Andrew Lilico: ‘Doughnut Economics’ by Kate Raworth

I have read many books in my life, and reviewed quite a few. I can safely say I have never hated a book more than this one. That is probably not unrelated to the fact that I doubt I have ever read a book for which I was less the target audience. And one should bear that in mind in considering what I say about it. After all, if I were a Calvinist theologian and chose to review a movie entitled ‘A pornographic proof of atheism’, would I really be entitled to declare I found its arguments weak and its conclusions shocking? As someone with a PhD in economics, head of an economics consultancy, devising policy for many governments, perhaps it should be unsurprising that I am unimpressed by a book purporting to overthrow and replace economics as we have known it?

Yet even if I tried to place myself into the mindset of a sympathetic reader I would still have to feel this book was poor. It makes assertion after assertion about economics that is simply false, and even if the initial assertion were true, what is done with that assertion would still be wrong, raising a rickety homestead of Error on a stilt-bed of Falsehood.

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This is not just an occasional problem. It is relentless throughout the book. We are told that economists regard firms as atomic units and do not seek to unpack them or look inside. Coase? Marginal costs? Theory of contracts? Economics of asymmetric information? Apparently none of these things exists. We are told that in an economics textbook the only mention of ‘power’ will be in relation to energy. Monopoly power, monopsony power, bargaining power, outside options — apparently none of these things is of any interest to economists. Perhaps most bizarrely, Raworth accuses economists of assuming and implicitly teaching that ‘a woman’s place is in the home’, a claim so frankly weird that I have no idea how to argue against it.

Her main theme is that economics teaches that maximising GDP is the sole or main goal. Well, that’s just blatantly false. Insofar as orthodox economic reasoning accepted any goal, it would be maximising ‘welfare’, and the paradigm form of utility functions includes consumption and leisure. In many advanced economies, average hours worked, for those working ‘full-time’, have fallen over many decades. Have you ever heard any economist declare this a Bad Thing? Doubtless you’ve heard economists suggest it was bad if unemployment rose or labour force participation fell, but does anyone think it’s bad if full-time hours fall, even though GDP would presumably be higher if full-time hours were longer. No. Because (inter alia) leisure is of value as well as consumption.

Now it may well have been the case that, at least for several decades from the 1930s onwards, governments sought to use economic policy to maximise GDP even if economists did not consider that their main goal. And it wasn’t merely that governments sought to grow GDP rapidly. All over the world, in major countries, they sought to grow not merely as fast as they could, but often specifically faster than the economies of their political enemies. Raworth does not ask herself the obvious question about that: why? If she had done so, she might have realised that the answer was that if you let your enemies grow faster than you for any length of time, then in an era of industrial wars you would be overtaken, militarily dominated, and then your populations would be taken as slaves by authoritarian rulers or (from the other side) exposed to the decadent immorality and depraved injustices of liberal capitalism. In Europe, if economies had failed to grow fast enough, producing mass unemployment (like the 1930s) and famine (like the 1940s), there would have been fascist coups or communist revolutions. And, oddly enough, politicians consider that kind of thing a Bad Idea.

Raworth condemns economics for seeking to produce technical methods for achieving goals independently of what those goals might be. She also condemns economists for assuming economic decision-makers are selfish. Again she’s wrong about that. Modern economics is expressed in terms of value functions where people can have whatever goals they want, and there is no assumption that those goals are solely self-interested. But as with many other issues, even if she were right about economics assuming that she’d still be wrong. She wants to say we should embed within economics goals that include reducing inequality and living sustainably on our planet. I disagree with both those. I don’t care about inequality at all and I believe humanity should seek to be a multi-planetary species within a currently economically relevant timescale, and we should be prepared to devote a non-trivial portion of the Earth’s resources to achieving that. Does the fact I don’t share her goals mean I’m not permitted to do economics and have to invent a subject of my own? Economics is, perhaps, based on the idea that we don’t all necessarily want the same things. The reason for that is: we actually don’t.

Maybe we should forgive the deep naivete and extensive errors of her discussions of the Global Financial Crisis, since her mistakes, though scarlet, are shared by so many other popular analyses of those events. But it all adds to the general sense that the reasoning is shallow and the author insufficiently informed about the subject matter to be as ambitious as she is in attempting to reinvent things she doesn’t understand.

One discussion she presented that I did find of genuine interest was where she explored the perils of seeking to price everything – e.g. if we pay children to read books, could that corrupt or replace the love of reading? Or if we charge fines for collecting children late do parents more willingly arrive late, seeing the fine as an overtime charge they’re content to pay? Her discussion of how this issue applies in Development Economics settings was quite valuable. But what made her discussion there more interesting was its more orthodox use of economic reasoning (understanding goals, collaboration and habit-formation) than her weak critiques of economics elsewhere.

This was a rare respite. Even the pictures are bad. As a project, she actually has quite a nice idea. She identifies a series of classic images she says make us inclined to think about economics a certain way and to subconsciously accept, unchallenged, assumptions about matters that are actually contentious. So she wants to replace those images with new ones. So far, so good. But what she actually does is to replace a series of elegant images that abstract away vast complexity to focus, beautifully and concisely, upon the nub of important issues with, instead, fantastically busy diagrams that create the illusion of being ‘more practical’ and ‘more realistic’ by using vast numbers of words (the ‘doughnut’ itself has 50 words on it!) and complex arrows that obscure rather than illuminating.

Economics is not in crisis and doesn’t need reinventing. It is in robust good health and producing extremely useful insights that are improving lives every day. Theoretical and applied economics grow and adapt all the time, including expanding to cover new topics such as industrial symbiosis, asteroid mining, the intellectual property implications of 3D printing, the insurance of autonomous vehicles and the pricing of publicly-available training information used by AI. Economists design auctions for carbon permits, devise progressive tax regimes that seek to address inequality, and incorporate endogenous behavioural responses into epidemiological models. Economics helps you achieve your goals whatever they are, progressive or liberal, authoritarian or communitarian, Earth-preserving or Martian-terraforming-focused.

We don’t need to reinvent economics. We just need to understand it properly and apply it correctly and with imagination. Unfortunately, reading this book will not help you to achieve any of that.

‘Doughnut Economics: Seven Ways to Think Like a 21st-Century Economist’ by Kate Raworth was published in 2018 by Penguin (ISBN: 9781847941398). 384p

Richard Godden: ‘Capitalism and Christianity: Origins, Spirit and Betrayal of the Market Economy’, by Luigino Bruni

In Capitalism and Christianity, Luigino Bruni provides a sweeping overview of various strands of Christian thinking about economic and, to some extent, social matters over the past 2,000 years and seeks to assess their impact. The book is short, comprising only 109 pages, but it covers a significant amount of ground and needs to be read slowly and reflectively. It is not for the casual reader or someone who is only interested in down-to-earth everyday economic issues but those who are interested in the history of ideas and want to think about their impact today will find much in it that is worth pondering.

Bruni accurately describes his work as an essay and some of its strengths and weaknesses reflect its nature. In particular, Bruni does not seek carefully to support all of his assertions and many of his statements are highly contentious (e.g. is it really true that ‘Christianity was not the mass culture of the Middle Ages’, [page 90] and that ‘we had to wait until the second part of the second millennium for Christianity to become, at least a little, popular culture in the countryside’ [page 97]?). He also has a tendency to make statements that sound impressive without their meaning being clear (e.g. the statement that: ‘The medieval man was in general much poorer than we are, but he lived in a richer world, denser with life’ [page 36]) and he does not define his terms closely, the most serious omission being his failure to explain precisely what he means by ‘capitalism’. However, the other side of this point is that Bruni makes suggestive links between things that might otherwise be regarded as discrete and draws attention to long-term trends that might otherwise be missed.

He briefly considers the teaching of the New Testament but focuses primarily on that of Christian thinkers down the ages, starting with an interesting contrast between the economic thinking of Augustine and that of Pelagius before taking in that of well-known figures such as Dante, Luther, Calvin, Hobbes and Smith. There is plenty to take issue with in his analysis (e.g. his suggestion that, thanks to Hobbes, ‘European society…went from the community without individuals, to the individual without community’ [page 72], surely attributes far too much influence to Hobbes). However, much of what is said is thought provoking and a lot of it relates to matters that are only rarely covered in English language publications.

