BOOK REVIEWS: False Economy

But at Kalahari.net

Recommended Retail Price:
R224.00 (Exclusive Books)

Publisher:
Viking, an imprint of Penguin Books (2009), 312 pages

While economic history cannot provide truth or reality, it may reflect a measure of wisdom. So the fun (or perhaps frustrating) thing about economic history is that whichever way one looks at it, it will always be wrong (unless you are the person making a particular point). What economic history does provide, however, are new perspectives. From an amalgamation of ideas, perspectives, priorities and frameworks sometimes a useful, practicable and effective new way of looking at the world emerges that will allow for better and more beneficial decision-making. So it is with Beattie’s False Economy.

At first glance, the book appears to be a rather haphazard analysis of selected aspects of the economic histories of countries such as Argentina, the US, Russia, Botswana, China and India (to mention a few), as well as the role and impact of religion, corruption and the occurrence of natural deposits of oil and diamonds on the development of nations and economies.

It is only in the last two chapters that Beattie starts drawing all these divergent strains and thoughts together to arrive at an analysis of why the Doha round of trade talks of the World Trade Organisation (WTO) was probably doomed to fail before it started: because of all of the different and conflicting perspectives (rooted in the quagmire of economic and historical theories on which they are based) that the members brought to the table.

Beattie points out that international institutions like the WTO should enable countries to make the right decisions collectively when it is hard for them to do so individually. As it turns out, however, the WTO will not be in any position to do so as long as its members defend their individual positions, rather than seeking to promote their common interests.

You may disagree with much of what Beattie says, but some of the conclusions he reaches are of particular relevance to contemporary South Africa. He concludes, for example, that individual nations’ success or failure appears to depend strongly on the quality of the institutions that support the market economy (such as the courts, financial sector and transport infrastructure) which, Beattie argues, rely more on attitudes and behaviours that have developed over long periods of time than on the continued creation of more and more formal external structures.

False Economy is a worthwhile read – even if Beattie argues (somewhat, but not entirely tongue-in-cheek) that giant Pandas are useless and should be let to die out.