As we approach Christmas, we offer selections from Lowy Institute staff and Interpreter contributors for the best book they have read this year. Part 1 and 2.
Capital in the Twenty-First Century, by Thomas Piketty. Selected by Leon Berkelmans, Director of the Lowy Institute's International Economy Program.
I think the most consequential book of the year for economics was Thomas Piketty's Capital in the Twenty-First Century. I see two major contributions here.
1. Data: Piketty has been on the forefront of an international effort to collect data on inequality. In this book, he presents data on income and wealth inequality across several countries, stretching back over 100 years. For France, he can go back 200 years. This is awesome. Data collection, for a while, was not sexy economics, but that has changed. This data allow us to develop hypotheses of how the economy evolves over the very long run. While there has been some controversy about the quality of this data, which was probably inevitable, my reading is that Piketty has stared down his detractors.
2. Emphasising wealth: Piketty shows that wealth inequality was eye-wateringly high before the Great Depression. It then fell, but has been making a comeback of late. Piketty emphasises the impact this has on income inequality, and also that wealth inequality can lead to a self-perpetuating process. Simply, if the returns to capital are high enough, those who own the wealth will re-invest their earnings in ever more wealth, exacerbating inequality. This is controversial and there is much to criticise the thesis over: it ignores the role of depreciation, it does not stand up to reasonable assumptions about the diminishing return to capital and it overlooks human capital, among others. My own reading is that Piketty correctly identifies past long-run trends; whether these are important in the future is hard to tell. But he has had us thinking about a source of inequality that, hitherto, had not received much attention.
A Spy Among Friends, by Ben Macintyre. Selected by Julian Snelder, a regular contributor to The Interpreter.
A gripping book on Kim Philby, the Cold War double agent, A Spy Among Friends chronicles his intimate, treacherous friendship with fellow MI6 officer Nicholas Elliott. Read also Wilderness of Mirrors (2003), a parallel tale of CIA rivals James Angleton and Bill Harvey. The two stories entwine in the bond between Angleton and Philby, the cerebral chiefs of American and British counterintelligence respectively.
The carnage Philby's 'Cambridge ring' caused dwarfs Snowden's revelations today. Philby, communist from his student days, rose to head MI6's Soviet section, a feat of unimaginable perfidy. His betrayals condemned thousands to torture and death. Eventually, his Cambridge ring collapsed as the noose closed. This grim debacle of alcoholism, debauchery and depression crippled Western espionage for decades. Never again could trans-Atlantic reliance run so deep.
Elliott worshipped Philby until the last, devastating denouement. The paranoid genius Angleton was fooled for years. Only Harvey, the boozing Indiana gumshoe, saw through the suave Englishman's façade. How did Philby get so far? Because he was 'one of our people', unfailingly trusted by the aristocratic class ruling Britain's crumbling empire.
Hun Sen's Cambodia, by Sebastien Strangio. Selected by Elliot Brennan, a regular contributor to The Interpreter.
Sebastien Strangio, a former Phnom Penh Post journalist, gives us an excellent account of Hun Sen's long reign in Cambodia, a rule that will reach its 30-year anniversary in 2015: 'In Hun Sen's Cambodia, accountability and change always lay on the horizon. But what seemed tangible from a distance, on closer inspection very often melted into thin air.'
As Strangio notes, the world shifted its attention away from Cambodia after the fall of the Khmer Rouge. Consequently, the weight of literature on the country looks at the Khmer Rouge era. Strangio colours the tapestry of the man at the heart of modern-day Cambodia and guides us through the 'mirage' of democratic reform that Hun Sen has led.
The book makes for essential reading for Southeast Asia watchers.