His discussion of medieval monasticism is a good example of this. He rightly points out the significance of the monasteries to the medieval economy and the long-term impact of the Benedictine motto ‘Ora et Labora’ (prayer and work), particularly as taken up and applied to everyday life in Lutheran thought. As often, Bruni is guilty of some exaggeration (e.g. the statement that ‘capitalism was not only generated by monasticism, but would not have been borne without it’, [page 14]) but his contention that, at least as originally conceived, the monastic emphasis on the value of work for a free person helped generate a wider acceptance of the value of work in society as a whole is well worth considering.

Bruni’s discussion of the late medieval Monti di Pieta is also interesting. Few Anglo-Saxon readers will know much (if anything) about them but they deserve to be taken into account in any consideration of historic models of the use of credit in the alleviation of poverty. Franciscan friars provided the impetus for their creation as not-for profit organisations which, nonetheless, were not charities and which sought to make credit available to the poor whilst still charging interest and seeking sustainability in their business model. Bruni clearly sees some lessons for today in this model, although he does not give detail of precisely what these lessons might be.

It is also good to see a discussion of the now largely forgotten contribution of Jansenists to the theological and economic debate. Jansenist theology was in many ways similar to Calvinism (albeit located within Catholicism) and it is interesting that it produced some recognisably similar economic thinking. This in some ways anticipated Adam Smith and classical liberal economics. For example, Pierre Nicole, writing a hundred years before Adam Smith, noted that those who served travellers did not act from charity but nonetheless provided the assistance that travellers required, whilst Pierre Boisguilbert, writing slightly later, commented that ‘All the trade of the land, both wholesale and retail…is governed by nothing but the interests of entrepreneurs who have never thought of doing someone a favour’ (cited by Bruni on page 60).

Bruni is Professor of Economics at the Università di Roma LUMSA, which states that it was ‘formed on Catholic principles’ and, in some places, his Catholic background shines through his writing. However his views on the impact of Catholicism on economics will not make comfortable reading for many of his Catholic colleagues. Although he is critical of the impact of the Reformation, he reserves his most strident criticism for the Counter-Reformation. He attacks both its theology and practices (suggesting that it was so concerned to react against Luther that it failed to deal with the aspects of Catholicism that were the most in need of true reform [page 44]) and sees its influence on the economy in almost wholly negative terms: ‘the Counter-Reformation blocked the process which had started in the middle-ages and which resulted in civil humanism, a capitalism that was both personalist and communitarian, which was able to fuse together individual freedom and common good’ (page 87) and ‘the Counter-Reformation set the moral evaluation of economic activities back a few centuries’ (page 88). Overall, he has very little positive to say about the contribution of Christian thought to appropriate economic structures over the past few hundred years.

It is less easy to be sure of what Bruni favours. He often quotes other authors without being clear of the extent to which he agrees with them. However, he is no other-worldly theorist. For example, he refers to ‘An entirely biblical and evangelical secularity…which still leaves all those who (like me) believe that there are few things more “spiritual” than double-entry method and a construction site, breathless’ (page 24). Furthermore, his most favourable tone is reserved for what he refers to as ‘civil economy’. He quotes at length from Fénelon’s ‘Les Abeilles’ (the precursor of Mandeville’s more famous Fable of the Bees) and he contrasts what he understands Adam Smith to be saying unfavourably with a different approach in which ‘the fundamentally economic principle…is instead that of “mutual assistance”, where each individual, in addition to his own interest, intentionally wishes for the interests and well-being of the other party as well’ (page 79).

Bruni writes openly from the perspective of Catholic Southern Europe and he clearly feels personal involvement in the matters about which he is writing. Capitalism and Christianity is not a mere academic essay: Bruni cares deeply about his subject and, as the book draws towards its conclusion, he begins from time to time to write in the first person.

Sadly, he is not able to offer much hope for himself or others. Referring to the people of the South (and, one suspects, primarily, Italy), the book concludes: ‘the capitalism of the nineteenth and twentieth centuries, the capitalism based on the factory and labour, could not then be seductive enough to buy our souls. But that of the twenty first century based all on consumption and finance, seduced us to a point that we did not need to buy our souls because we gave them for free’ (sic; page 108).

This is perhaps a surprising conclusion, especially from a writer who clearly regards Augustinian theology as much too pessimistic about human nature. It may be influenced by the slightly Romantic tendency that may be detected in some of what Bruni says. However, Bruni might fairly counter by saying that his essay is not intended to offer a way forward but merely to enable people to think about how we have arrived where we are and thus be able to pose questions that will facilitate the fashioning of the future.

Much of what Bruni says is contentious and one might take strong exception to his negative assessment of particularly early Protestant thinking, Adam Smith’s views and more recent Catholic social teaching. However, the issues that he raises deserve careful reflection and Capitalism and Christianity is a serious and worthwhile contribution to a vital debate.


Capitalism and Christianity: Origins, Spirit and Betrayal of the Market Economy’ by Luigino Bruni was published in 2024 by Routledge (ISBN: 978-1-03-252401-6). 109pp

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.





John Kroencke: ‘Not the End of the World: How We Can Be the First Generation to Build a Sustainable Planet’, by Hannah Ritchie

Opening the newspaper or watching the news can lead one to think that the environment is doomed. A litany of isolated images (polar bears drowning or forests being cut down) are seared into many minds. People have a difficult time putting these isolated images into context and knowing whether the pervasive doomsday rhetoric is well founded. In her Not the End of the World: How to be the First Generation to Build a Sustainable Planet (2024), Hannah Ritchie deftly cuts through the informational fog surrounding much popular environmental thinking.

The overriding thesis of the book is that many misunderstand the basic pattern of environmental harms over time and that this misunderstanding leads to false trade-offs that risk both environmental and humanitarian harm. Environmental degradation is deeply troubling, but in nearly all areas the pace of harm is slowing; in some cases, things are improving dramatically.

Per capita carbon emissions have peaked (page 75); forests in Europe have rebounded since the 19th century (page 118); the air is less polluted in the developed world and even Beijing (page 38). Technical innovations and targeted solutions (often aided by well-informed policy decisions) have proven successes that shouldn’t be ignored. The author is at pains throughout to not appear as a climate change sceptic or Panglossian and roots her claims in simple empirical claims. 

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Ritchie was trained in the natural sciences and now works for Our World in Data, the indispensable Oxford organization that collects data on all sorts of things and gives users the ability to create their own custom charts. The data that she brings to bear on environmental questions will shock most readers.

The book is divided into eight chapters (and an introduction and conclusion) which range from the scene-setting chapter on sustainability to more focused chapters on biodiversity and plastics. There is a chapter on climate change, but this subject is also woven through most of the other chapters. The book is distinct from others on the topic by the clarity of its purpose and the breadth of information it brings to bear on the issues which are often discussed in alarming bits of isolated information. The breadth of information and nuanced argument on climate change both makes the book more interesting and makes the most important topic difficult to summarize in this review.

The clarity of purpose I mention is interesting because most of the broader argument of the book follows from the perhaps under-argued philosophical approach in the beginning of the book. The argument has to do with the focus of her first chapter: sustainability. On page 17, Ritchie writes:

In 1987, the UN defined sustainable development as ‘meeting the needs of the present without compromising the ability of future generations to meet their own needs’. That definition has two halves. The first is making sure that everyone in the world today – the present generations – can live a good and healthy life. The second half is about making sure that we live in a way that doesn’t degrade the environment for future generations.

She further adds that, ‘on a moral level, I cannot ignore the first half of the equation. A world full of avoidable human suffering does not meet our definition of sustainability’ (page 18).

It is also in the first chapter that Ritchie dismisses both depopulation (for obvious reasons) and degrowth as reasonable options. The argument for degrowth is first complicated by the fact that while growth increases environmental harms initially, the accompanying technological innovation and care about environmental harms increase beyond a certain point of wealth, lowering the impact per person (page 34).

Additionally– even ignoring dynamic effects– there is very clearly not enough to redistribute. With egalitarian redistribution the world economy would have to quintuple for every person on the planet to be as well off as the average Dane. For every person to reach the line of poverty in the developed world ($30 a day), the world economy would have to double (pages 34-35). 

Most of the chapters begin with a shocking misleading headline that Ritchie contextualizes. For example, she begins the chapter on ocean plastics with a quote from the Washington Post claiming that ‘By 2050, there will be more plastic than fish in the world’s oceans, study says’ (page223). This statistic went viral in 2016 but is quickly undermined by Ritchie. The claim stems from a report from that year took two pieces of academic research and extrapolated their findings to the year 2050. Neither researcher endorsed this reading and the researcher on the number of fish in the sea even found different results when he revisited his own study. Similar stories abound for topics like deforestation and soil degradation.

