False Economy: A Surprising Economic History Of The World Hardcover – Apr 28 2009
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"Fascinating...the individual stories are mesmerizing...Beattie is a legendary economic journalist, whose analytical judgment is greater than most of his peers by an amount roughly equal to the income difference he reports between Botswana and Sierra Leone. [This] supremely entertaining and informative book is a great reminder that the details of success are often impossible to predict or prescribe." - Financial Times
About the Author
As world trade editor of the Financial Times, Alan Beattie writes about economic globalization, trade, development, and aid. Before joining the Financial Times he was an economist at the Bank of England. He holds degrees in history and economics from the universities of Oxford and Cambridge respectively.
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Top Customer Reviews
Beattie has done a lot of research and written a book that is a good read, but he tries just a little too hard to keep away from numbers and to appeal to some mythical general reader. Does anyone who might be reading this book really need to be told what the word "tariff" means?
The two best chapters are the one on natural resources, which is really about economic development and which tells resource rich governments how they can make good use of their wealth (but is Beattie's solution the only one?) and the chapter on corruption, which makes a good attempt of explaining why some corrupt countries do well economically while others do not. The chapter headings bear but little resemblance to the contents of the chapters. The chapter entitled "Politics of development" is about trade, and the chapter entitled "path dependence" consists, for the most part, of an economic history of Russian followed by a history of the Indian caste system.
Beattie seems to have rushed his manuscript to press. There are a number of minor proof reading errors and some outright mistakes. The Suez Canal opened in 1896, not 1869, and OPEC was founded in1960, not 1970. So if you do another edition, Mr. Beattie, fix it.
However, one cannot help but notice the authors pronounced bias as a liberal economist. The entire work assumes that economics is the only "true" essence of human behaviour; that we are homo economicus as a species. Things that run counter to the lassez-faire capitalist model are automatically labelled as "artificial". And all of this despite the crisis this system has caused in the past year, which he barely mentions.
He also contradicts his entire thesis out of the starting gate: he describes Argentina as having chosen to pursue the path to an impoverished third world country, yet in his opening discussion on Argentina sounds like a strong argument for historical determinism.
Worth the read - but read it with a grain of salt.
If this book were used to teach a course in economic history and each chapter could be explored in depth over the course of a semester, it would be fantastic. Unfortunately, it's marketed toward a general audience so if you're not an economics or a history buff, this book may leave you feeling a bit confused or overwhelmed with information. And no matter who you are, parts of it may bore you to tears.
Beattie tells us up front that through his exploration of the world's economic history, he will show how it was the choices made by various leaders that led each country to its current economic fate, as opposed to just plain destiny. He says this repeatedly despite contradicting his own thesis several times in the histories he recounts, and does refer to some countries' bad luck.
Each chapter focuses on a particular theme (e.g. natural resources, path dependence) and a particular question (e.g. why didn't Washington d.c. get the vote?), which make for a interesting set-up. And the beginning of each chapter actually is interesting; Beattie is good at creating a hook. The problem is that once he answers the title question a few pages in, the rest of the chapter goes into painstaking historical detail on the theme (and sometimes goes off on a marginally related tangent).
Some of the information is interesting and I did learn quite a bit, but the writing was so dry and there was just so much information that my eyes glazed over after a while. The best chapters were the ones on natural resources, religion, and corruption. They were actually engaging from start to finish.
Overall, there is a lot of good stuff presented here and it was worth the slog to learn what I did learn from it. But I would recommend it with caution: this book appears to be marketed to a general reader and I think that's somewhat misleading.
Most Helpful Customer Reviews on Amazon.com (beta)
Each chapter asks a question. Here are the author's answers:
1. Argentina failed and the United States succeeded because the United States consistently self-corrected from a good start based on a good English model. Argentina consistently repeated mistakes from a bad pattern inherited from an autocratic Spanish model.
2. Like countries, cities are shaped not just by big economic forces and geography (although those have a big influence) but also by choices made by governments and their people. Washington DC was placed in a "federal district" because the founding fathers were paranoid about giving any state the upper hand. Political inertia has kept DC without a vote but this is not a chapter about Washington DC. It is a fascinating survey about the rise and fall of cities in general.
3. Egypt imports half its staple foods because becoming self-sufficient in agriculture would use more water than it can afford to. When countries import certain commodities, with those commodities comes "virtual water."
4. Oil and diamonds are more trouble than they are worth (to a country as a whole) because the rulers and their buddies can't seem to resist taking all the profits; neglecting other industries and leaving the rest of the nation on its own. A notable exception is Botswana, which shows the formula to success.
5. Islamic countries don't get rich, not because of the religion itself, but because of the actions of priests, politicians, monarchs, and bureaucrats exploiting malleable religious doctrines to pursue personal goals of wealth and power.
6. At the expense of growers in the United States, we import our asparagus from Peru because the US spends millions subsidizing Peru asparagus growers so they won't grow coca leaves and make it into cocaine - despite the futility of efforts such as this. This chapter is full of examples from around the world of failed economic policies that gain a life of their own.
7. Africa doesn't grow cocaine because it doesn't have a good enough infrastructure. In this sense, the author means more than infrastructure such as roads to transport goods, although those aren't adequate either. Africa also doesn't have the business networking systems necessary to expedite business. Instead, there are bribes to pay at every juncture. The European former colonies all over the world were left with a business infrastructure. Europe tried to colonize equatorial Africa but because of malaria and other diseases, they lost too many colonizers, so they just took as many slaves as they could (the healthiest individuals) and got out.
