Summer reading for the Australian Prime Minister

December 30, 2014

Back in mid-December, The Grattan Institute – a Melbourne-based Australian “think tank” – launched it’s annual “Summer Reading List for the Prime Minister”, which for those of you unfamiliar with Australia is Tony Abbott.

It’s a cute concept, and is based on the rationale that:

Summer is a great time to relax with friends and family, to take a holiday, to reflect on the year past – and to read. During the year it can be hard to find time for reading. Our ministers and MPs have less free time than the rest of us…. The list contains books and articles that we believe the Prime Minister – or indeed any Australian – will find stimulating over the break. They’re all good reads that say something interesting about Australia, the world and the future.

This year’s list includes five books and one article:

Fire and Ashes: Success and Failure in Politics, by Michael Ignatieff, Harvard political scientist and historian, and “failed” Canadian politician – a fascinating read for those of us who have ever entertained the thought of entering politics, with the pitfalls painfully detailed.
Anzac’s Long Shadow: The Cost of Our National Obsession, by James Brown, a defense analyst and former army officer who is critical of the ANZAC legend.
A Rightful Place: Race, Recognition and a More Complete Commonwealth, by Noel Pearson, national Indigenous leader.
The Golden Age, by Joan London, a love story set in a Perth polio clinic – a new novel.
The Wife Drought: Why Women Need Wives and Men Need Lives, by Annabel Crabb, one of Australia’s top political reporters and broadcasters, who has marked herself out as both incisive but and yet good-humoured.  The title pretty much says it all.
– “The Inequality Puzzle”, a short journal article by Lawrence H. Summers, former President of Harvard University, his review of Thomas Piketty’s “Capital in the Twenty-First Century”, published in Democracy Journal; see full article here.

I am critical of this last choice, not because I disagree with Summers, but why not recommend the whole book?  If we are going to recommend essays for our Prime Minister to read, there are many better contemporary essays than this one.  I have described this concern with inequality as a “zeitgeist moment”, with lots of attention here in Australia.  Every couple of weeks there are additional analyses.  Not long ago, Bill Gates (Microsoft founder) wrote a review of the book.  In May, The Economist summarised Piketty’s thesis in a pithy (four paragraph) article.  Also in May, The Economist explained (“Le French Touch”) why Piketty’s book is more popular in the USA and places like Australian than in his native France:  some believe that it is not sufficiently left-wing to appeal to French intellectuals.  So the last is truly an odd and misleading choice.  Isn’t the whole idea of reading books during the summer (for those too busy during the year) actually to read the whole (or most of) the book?

Enough criticism.  What would you include on your list?  And what would you nominate for your national leader’s summer list, if you live in the USA, Canada, the UK, New Zealand or elsewhere?  (Okay, it’s only summer in New Zealand at the moment, but the idea is the same.)


More on the moment of inequality: the wealth divide continues to fascinate us

July 6, 2014

Rather than decreasing in number, the flood of information on the “moment” of attention to inequality of wealth and the class divide seems to be growing.  As I write this, Thomas Piketty’s 696 page economics book Capital in the Twenty-First Century still maintains its #22 position in book sales on Amazon’s US website (along with an astonishing 799 user reviews), just ahead of Gone Girl.

Here in Australia, Oxfam has weighed in, with a webpage devoted to inequality issues and a new (June 2014) publication, entitled Still the Lucky Country? The Growing Gap Between Rich and Poor is a Gaping Hole in the G20 Agenda.  (Australia will be hosting the G-20 Leaders Summit in Brisbane on 15-16 November 2014.)

The Oxfam report’s key points:
– Extreme inequality poses a growing threat to global security and economic growth.
– Inequality is on the rise in Australia, with the richest 1% of Australians now owning the same wealth as the bottom 60% (you read that one correctly).
– The richest 85 people in the world own the same amount as half the world’s population – some 3.5 billion people.
– Australia’s richest person owns more than the bottom 10% of the population (2.27 million people), and the nine richest Australians own more than the bottom 20% (4.54 million people).
– Income inequality has been on the rise in Australia since the 1990s: in 1995, Australia had an average inequality level compared to other wealthy OECD countries. By 2010, Australia has become much less equal (based on the Gini co-efficient), even though we have had such a high-performing economy.  And this is not just left-wing assertion: it is based on the Australian Government’s Treasury report from 2013, entitled Economic Inequality in Australia by Michael Fletcher and Ben Guttman.

Clearly these trends have been evident for some time – the Treasury data covers the 15 year period to 2010.  So why now?  What is it about this point that appears to be capturing attention, not just in Australia but in the USA and in other places around the world?