In the introduction, Ritchie argues that these kind of headlines – and especially the more apocalyptic ones about climate change – manage to both undermine the credibility of scientists with the public and paralyze (or radicalize) those most concerned about the environment.

The book is organized in a way that sets the broader issues assessed in each chapter in the author’s own experiences and past mistaken beliefs. While sometimes annoying, this humanizes the issues. It is compelling to see that a motivated environmentalist trained in the natural sciences used to not just recite but believe and act according to the very notions she discredits now. It also leads readers to buy into her claims about the sorts of individual actions that can actually have a positive impact.

Seven of the eight chapters include a section detailing things to stress less about (the exception being the chapter on biodiversity that suggests that many worry too little about the topic). For instance, the chapter on plastics suggests that many worry too much about single use plastics like bags and especially plastic straws. Similarly, in the chapter on food production, she touts the benefits of plastic packaging on other serious environmental harms like the spoilage of carbon intense food. Approximately four percent of the carbon emissions of food comes from packaging (page 190). The real harm of plastics is when they enter our rivers and oceans. Of the 350 million tonnes of plastic waste generated per year, approximately one million tonnes of it enter oceans and virtually none of it is from countries like the UK (page 232). The solution to this in other countries is sealed landfills. Landfills are another thing we should worry less about. The idea that there isn’t enough space for landfills is hilarious when dealing with relevant numbers. All the plastic produced in history would fit in a landfill of normal depth covering 0.001 percent of the size of the world (page 253).

Ritchie argues that misunderstandings about environmental impacts lead people to do unintentional harm. For instance, in the chapter on food Ritchie relates the story of one her environmentalist lecturers at Edinburgh ordering lamb instead of chicken because it was raised locally (page 183). While its location means that fewer emissions were used between farm and table, the carbon impact of consuming lamb over chicken far exceeds the relatively small carbon impact of the transportation. 

I was struck by the example of palm oil. While decried for being the driver of deforestation, palm oil is much less land intensive than nearly all relevant substitutes. Even focusing on tropical forests – for the reason that the land used to grow palm oil is often more biodiverse than other types of land – the most relevant substitute is coconut oil, which uses more tropical land for the same amount of oil. Ritchie estimates that the ecologically minded Ben & Jerry’s uses five to ten times the amount of land because of the switch from palm oils to coconut and soybean oils (page 130). While palm oil is viewed by the public as the least environmentally friendly oil, the boycott of it likely leads to a worse environmental impact.

More than just being rife with interesting facts, this book is an excellent and accessible introduction to the very broad topic. The author pulls together enlightening data and clear argumentation to put humane bounds on the types of environmental actions we should consider morally desirable.  


‘Not the End of the World: How to be the First Generation to Build a Sustainable Planet’ by Hannah Ritchie was published in 2024 by Vintage (9781784745004). 352 pp.

John Kroencke is a Senior Research Fellow at the Centre for Enterprise, Markets and Ethics. For more information about John please click here.








Andrew Packman: “Capitalism: The Story Behind the Word” by Michael Sonenscher

Michael Sonenscher suggests that while capitalism is ‘hard to define’ it is ‘easy to see’ reflecting the ‘range of subjects encompassed in the word’ (page viii). In this tightly written book, he both explains the origins of the word and the historic tension between capitalism and capital. The word has its roots in the ‘capitalistes’ who had lent to finance the wars fought by the French state and so were ‘stockholders rather than capitalists’ (page xii). ‘Capitalism’ as a term grew in popularity after the 1830 revolution, and was associated with ideas of positive and negative liberty and the concern that capitalism led to a level of inequality which could only be resolved by revolution.

Sonenscher argues that the ubiquitous and often confused modern use of ‘capitalism’ has conflated the discussion of what in the eighteenth and nineteenth centuries were thought of as separate concepts. Starting with Adam Smith, Sonenscher identifies the linked concepts of the division of labour and of ‘commercial society’ as being of particular significance (pages 3-6). Once the form of society had developed so that a man’s needs were provided by exchange rather than his own labour, that exchange was dependent on the existence of markets and so ‘commercial society’ was formed. Capital was not the ‘initial or primary component’ of a commercial society – it came next (page 5). This leads him to argue that ‘capitalism’ is not a synonym for ‘commercial society’ and that there is much to be gained from considering them separately (page 7). He points out that capital can be formed in a predatory society by simply taking it; the division of labour is not needed to achieve this. On this basis, the division of labour is the ‘novelty’ which was the basis of commercial society. That required markets and prices which he describes as ‘relentless and remorseless’ which, unlike capital, ‘are not the types of things that can really be owned’ (page 11).

By contrast, ‘capitalism’ as originally understood was a theory of property and one which he suggests may be ‘more fluid than it looks’ (page 14). Property can be socialised while the challenges which flow from the division of labour are more difficult to address. While property can be owned in a variety of ways, a price has only one form. This leads to the view that ‘capitalism’ has unhelpfully come to encompass the division of labour so that while there have been many studies of political systems in capitalist societies, there has been much less thought given to politics in a commercial society (page 16).

Sonenscher divides his book in two parts: problems and solutions. The first is a discussion of how these issues were discussed in the first half of the nineteenth century, arguing that the idea of commercial society turned over time into the problem of capitalism. The second looks at how the challenges of politics in a commercial society were analysed before the idea was subsumed within ‘capitalism’. A key concern among French political economists following 1830 was whether capitalism was compatible with liberty. It was feared that unbounded capitalism would generate levels of inequality that would be inconsistent with justice. Explaining its roots in the financing of war he suggests that ‘capitalism’ acquired its meaning as those ideas moved from an international to a national setting. This built on the belief in France developed by Louis de Bonald and Charles Montesquieu that a commercial society based on consensus could not co-exist with a political society based on union. The idea of capitalism moved politically from the right to the left with the distinction made between the need for capital, and capitalism as a system, joined with a debate over the right to work. This led to Louis Blanc’s ideas about the use of public debt to finance welfare and of using publicly owned capital to defeat capitalism (pages 66-73).

In the second part of the book, Sonenscher considers how political economists from Karl Marx and Adam Smith to Georg Hegel, David Ricardo and Lorenz von Stein approached these issues. The previous discussion provides a new perspective on Marx’s thinking on the relationship between property and the division of labour (page 78). He suggests that there was no ‘Adam Smith problem’, as envisaged in Germany, as his theories of justice and expediency can be reconciled. Hegel’s focus on the role of public authority, and the associated role of public debt and the concept of civil society, built on Rousseau and Montesquieu but also on the thought of Adam Smith. Ricardo’s work on comparative advantage is suggested to be connected to the role of money and debt, while Stein’s focus was on the state’s ability to raise public debt as a means to reconcile the state and civil society (page 150, page 162-164). He concludes by explaining that while capitalism has its origins in a theory of property, the concept of a commercial society, based on the division of labour, was that of a society where individuals are ‘radically dependent on one another’ (page 169).  While capitalism was thought to have the capacity for catastrophe, there are alternatives (even if experience suggests they may be unattractive). By comparison, the division of labour is ‘worse’. Once people have become dependent on each other, alternative models are hard to imagine. In that context, the understanding that ‘capitalism’ has come to encompass the division of labour is more than semantics or arcane intellectual history.

This book not only provides a compelling introduction to the distinction between capitalism and commercial society but to a world of intellectual debate which is now little known. While Marx, Hegel, Adam Smith and Ricardo are reasonably widely understood, this book draws attention to a school of French writers such as Louis de Bonald, Louis Blanc and Frederic Bastiat who are generally less widely read, at least by an Anglophone audience. It has the great merit of clarity of argument and is an accessible introduction to a set of issues which can be complex and where there is a formidable body of literature. Excellent notes and bibliography provide a basis for further reading.

Given this book is aimed at the general reader a few more general thoughts arise. While Marx receives attention, it is perhaps briefer than might be expected which at least might deserve explanation. It might also be of interest to understand whether and if so how, the French writers of the first half of the nineteenth century responded to the growing significance of joint stock companies. Finally, a brief glossary might aid a reader new to these issues.