8. Indonesia prospered under Suharto (a crooked ruler) and Tanzania stayed poor under Nyerere (an honest ruler) partly because Suharto, as corrupt as he was, maintained order and had some good economic policies. Nyerere had isolationist, self-sufficiency policies and his officials took wide advantage to extract bribes - not exactly a good business atmosphere.
9. Pandas (in the author's opinion) are useless because they went down an evolutionary cul-de-sac. Their incompetence at consuming and reproducing makes them hopelessly vulnerable. Contrast that to the flexible business plan of the ordinary housecat. Recognizing that Homo sapiens was going to have companionship needs for the foreseeable future, cats instantly spotted this opportunity and filled that slot in the market. Many countries act like Pandas rather than cats.
10. Conclusion: Entertainment is free and frequent at meetings of the World Trade Organization. Representatives of countries, including the US, relentlessly do things that are bad for their countries in the long haul to satisfy their small special-interest groups. Meanwhile, because of their oil, Russia is not even there. The job of staying on the right track only gets more difficult as the world economy gets larger, more integrated, and more complex. Lets hope we continue to make more right than wrong choices.
The chapters themselves are interesting, full of personal opinion, and provide a subtle but decidedly British point of view. The bias and slant that this includes sheds additional light on the subject of each chapter but only if you read for it and recognize that its there. Its a little like British humor which you have to listen to the words. In this book you have to read every sentence because more likely than not the main idea is buried in a sentence in the middle of a paragraph. Just a note to readers.
This makes the book tough to read for someone who is used to reading while they are travelling, have an hour or two to spare, etc. To get the most out of this book, I had to reserve an hour or so at the start of the day to do nothing but read and think about what the author was saying.
The assertions made in across the chapters on economic choices, cities, trade, natural resources, religion, etc are deliberately provocative -- again in the British style. The author's words are not as radical as the titles would suggest, and his prose can be indirect in several places.
So three stars, good content, interesting conjecture, well written technically, but not well structured for the reader. Given the plethora of books that are coming out on the economy and economic crisis, this would not be the first book I would naturally buy, but it is perhaps the one I will return to time after time.
False Economy was just right for me. Not too technical, but not too general. Economic history has always interested me. With economics, no one has a crystal ball to peer into the future. The past is our only clue. For economists, studying the past is important. Ben Bernanke, head of the Federal Reserve, knows as much about the Great Depression as any historian.
But economic history books can be some of the toughest to get through. Dense information must be presented. Careful analysis must be made. Comparing and contrasting different economic theories must be done in detail. Most of the time, that detail is excruciating.
Robert Samuelson's book The Great Inflation shows that. I like to read Samuelson's columns in Newsweek and the Washington Post, and I enjoyed reading his book. But it was a chore to get through. (To be quite honest, there were some parts I skipped.) Same with Lords of Finance: The Bankers Who Broke the World, a fine but occasionally tedious history of the four men who led the central banks in the US, France, England and Germany during the Great Depression.
For me, tedium was not a problem with False Economy. The book reads well, with interesting examples carefully analyzed. Each chapter takes a topic and runs with it. One example, comparing the economic histories of the United States with Argentina, appears several times in the book. The rest divides into discrete chapters.
Those without much interest in this kind of book, though, may find even False Economy a bit of a chore. As one might expect, Alan Beattie does not quite make economic history read like a good spy novel.
But he's pretty close. Certainly economic history buffs should, I think, find False Economy to be a refreshing change from our usual fare. Alan Beattie tries to teach by using surprising questions, like why doesn't Africa grow the cocaine that travels through it to Europe (it's grown in South America in countries that have the infrastructure to support it).
Unlike many books of this type, Alan Beattie does not take any particular political posture. He does not advocate for anything. His opinions come through in the book, certainly. But nothing you have to agree or disagree with. The countries and times tell their story, and you can interpret it how you wish.
My only caveat is to those who are looking for something scholarly, a book that provides the detail a student or teacher might want from an economic history. This book does not have that. It's more milk than meat. For some, that may be a reason to pass on it.
6. At the expense of growers in the United States, we import our asparagus from Peru because the US spends millions subsidizing Peru asparagus growers so they won't grow cocoa and make it into cocaine - despite the futility of efforts such as this. This chapter is full of examples from around the world of failed economic policies that gain a life of their own.
This shows a total ignorance about it, the asparagus are grown for years in the coast of Peru, the coast is mostly dessertic and irrigated only with the water of rivers coming from the Andes, asparagus are not grown by poor little farmers but by big corporations with peruvian, chilean, spanish and even north american capitals. The coca not the "cocoa" is grown in the jungle (even far from the Amazon River shores), where the weather allows it. The north american public as the rest of the public in the world buys the most competitive product, it means the cheapest and/or the best and it is just a consequence of the fact that Peru has a better weather (very slight variation of temperature in the year) then more harvests a year, the labor is far cheaper, etc, etc.
Then he says that Africa does not grown Coca because it does not have the infrastructure to do it, Oh Lord, it does not mainly because the weather is the clue, not the roads, where the coca is grown in Colombia, Bolivia and Peru, there are not roads, there are rustic paths, however, the business is still profitable because it can grow all over the year.
My advices for this guy are:
First, not only check Google Earth but buy National Geographic or the illustrated Atlas (I bet he has money to do it, I'm not sure about the time)
Second, learn another language to read articles from experts in the matter in other languages than english or you think you are the only smart guy in the world....................
How the public is cheated by guys like these?
Best for all,
Aldo (From Peru but having lived in Europe, the US and visited countries in 4 continents)