the book: the book is a great read up until a point, and the reader's enjoyment would then depend on how much agreement they have with the author's economic preferences.