This is an excellent introduction to a complex area of intellectual history. Clearly written and helpfully setting out the argument at the outset, it is a model for an academic introducing challenging ideas to a wider audience. Sonenscher subtitled his work, ‘The story behind the word’ but provides an engaging introduction to a body of work which demonstrates an impressive rigour of analysis; delivering more than he promises in an age of publishing hyperbole is particularly welcome.


‘Capitalism: The Story Behind the Word’, by Michael Sonenscher, was published in 2022 by Princeton University Press (ISBN 9780691238883). 225pp.

Andrew spent his career with PricewaterhouseCoopers where he was a partner for more than 25 years. He led a variety of the firm’s businesses both in the UK and globally, with a focus on the pharmaceutical industry. He also led the firm’s work on explaining corporate taxation to civil society and the public. He is now studying for a masters in history which he combines with being a trustee at the London Handel Society. 









Neil Jordan: “Capitalism for Realists: Virtues and Vices for the Modern Economy” by Tibor Rutar

When we consider the evident benefits of capitalism in its capacity to generate wealth and lift people out of poverty, and contrast this with the failure of attempts to implement socialism, we might ask ourselves why Marxist thought continues to exercise such influence. This is the question with which Tibor Rutar (Assistant Professor at the University of Maribor) opens Capitalism for Realists. His answer is that the appeal of Marxism appears to lie in its theoretically grounded criticisms of capitalism – criticisms that might very well ring true for those who do not directly feel its benefits. Nevertheless, the author points out, the more poignant criticisms of capitalism are not unique to Marxism and might just as easily be reached from other theoretical positions. Accordingly, the aim of this book is not to offer an ideologically driven attack on capitalism – or necessarily to defend it – but to provide a balanced reckoning based on the available (quantitative) evidence. What follows is a fairly involved and detailed examination of the statistical information relating to the debates that surround capitalism in connection with issues such as wealth and poverty, inequality, exploitation, morality and politics.

The first chapter considers the origins of capitalism and in place of cultural explanations such as Weber’s ‘Protestant Ethic’ thesis, offers a materialist account that attributes the emergence of capitalism in England to the massive population decline caused by the Black Death, a situation that gave rise to a market for land leases and labour as land became vacant and landowners sought to retain peasants on their demesnes in order to mitigate economic losses. Thus, whatever the role of ‘ideational’ changes such as the Protestant Reformation, it was English material conditions that ‘set the scene’ for the transition to capitalism. The argument in this chapter is compelling and interesting to follow, but I was left wondering what capitalism is taken to be in the author’s view. As a very broad term, it can often encompass vastly different phenomena – a point that the author himself makes about ‘neoliberalism’ – and it would have been useful from the outset to have a definition of what the author was seeking to analyse throughout the book.

Subsequent chapters consider the criticisms commonly levelled at capitalism. In the chapter on poverty, inequality and exploitation, the author points out that capitalism has reduced extreme poverty but does not distribute the wealth that it creates equally. While the picture painted by the data is not uniform, Rutar’s analysis suggests that over longer periods of time, inequalities in wealth within countries are increasing. However, he is quick to highlight the fact that the growing wealth of the rich does not mean that the poor are getting poorer, though he does urge us to remember that rising inequalities can and do result in various societal problems which should not be ignored. While rejecting the classical Marxist position on exploitation, the author’s suggestion is that some (wage) exploitation is likely to exist in any economic system and in capitalist economies cannot be eliminated by market competition for labour alone. However, a difficulty with the treatment of this subject is that it is not quite clear what Rutar intends by ‘exploitation’: whether the mere fact of companies paying employees less than the full value of their labour when estimated as a financial contribution to the company, or the more sinister, deliberate attempt to suppress wages in order to maximise profits. The former is open to question as a definition of exploitation, since it is unclear whether the financial contribution of workers can be calculated with any accuracy; the latter more obviously runs counter to our ideas of a just wage.

The following chapter considers ‘neoliberalism’, a term that is often used pejoratively but, as the author rightly states, lacks any clear definition. In view of this, his focus is on those generally accepted features of neoliberalism that lend themselves to empirical investigation, such as support for free markets and modest welfare states. The analysis leads to the view that as the world has become more neoliberal over the last forty years, poverty has been reduced and material prosperity increased, with no apparent fall in overall government spending, no destruction of welfare provision and broad stability (or increases) in tax revenues. Moreover, capitalist societies appear to be conducive to the emergence and development of democratic orders. Thus, contrary to the charges levelled at it by its critics, neoliberalism has surely been an economic success.

I was particularly interested in the chapter on morality, which the author begins by contrasting the ‘classical’ view that commerce leads to gentler manners, greater co-operation and trust, with the anti-capitalist position that capitalism, as a system based on competition and profit, surely appeals to our most selfish tendencies, eroding trust and leading us to see others as mere means. From surveying the existing evidence, Rutar concludes that capitalist societies are certainly not inimical to the emergence of more moral conduct and in fact show greater levels of trust, whilst exposure to market competition appears to boost co-operation and fairness. At the state level, the data suggests an incompatibility between economic liberalisation and human rights abuses, and that wealthier states with complex economies characteristic of capitalism are less likely to suffer political coups.

It is clear, given his focus on measurable, quantifiable phenomena, that what the author is (understandably) concerned with in this chapter is not morality understood as personal virtue or vice, but what we might call pro-social attitudes and behaviours. Indeed, the book does not take up questions of value, except insofar as it is implied that capitalist economics can be said to embody a set of values, such as a belief in property rights and economic liberty, and a conviction that material prosperity is a ‘good thing’ for all. However, if capitalism appears consistent with – if not an actual cause of – pro-social, tolerant, moral conduct, we might wonder where this leaves its critics. Given the nature of their criticisms, it would be foolish to assume that they do not also value pro-social behaviours, co-operation, trust and prosperity. We are left to conclude, therefore, that they believe either that such things are only realised in spite of capitalist systems (contrary to the evidence presented in this book), or, since capitalism increases overall material prosperity but does not close the wealth gap, that they are not realised to the degree or in the manner desired.

The short concluding chapter discusses the environment and rejects the idea that there is something inherent in capitalism that results in environmental degradation, such that protecting the environment necessitates a shift to some form of socialism. At the same time, the data analysed does not suggest that market solutions alone will do enough to deal with the environmental problems that we face, resulting in Rutar’s recommendation that at this stage, greater regulation is required.

What ultimately emerges from Capitalism for Realists is that, when one considers the available data, capitalism’s critics are often wide of the mark. Indeed, it would appear that in some cases, capitalism is often correlated with (and is perhaps the cause of) the very opposite of the faults of which it is accused. The writing is accessible in the main, though the numerous typographical errors can be distracting and are indicative of poor copy-editing on the part of the publisher. Some of the more detailed statistical discussions can be hard to follow, but this evidence is fundamental to the book’s very project of offering a realistic rather than an ideological assessment. Overall, this is a fairly specialist work which offers a nuanced, balanced, evidence-based analysis of how the modern economy works and what its effects might be.


Capitalism for Realists: Virtues and Vices for the Modern Economy’ by Tibor Rutar, was published in 2022 by Routledge (ISBN: 978-1-32-30592-9). 178pp.

Neil Jordan is Senior Editor at the Centre for Enterprise, Markets and Ethics. For more information about Neil please click here.









Andrei Rogobete: “Capitalism Without Capital” by Jonathan Haskel & Stian Westlake

“Capitalism Without Capital” is an ambitious attempt to go beyond the regular quasi-investment-type advice and explore some of the more profound trends that have occurred in the macro landscape of (mostly) developed western markets. The book hones in on one such major trend, that is, the gradual growth and influence of intangible assets in company valuations and their subsequent effects on equity valuations and the broader economy. The overarching thesis of the book is that “…there is something fundamentally different about intangible investment, and that understanding the move to intangible investment helps us understand some of the key issues facing us today: innovation and growth, inequality, the role of management, and financial and policy reform” (page 7). The authors argue that the two fundamental differences brought on by intangible assets are, (1) we are trying to measure capitalism without counting all the capital and (2), intangible asset rich economies behave differently from their tangible-rich counterparts (ibid).

Jonathan Haskel is Professor of Economics at Imperial College Business School, he is also an external member of the Bank of England’s Monetary Policy Committee. Stian Westlake is Executive Chair of the Economic and Social Research Council (ESRC). The book is aimed at the enquiring reader though it is perhaps more suited for an enquiring reader who also has a specific interest in the world of equity investments and financial markets. Toward this end, the book does require some basic literacy in finance and macroeconomics even though it does not make excessive use of technical jargon. However, some chapters (such as Ch. 3) will clearly be of greater benefit to those that are already familiar with equity research.