In his article “Piketty v. Marx” (The New Republic, June 2014), UCLA history professor Russell Jacoby examines this phenomenon, and likens it to Allan Bloom’s 1987 book, The Closing of the American Mind: How Higher Education Has Failed Democracy and Impoverished the Souls of Today’s Students, which also “unexpectedly capture(d) the zeitgeist”. In reviewing the book for The New York Times at the time, Roger Kimball described it as filled with “pathos, erudition and penetrating insight”.   (Bloom, as we recall, was a close friend of Werner Dannhauser, and Saul Bellow wrote the introduction to his book.)

But that’s not enough.

As Jacoby writes, “Few read all of Bloom’s volume – for the good reason that it was mainly turgid – but it spoke to a moment in which many felt that liberals and leftists were wrecking American education, if not American itself”. Jacoby feels that these two books come from the same “force field”, but that “the terrain has shifted from education to economics”.

But that would not be enough to explain the popularity of this issue outside of the USA, as Bloom’s book did not have near the same impact beyond American shores.  More to the point, Jacoby writes that Piketty speaks to “the palpable upset that … societies seem increasingly rigged; that inequality is worsening and darkening our future”.

From my own PhD research on what makes a “cultural moment” – in which I investigated the reasons behind the unexpected but profound success of Mel Gibson’s 2004 film The Passion of the Christ – I concluded that a “moment” arises from a series of factors that come together at a certain point in time and build it up, almost like a wave can be exaggerated when two or more combine.  In the case of the Gibson film, the combination of the rise of political power of American evangelical Protestants (witness the 2004 re-election of George W. Bush); the concentrated, muscular and focussed influence of certain right-wing media and religious commentators; the unwillingness of the Catholic Church in the USA to criticise the film, in part a reaction to the child sex scandals that the church had been dealing with; an excellent and superbly targeted marketing campaign; and a clever publicity use of the antisemitism controversy (“see the film that the Jews don’t want you to watch”) all came together at a certain moment.  But that “moment”, as my thesis showed in depth, was primarily one in the USA, with much diminished effects outside its borders, even in Canada and certainly in Australia.

So what constitutes this “moment” of inequality? And why does this moment – unlike Bloom’s book and unlike Gibson’s film – seem to extend so fully outside of the USA? These are questions that we cannot yet answer fully.

The Closing of the American Mind book cover


The moment of economic inequality

May 20, 2014

It may very well be a zeitgeist moment.

When was the last time that a 685-page US$40 book about economics hit number one on Amazon? Probably (surely) never. Well, it’s happened just recently. The title is Capital in the Twenty-First Century, and it’s by French economist Thomas Piketty.  As I write this, it’s still number two.

The book is so popular that publisher Harvard University Press is having a hard time keeping it in bookshops. Here in Australia, it sells for $60, but all bookshops here in Sydney are out of stock. All this for an economics treatise. So far it has sold more than 300,000 hardcover copies in English (plus more than 50,000 in the original French), well exceeding the originally estimated 20,000. It’s still number one on the New York Times hardcover non-fiction list after five weeks. Even the book’s English translator, Arthur Goldhammer, is famous.

Last week’s Time magazine (that arbiter of middle-of-the-road taste, helping us to find the “cultural middle”) has decided that this is something too big to ignore: see this article by Rana Foroohar.  In short, Foroohar writes, this book:
– Proves, irrefutably and clearly, what we’ve all suspected for some time now—the rich ARE getting richer compared to everyone else, and their wealth isn’t trickling down. In fact, it’s trickling up.
– Is going to be remembered as the economic tome of our era.
– Has finally put to death, with data, the fallacies of trickle down economics and the Laffer curve, as well as the increasingly fantastical notion that we can all just bootstrap our way to the Forbes 400 list.

The thesis that Piketty shows is basically that indeed the rich are getting richer (everyone knew this, but Piketty has shown it definitively) and that debt is now flowing to the poorest. He does not use Australian data, and admittedly the situation in the USA is much worse that Australia (more on that another time; suffice to say we are more like Canada when it comes to income inequality, and less like the USA and the UK, which are both much worse), but there are enough parallels that many in Australia are taking note, starting to reference Piketty in public debates.  For a very detailed look with an Australian perspective, see Christopher Sheil’s review (May 2014) on the Evatt Foundation website:  “Astonishing but true, the biggest intellectual topic of conversation in the world today is social inequality”, he writes – although the Australian uptake has, to date, been slow.

Some helpful reading: This article in Salon relates Piketty’s thesis and Elizabeth Warren’s ideas directly to credit card debt. In this article in the New York Review of Books, economist Paul Krugman analyses where he think Piketty has it right and where he does not.

Want to start reading it now? Here is part of the Introduction of the book, on the publisher’s website.  And like the best of academics, Piketty has posted all of his data sets online so people can check them out themselves, as well as his presentation: have a look here.  Australia’s Evatt Foundation has produced a good page of links to reviews and articles about the book.

Capital in the Twenty-First Century book cover