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Dangers of Unbounded Capitalism
One of the best books on the global financial crisis, Crashed by Adam Tooze slays the idea that the policy response was about the technical ability of brave officials and not bare political choices. This point, augmented with stories of deep financial integration between China, Europe and the United States, is a devastatingly insightful description but not a prescription. Although Tooze says that the story is a perennial one of instability of capitalism, he neglects history and the relatively successful way the world responded in Bretton Woods, when unstable capitalism last engulfed us in crisis.
Ten years on from the fall of the Lehman Brothers, there have been many books on the financial crisis that gripped the United States (US) and European economies after 2008. There are those by the insiders: Ben Bernanke, Mervyn King, Hank Paulson and Tim Geithner. It is hard for protagonists to tell a story that they are so connected to and so it is a relief that a few master storytellers have also come to the party like Michael Lewis with The Big Short and Charles Ferguson who wrote and directed Inside Job, one of the first films on the crisis. There is also a raft of books written for a wider audience by “public” economists like Alan Blinder, Paul Krugman, Raghuram Rajan, Nouriel Roubini, and Joseph Stiglitz. When Adam Tooze’s Crashed hit my desk, I wondered if there was room for another.
Time provides perspective. The books have generally got better. Tooze’s book is one of the last; and one of the best. It is entirely different than those that have gone before. It weaves an essentialist idea of a financial crash alongside deep private financial integration between China, Europe, and the US. He describes the financial crisis, its context, and causes with an acuity and comprehensiveness that is second to none and he writes in a style that is hospitable and exciting.
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