The structure of the book is divided into ten chapters. Chapters I to IV focus on the growth of intangible assets, the different methodologies for measuring them and some of the unique economic properties that intangible assets possess. Here the authors claim ‘four S’s’ which they refer back to at various points throughout the book. These stand for the fact that intangible assets are “more likely to be scalable, their costs are more likely to be sunk, and they are inclined to have spillovers and to exhibit synergies with each other” (page 58).

Two interesting observations are worth mentioning here. First, it may come as no surprise that scalability is an underlying feature of intangible assets whereby, unlike their physical counterparts, “…intangible assets, […] can usually be used over and over, in multiple places at the same time. […] [and] at relatively little cost” (page 65). This in turn, gives rise to at least three rather problematic consequences: 1. Intangible-intensive businesses tend to become quite large (the authors use Microsoft, Facebook and Google as examples – page 67). 2. They tend to dominate their respective markets and smaller players may try their luck but usually fail to survive within this oligopolistic competitive environment. 3. Competitors that do to go against highly scalable assets are often left in the difficult second position within a winner-takes-all scenario, leaving the runners-up with very little (page 68).

A second interesting observation is the issue of spillovers. Here the authors point out that high-value intangibles are likely to ‘spillover’ and be replicated or used by other businesses. For instance, it was only after the release of the first iPhone that most other smartphone manufacturers started making devices that look almost identical to the iPhone (page 72). This is problematic for a number of reasons which are enumerated within the chapter (pages 77-79) but chief among these is that spillovers can have a constraining effect on business investment – particularly in key areas such as R&D (ibid).

Chapters V through X move the discussion on to the consequences of the intangible economy. Here the authors argue that the rise of intangibles may play a role in the “…puzzling fall in investment and productivity growth seen in major economies in recent years” (page 91). One of the several arguments put fourth is that the dominance of a few major actors in the marketplace “…raises the productivity and profits gap between the leaders and the laggard firms. This could help explain how low levels of investment coexist with high rates of return…” (page 116).

The final chapters focus on some possible ways forward in terms of policy and wider market action. The author proposes a shift in “…the public policy agenda” where the focus should be on “…facilitating knowledge infrastructure – such as education, Internet and communications technology, urban planning, and public science spending…” (page 241). Good intentions but one cannot help but feel that the proposals put fourth will ultimately struggle to solve the issues raised by intangibles.

 There are also other perhaps more contentious points within the book. For instance, the discussion on intangibles and the rise of inequality in Chapter 6 will no doubt raise eyebrows amongst readers. The authors draw a string of rather naïve socioeconomic conclusions, from overestimating the attractiveness of large urban cities (if anything, the post-Covid trend has been quite the opposite), to far-flung connections in claiming that Brexit voters and Trump supporters are more likely to “…score low on tests for the psychological trait of openness to experience. Openness to experience seems to be important for the kind of symbolic-analysis jobs that proliferate as intangibles become more common” (page 143), therefore contributing to increasing inequality. In their defence however, the authors make an admission in the concluding chapter of the book that their analysis of the implications for the wider economy “…is inevitably speculative” (page 242).

In summary, despite some shortcomings there is a lot to applaud within the book. It establishes a novel case for the rise of intangible assets and why they matter and brings a compelling perspective on the implications of the intangible asset economy. Although the enquiring reader may find much use within its pages, the book is really best suited for those with a specific interest in company valuations (fundamental equity research), macro trends, and the wider world of investment and asset management.



Capitalism Without Capital: The Rise of the Intangible Economy by Jonathan Haskel & Stian Westlake was first published in 2018 by Princeton University Press (ISBN 9780691183299, 0691183295), 296pp.

Andrei E. Rogobete is Associate Director at the Centre for Enterprise, Markets & Ethics. For more information about Andrei please click here.


Richard Godden: “Global Discord” by Paul Tucker

Global Discord does not fit neatly into any of the categories of book that are reviewed on this website. It is not primarily a book about business, capitalism or wealth and poverty. In fact, it is not primarily about economics. However, its focus is on something of crucial importance to all of these things: the global political order. Its author, Paul Tucker, the former Deputy Governor of the Bank of England, suggests that “the deep architecture of the international economy [is] influx for the first time in decades” (page 3) and he sets out to analyse both the causes of this and potential responses to it.

He never expressly identifies his intended audience. The primary audience is doubtless those responsible for formulating the policies of Western nations in relation to international affairs, including, in particular, international finance and trade. The issues that he discusses are, however, of crucial importance to a far wider audience. Unfortunately, the book is dense and heavy going in parts. This will limit its appeal but those who take the trouble to study it carefully will find it rewarding, particularly if they seek to reflect on how his suggested approaches to international engagement might be applied in their corner of the global political, financial or business world.

Tucker identifies three major differences between the kind of globalisation that we are now witnessing and that which existed in the past: first, derivative markets have separated cross-border flows of funds from flows of risk; secondly, after accumulating vast sovereign wealth funds, some states have acquired great influence in global capital allocation and, taken with state-owned enterprises, state-capitalist actors are operating on a scale that has not been seen “since Europe’s merchant companies traded and intervened around the planet half a millennium ago” (page 7); and, thirdly, today’s infrastructure for cross-border financial transactions create vulnerabilities that can be weaponised.

Tucker suggests that there is “a deep cleavage in modern international affairs” (page 78) and his overwhelming concern is China. He argues that the West needs to face up to the fact that, far from China moving in the direction of a liberal economic and political order, it is moving in precisely the opposite direction. Quoting the now well-known “Seven No’s” of the Chinese Central Committee, he points out that, “While Western states took different paths to [wielding power across their territories, the Rule of Law, and accountability], for China the destination is different” (page 220). Thus he argues, surely correctly, that “commentators in the West who insist current tensions are not ideological – and should not be allowed to become so – are deeply mistaken, while nevertheless pressing an important practical question: What to do?” (page 461).

He repeatedly accuses Western policy makers of wishful thinking in their dealings with authoritarian states and China in particular and he has many criticisms of current global institutions pointing to both specific design flaws and more general issues. Some of these criticisms relate to specific institutions: he describes the second Basel Capital Accord as “deeply flawed” (page 98) and suggests that the WTO is based on unrealistic universalistic rather than pluralistic concepts. Other criticisms are more general: he points to the hazards of delegation to international organisations, particularly in a world in which international treaties are what economists call “incomplete contracts”, and the dangers of what he refers to as “judicialization”.

His concern in relation to the latter is that international courts and tribunals are ruling on matters that ought to be left to political negotiation and are applying interpretations of treaties and even “natural law” concepts in a way that results in states being bound by things to which they do not believe they ever agreed. Some might argue that this is simply the concept of the Rule of Law applied in an international context but, as is the case in relation to some domestic systems (e.g. the role of the Supreme Court in the USA), it gives rise to a situation that is dangerously close to the Rule of Judges. In short, it is an example of judicial overreach and it has potentially serious political consequences for the perceived legitimacy of the world order, particularly when set against the context of the ideological divide to which Tucker draws attention.

Much of what Tucker says is thus critical of the existing order and those who have contributed to its creation. However, Global Discord is not a negative, destructive book. Tucker’s main aim is to assist in the building of a new global order that is based on coherence defensible principles whilst being capable of surviving in the real world. To this end he devotes a lot of space to analysing the theory of international relations and he suggests that we need to contemplate four broad scenarios for the next quarter to half century: “Lingering Status Quo (continuing US international leadership); Superpower Struggle (the scenario most resembling the long eighteenth century’s French-British contest); New Cold War (autarkic rival blocks); and Reshaped World Order (more Vienna 1815 than Washington 1990)” (page 115).

Against this background, he moves to more specific, concrete issues. The final part of the book includes chapters on the international economic system, the IMF and the international monetary order, the WTO and the system for international trade, preferential trade pacts and bilateral investment treaties and Basel and the international financial system, and the book concludes with an eight page appendix setting out, in numbered pithy points, Tucker’s suggested principles for constitutional democracies participating and delegating in an international system. No-one can accuse Tucker of merely dealing in abstract theory!

Tucker describes his approach as “realist” in the sense that it is “not a morality-first account deriving duties, rights, and legitimation principles from fundamental, externally given, universal principles, with some kind of morality system providing ultimate foundations” (page 268). However, he suggests that his approach does not “consign moral values to the side lines” since it requires “sociability with path-dependent, problem-solving norms, which leaves something to be said about the sources or mechanisms of normativity” (page 268).

Many will criticise this approach. Some will do so on the basis that it is insufficiently “realist”. Many others, especially Christians and others with strong moral compasses, will worry that morality plays an insufficient part in it and Tucker concedes that, in his view, the West has to adopt a “live and let live” policy and accept that engagement with illiberal regimes is necessary despite a possible desire to promote a universal morality-based international order.

Tucker is not a moral philosopher and he does not engage in detail with the moral issues. However, one does not have to accept moral relativism to conclude that there is a good moral case for his overall approach. A purist approach is highly unlikely to have the outcomes desired by its protagonists and could well result in outcomes that cause much suffering, whether by resulting in war or, more likely, by preventing co-operation over issues such as pandemics, mass-migration and climate change and by stifling international co-operation and trade, with the result that prosperity declines and poverty increases. Furthermore, Tucker bases his thesis on some fundamental tenets that are, at heart, moral: the desirability of peaceful co-existence; the idea that “order is not to be sniffed at: war and instability are quite a lot worse, as is fear of them” (page 323); the need to “stake out the ground that constitutional democracies should insist on to avoid sacrificing our deep domestic norms: to remain who we are” (page 356) whilst accepting that illiberal states will remain who they are; and the idea that perfection cannot be demanded, legitimacy is not binary and “Authority can be legitimate if it is the best realistically available” (page 287). Whilst this may not go far enough for some moral purists, there is, at least a strong argument to the effect that Tucker’s overall approach is likely to produce the best realistic outcome for the world political and economic order and is thus fundamentally ethically defensible.

The purists will also have difficulties with some of Tucker’s more specific statements. In particular, his suggestion that “We need to make judgements about the past only insofar as they materially affect the present (through institutions, norms, values, embedded habits, and so on)” (page 316) will not resonate well with those who are urging ever more delving into past wrongdoings. However, the purists have never explained how their approach leads to a world in which people are able to live together harmoniously and productively. Indeed, the proponents of the recent trend in legislation in the UK towards there being no time bar in relation to the raking up of the past should reflect on whether their proposals are as ethically pure as they like to believe. For example, Tucker suggests that “it is simply no good looking back to the Gulag” or various other dreadful episodes of the twentieth century (page 316) but this is precisely what the UK Prevention of Crime Act 2002 requires: it, unrealistically, regards an enterprise that has once been tainted by crime (e.g. those that benefitted from contracts with slave labour in the Gulags or those that assisted the Nazi regime) as forever tainted.

In developing his arguments, Tucker analyses in some detail different philosophical approaches to international affairs and different concepts and models of international co-operation (e.g. the nature of international law). He largely dismisses Thomas Hobbes’s extreme “realism” and criticises John Rawles’s demand for what he regards as an unrealistically “thick” and binary (“in or out”) international order, while acknowledging his debt to David Hume and Bernard Williams.

This analysis of the philosophical underpinning of Tucker’s concepts will enhance the attractiveness of Global Discord for some more academically minded readers. However, it is the primary reason why the book is dense and, in parts, heavy going. Tucker would doubtless argue that the analysis is essential to the development of his case and this is doubtless true. However, on occasions, the reader is left with the feeling that the analysis is a bit laboured and that the language could be simpler. This is a pity because it mars an otherwise excellent and important book that deserves to be widely read.


“Global Discord: values and power in a fractured world order” by Paul Tucker was published in 2022 by Princeton University Press (ISBN-13:9780691229317). 483pp.


Richard Godden is a Lawyer and has been a Partner with Linklaters for over 30 years during which time he has advised on a wide range of transactions and issues in various parts of the world.

Richard’s experience includes his time as Secretary at the UK Takeover Panel and he is currently a member of the Panel. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the firm’s Executive Committee.


Richard Godden: “Leave Me Alone and I’ll Make You Rich” by Deirdre McCloskey and Art Carden

Deirdre McCloskey’s Bourgeois Era trilogy comprises a magisterial analysis of the causes of what McCloskey calls “The Great Enrichment” (i.e. the 30+ fold increase in human material wealth since 1800). All three volumes are well worth reading but they are long – 1,700 pages in all – and thus have limited reach. Art Carden has, therefore, tried to bring McCloskey’s arguments to a wider audience. He describes Leave Me Alone and I’ll Make You Rich as “a popular riff” on McCloskey’s trilogy written by him “with McCloskey’s more or less heavy editing”. He adds that, for McCloskey’s reliance on a large body of scientific and humanistic literature, he has substituted “brief examples and quickie arguments” (page xvi).

The book is essentially an appeal for economic and political “hands-off” liberalism, which Carden makes clear is very different not just from socialism or social democracy but also from any system that imposes material restrictions on economic freedom whether of the kind advocated by the Left or that advocated by the Right. Carden (and, through him, McCloskey) thus takes on not merely those on the Left who favour big government but those on the Right who are obsessed with immigration, favour restrictions on trade or dream of some form of autarky.

In doing this, the authors challenge well-entrenched political and economic narratives and slay some long-lived sacred cows: they challenge the view that countries need to be competitive in the international market; their response to the fear that European and American incomes will fall relative to other societies is “But so what? It’s good, not bad, that other societies are also becoming rich” (page 60); and Dickens’s famous attack on northern industrialism, in his 1854 novel Hard Times, is dismissed as “muddle headed in its understanding of industry” (page 57).

The authors also take issue with the pessimism that prevails across the political spectrum, which would have us believe that things are getting worse or, at least, that the rich are getting richer at the expense of the poor getting poorer. They produce copious evidence that this is not true and that, on the contrary, “By every measure, the lives of average people – and of the poorest, too – are better than they have ever been and are rapidly getting better still” (page 16). They also assert (certainly correctly) that “the poor have been the chief beneficiaries of the Great Enrichment” (page 38), pointing out that the developments of the last 200 years have consistently brought to the poor things that were previously the preserves of the rich and quoting with approval Schumpeter’s famous comment that “The capitalist achievement does not typically consist in providing more silk stockings for queens but in bringing them within the reach of factory girls in return for steadily decreasing amounts of effort” (page 49).

The book provides a good summary of McCloskey’s persuasive arguments relating to the causes of this Great Enrichment. Separate chapters are devoted to refuting explanations based upon the availability of resources or property rights, the growth in savings or capital, access to schooling or growth in scientific knowledge, imperialism and slavery. Instead, the authors argue that the key driver of enrichment has been “a tidal wave of ingenuity” and that “the British got rich – and then Westerners and then much of the world, and all humans in the next few generations – because of a change in ethics and rhetoric and ideology” (page 86).

The authors are not materialists. Indeed they state that “Materialism…is a danger to the soul” (page 75), they attack Jeremy Bentham’s “vulgar utilitarianism” (page 159) and they will have nothing to do with “greed is good” philosophy (which they rightly point out is a travesty of the careful moral position adopted by Adam Smith, page 176). They also recognise the reality of climate change and are contemptuous of attempts of some US states to manipulate teaching so as to belittle the problem. However, they balance this by pointing out that the response of governments to some environmental problems has been counterproductive and suggesting that the market has a role to play in the solutions.

All of these points are made in ways that are accessible to most educated readers and the authors use examples and illustrations that are engaging and memorable. For example, their arguments relating to the impact of the Great Enrichment on the poor take as their starting point a performance of “Les Misérables” in Birmingham, Alabama in 2014 that was used by the local Women’s Fund as the occasion for an exhortation to the audience to “Help Women Like Fantine in Birmingham” (the impoverished Fantine being one of the musical’s main characters). The exhortation noted that the median income for a single mother with two children was then US$29,390, which McCloskey and Carden point out is between four and five and a half times higher in real terms than the average income in France in 1832 and, probably, more like eight to ten times higher than the income which a real-life Fantine would then have received.

The book thus has great strengths. However, it also has weaknesses. In particular, its style will annoy some readers. In the Preface, Carden says that the book includes “a bit of corny clowning around, in which both authors idiotically delight” (page xvi) and this together with the conversational, almost light-hearted, tone that is frequently adopted, may grate. For example, having described some of the benefits of the Great Enrichment, the books goes on “’But it has come at the expense of the world’s poor,’ you say. Crucially, we repeat, and we will say to you again and again until you confess your deep error, and stop repeating it…, no, no, no” (page 38). This kind of thing is doubtless intended to be light-hearted but it may come across as arrogant condescension.

The authors occasionally take side swipes at particular people or views. The fact that Donald Trump is one of these will doubtless please many readers but they may feel somewhat less comfortable when the target is nearer to home (e.g. the statement that the Great Enrichment didn’t occur because of “a Christianity which for some reason waited nearly two thousand years to pay off in mundane equality”, page 171). Such comments don’t assist the book’s arguments and are more likely to alienate than to persuade the uncommitted reader.

Some regrettable exaggerations and mistakes may also undermine the confidence of such readers. For example, contrary to what is stated on page 127, John Newton was not a Quaker and the statement that “no one, from Aristotle to Daniel Defoe, regarded forced labour as an evil system” (page 124) is the kind of statement that might be forgivable in the course of ordinary conversation but is obviously an exaggeration.

More seriously, whilst the book points to good evidence to support its core arguments, many important points are less well-evidenced. Some of these points are peripheral to the main argument (e.g. that relating to the impact of Eudaimonism on economic growth, page 156) but others are of greater significance. In particular, readers who are supportive of extensive government intervention in the economy will doubtless note the lack of properly argued support for the authors’ dismissal of the efficacy of such intervention. This is a pity because, in recent years, many have asserted that the market is the cause of poverty or, at the very least, that the solution to poverty lies primarily in government action and it is important that this assertion be carefully analysed and its flaws exposed.

Criticism of the lack of supporting evidence may, however, be unfair. The objective of Leave Me Alone and I’ll Make You Rich is to present McCloskey’s basic theses in an accessible form and the authors’ response to this criticism would probably be to suggest that the critic read McCloskey’s underlying works.

For those who have time to do so, this would be a good suggestion. In particular, McCloskey’s Bourgeois Equality provides answers to many of the questions that Leave Me Alone And I’ll Make You Rich fails to answer. Readers who do not have the time or inclination to tackle Bourgeois Equality would, however, do well to read Leave Me Alone and I’ll Make You Rich.



“Leave Me Alone and I’ll Make You Rich” by Deirdre McCloskey and Art Carden was published in 2020 by The University of Chicago Press (ISBN-13:9780226739663). 189pp.

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 30 years during which time he has advised on a wide range of transactions and issues in various parts of the world.

Richard’s experience includes his time as Secretary at the UK Takeover Panel and he is currently a member of the Panel. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the firm’s Executive Committee.


Richard Godden: “A World of Insecurity: Democratic Disenchantment in Rich and Poor Countries” by Pranab Bardhan

The starting point of a World of Insecurity is that democracy is under threat across the world and that this threat comes from the acts of elected governments themselves and, particularly, from the rise of populist governments. This is becoming a common theme (see, for example, The Economics of Belonging. Bardhan, however, suggests that his book is different in some major ways: first, his analysis seeks to combine “the perspectives of rich industrial countries and relatively poor developing countries” (page 3); secondly, he seeks to examine not only “the large rise in inequality” but also the “distinctive problems of insecurity, both economic and cultural” (page 3); and, thirdly, he assesses what he describes as “the alternative model of authoritarian capitalism” adopted in China (page 4).

Although Bardhan’s book is not as different from others as he may believe, he sometimes brings a different perspective to problems and there is much in his analysis that is interesting. It is refreshing to read a book that avoids treating the economic problems of the West (and, in particular, those of the USA) as if they were the problems of the world and both Bardhan’s frequent references to Indian issues and his chapter analysing the Chinese experience are valuable. Furthermore, his broader perspective enables him to adopt a more nuanced approach to some policy proposals that are frequently advanced. For example, his analysis of the idea of devolving more power to local communities draws heavily on the Indian experience to present challenges to those in the West who are guilty of “communitarian romantism” (page 39); his suggestion that universal basic income may be more affordable in some middle-income countries than it is in high-income countries is worthy of consideration; and his observation that “Support for globalisation is stronger in developing than developed countries” (page 18) should give food for thought to all those who see globalisation as one of the main causes of the world’s woes.

Bardhan rightly urges that we “move beyond the overly simple and amorphous Left versus Right distinction of common ideological parlance” on the basis that it “has become quite misleading, particularly in failing to capture the multidimensionality of ideological positions” (page 102). He recognises that many so-called “right-wing” populists advocate social policies that are more commonly associated with the Left and that there are considerable divisions within both those who would regard themselves on the Left of the political spectrum and those who would regard themselves as on the Right. He himself is not easily categorised since, although he advocates many policies associated with the Left, he broadly favours free trade.

He recognises both the need to bridge ideological and social divides and that, in the kind of democracy that he favours, there will always be significant differences of opinion and, therefore, a need to compromise. He also urges that Social Democrats keep in mind that “their strength ultimately lies not in fighting battles on new frontier of identity puritanism but in finding ways of transcending the divisions of society based on identity” (page 131).

All of this is valuable but, sadly, overall the book promises more than it delivers and, as it progresses, its defects come more and more to the fore.

Despite the reasonableness of some of his statements, in many places, he uses disrespectful and dismissive language in relation to people and ideas with whom or which he disagrees. Examples include his reference to “the bullying shambolic showman Boris Johnson” (page 27), his statement that the Republican Party in the USA is “serving the interests of the business elite, whilst stoking culture wars to consolidate party votes among socially conservative lower classes” (page 30), his division of “the Right” between “greed-is-good market fundamentalists, on the one hand, and conservatives on the other, who dread the encroachments of the market on traditional family values and community dislocations” (page 114) and his gratuitous reference to “Thatcherite depredations” (page 142). Whether or not one agrees with his underlying concerns (and some clearly have an element of truth in them), this kind of language is unhelpful.

Furthermore, despite his recognition of the inadequacy of the left-right distinction, Bardhan uses it himself and leaves us in no doubt as to where his sympathies lie. For example, his comments about “closed ideological echo chambers” are directed solely at “right-wing populists” (page 130) and, although he rightly points to the toxic role of social media, he wrongly reserves his denunciation for “the right-wing troll armies”, which he believes “have been much more effective in spreading their message than the Left has been in countering the damage and spreading its own message” (page 31). Those who have been the victims of trolling by reason of their views on transgender issues and other controversial subjects and others who have been “no platformed” on account of their rejection of left-wing shibboleths will doubtless beg to differ.

Bardhan never states clearly who his target audience is. Although frequent reference is made to the research and views of other academics, A World of Insecurity is not an academic work: it has no footnotes or endnotes and many of its arguments are lacking careful support. Yet it is not the kind of book that will attract casual readers, let alone one that is likely to persuade many people to change their basic political positions. One, therefore, gains the impression that Bardhan is writing primarily for those on the Left who are in search of a programme and this impression is enforced by his tendency, particularly in the second half of the book, to speak about what “Social Democrats” should and should not do.

Some of his comments read as though they were made by a political campaign manager seeking to establish a platform for an election (e.g. “in order to differentiate its products from those on the right, social democrats have to be innovative not just ‘redistribution’ but in the sphere of production or what is sometimes called predistribution”, page 122). Furthermore, despite the devotion of a full chapter to universal basic income and adequate discussion of some other policy matters, as the book progresses, Bardhan’s policy suggestions come thick and fast and he asserts things as if they were self-evidently true and thus not needing any supporting argument (e.g. “Of course, the need for redistribution will be pressing as the pandemic exacerbates the forces of inequality in manifold ways”, page 122). The reader may thus be left with the same kind of unsatisfactory feeling that accompanies the reading of a party’s election manifesto in which the list of vague and undeveloped policy commitments leaves more questions than answers.

Some of Bardhan’s statements are extraordinary. In a throw-away comment, he states that “high tax rates on capital have the additional benefit of discouraging investment in labour-displacing automation” (page 153). Presumably he would have supported such taxes to prevent the introduction of textile machinery at the end of the eighteenth and beginning of the nineteenth centuries! He also seems to regard China’s handling of the Covid pandemic as a success story (page 64) and his suggestion that “the duality of employment opportunities in the American economy gets layered into the history of racial politics to perpetuate the rich and poor class divide as the middle vanishes” is, at best, in need of substantial qualification. The latter statement is, in any event, surprising from someone who wishes to take a global perspective and who is presumably aware that, on a global level, inequality has diminished rapidly over the past generation primarily as a result of the poor moving into “the middle”.

The defects in A World of Insecurity are disappointing because, with a less ideologically partisan approach, it could have been very interesting. As it is, those looking for a left of centre political programme that focuses on the current feeling of economic insecurity (albeit from a purely US perspective) would be better off reading The Wolf at the Door.


“A World of Insecurity: Democratic Disenchantment in Rich and Poor Countries” by Pranab Bardhan was published in 2022 by Harvard University Press (ISBN-13:9780674259843). 206pp.

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 30 years during which time he has advised on a wide range of transactions and issues in various parts of the world.

Richard’s experience includes his time as Secretary at the UK Takeover Panel and he is currently a member of the Panel. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the firm’s Executive Committee.


Richard Godden: “Spiderweb Capitalism” by Kimberly Kay Hoang

Kimberly Kay Hoang is an Associate Professor of Sociology at the University of Chicago. In Spiderweb Capitalism, she both describes and draws conclusions from her research into the way in which business is conducted in Vietnam and Myanmar. Some of her conclusions do not follow from her findings, her terminology and analysis is laden with ideology and the metaphor of a spider’s web that she uses throughout the book is ear-tingling but misleading. Nonetheless, the book should be read by everyone who wishes to be aware of the problems associated with business in emerging markets, especially those who are involved in making decisions as to what business they should conduct in such markets.

Hoang poses the question “How do global elites capitalise on risky frontier markets?” and says that her goal is “to uncover the structure of the networks… to examine the people who make and move the money around the world through offshore vehicles, and… to reveal how elites finesse the gray space between legal and illegal practices to establish significant social and political connections that allow them to exploit new frontiers” (page 2).

To this end, Hoang spent several years seeking to get under the skin of business in Vietnam and Myanmar, primarily by means of a large number of discussions (sometimes lasting many hours) with founders of businesses, investors, managers, fixers and various types of professional advisers, including people based both on-shore and off-shore. She provides interesting descriptions of her methodology, the challenges that she faced in conducting research without herself becoming implicated in illegal activity and the limitations that she laboured under. The limitations were significant but it is astonishing how much Hoang managed to persuade people to discuss with her. She ponders on the reasons why they were prepared to do this and recognises the possibility that it was of some assistance that she is a woman and may, perhaps, have been less threatening to some interviewees than a man might have been. She also notes that her University of Chicago connection may have helped since “The dominant reputation of [the University] often clouded my status as a ‘leftie sociologist’ critical of elites” (page 231).

The majority of the book comprises of descriptions she was told and otherwise found out during her research. These are grouped broadly around various topics (e.g. how deals are set up, types of corruption and bribery, and tax strategies). Hoang’s style is, at times, journalistic (e.g. “It was 5:00p.m., the sun was setting…”, page (xi)) and she tells her stories well. She also seeks to set the context of her various interviews and give insights into the life and character of the various people she encountered. This both makes her accounts more interesting and provides helpful context.

One of the strengths of her accounts is that she does not deal in caricatures. She comments that she “came to understand that [the individuals involved in emerging market business] were complex, multi-dimensional people” and that “Caricatures of them that I had read both in books and in the public media did not quite resonate with my experience spending hours talking to people” (page 169). It is in this spirit that Hoang seeks to understand how the various actors rationalise their activities and even, in some cases, compartmentalise their lives so as to keep a distance between their “playing in the gray” (as she calls their activities) and their home or other private lives. She also recognises a spectrum of willingness to play in the gray: “anti-corrupters”, “greasers” and “bribers” being among the possibilities.

Likewise, Hoang acknowledges that business activities in emerging markets are themselves legally and morally more complex than is sometimes suggested. For example, it is good to see her recognising that some complex structures serve “pragmatic functions beyond secrecy and evasion… [which] include privacy, tax concerns, finessing weak local banking institutions, off-shore arbitration, access to a wider pool of global investors, asset protection from law suits, easier off-shore exits, and the ability to send and receive payment in private through designated nominees”. She also appears to accept the difference between the ensuring of secrecy (because there is something nefarious to hide) and a desire for privacy.

Readers need to be on their guard in relation to Hoang’s use of terminology, which in some cases does not correspond to normal business usage. For example, she describes transfer pricing as an accounting practice designed “to legally write off parts of the costs of the business”, (page 126). She also quotes one of her contacts as saying that “a special purpose vehicle is a paper company set up off-shore” (page 4) and appears to have adopted this definition, which may be useful in the context in which she was operating but is a very narrow conception of a special purpose vehicle.

More seriously, Hoang sometimes fails adequately to distinguish legal from illegal activities and she has a tendency to overstatement. For example, although in one place she recognises that the limited partners of an investment entity may comprise pension funds and other institutions, she focuses on individuals who are limited partners, stating that “they are all global citizens who claim citizenship in one or two countries but regularly travel all around the world” (page 28), which is unhelpful since it does not reflect the reality of many investment funds or their investors. She also states that “the world is now divided between [High Net Wealth Individuals] and poor people across developed, emerging, and frontier markets around the world” (page 19), which is an extraordinary statement bearing in mind that the growth of the middle class has been one of the most notable features of economic development in South, South East and East Asia over the past generation.

Statements such as this point to the more fundamental problems with Hoang’s book. She has conducted research into a particular type of business in two emerging markets but she wants to draw conclusions of much broader applicability. Some of her conclusions may be correct but her evidence does not demonstrate this. Myanmar is by no means a typical emerging market and, although Vietnam may be regarded as more typical, it has a particular history. It is probable that some practices in these countries are replicated in other places (e.g. Sub-Saharan Africa), but it is dangerous to make assumptions in relation to this. Hoang makes clear that cultural factors play an important part in the way in which business is conducted and one should not automatically assume that business practices are the same in places where the cultures are radically different.

Furthermore, one should not assume that the practices that are prevalent in relation to business start-ups and early-stage external investment in businesses prevail in relation to more mature businesses, particularly those which have major international funds and corporations among their investors. Hoang at times appears to recognise this (e.g. she notes that the people she was dealing with were involved in business ventures that were too small generally to hit the headlines and that businesses tend to spend time cleaning up their practices and accounting prior to moving on to the later stages of their development). However, this does not prevent her making sweeping contentious generalisations.

She says that her goal is to “give global capital a face” (page 9, emphasis original) and she seems to believe, without supporting evidence, that what she has found is representative of global capitalism as a whole. For example, she states that frontier markets “illustrate how most capital accumulation takes off through a set of transactions that are often considered corrupt and dirty” (page 10), which is a grave exaggeration. Likewise, she constantly refers to “global elites” as if they comprise the people she is studying whereas, in fact, many of these people could not by any stretch of the imagination be described as “elite” and the majority of those who may properly be regarded as the “elites” have very little to do with the kinds of investments that Hoang has studied.

All of this seems to be associated with Hoang’s ideological commitments. These are manifest in her use of loaded language, of which the metaphor of “spiderweb capitalism” is the most obvious example. She presses this analogy, suggesting that there are both “dominant spiders” and “subordinate spiders” and that “Some spiders build and repair the web, some subdue and organise the prey, still others work to keep the place clean” (page 22). Even more memorably, she asserts that “the ‘prey’ in spiderweb capitalism encompasses the public and all those who are snared in these capital webs” (page 24). This type of language may be picturesque but it is not what one would expect in an academic work and it obscures rather than illuminates the complexity of the relationships and activities that Hoang is analysing.

Much of what Hoang has uncovered is blatantly illegal or, at the very least, highly morally dubious and it undermines economies and healthy social structures. Many people will doubtless say that she merely confirms what they already knew or suspected but her findings nonetheless deserve to be studied carefully, particularly by western investors and professionals, some of whom may be tempted either to close their eyes to what is going on or naively to assume that all is well when it is not. Ultimately, however, Hoang appears to get carried away by her own metaphor and exaggerations.

Her ten page conclusion builds up to a crescendo that bears little connection to the preceding research. She asserts that “One consequence of these massive webs is the growing economic inequality between the rich and poor globally” (page 220), which accords far too much importance to the types of business that she has examined; she adds “These structural webs produce intersecting consequences, including poverty, climate change and environmental damage, and the out-migration of people” (page 221), assertions for which she has presented no evidence. She concludes: “Future generations must have the creative will to build a society with policies and protections in place to save our planet, reduce inequality, and prevent most people from becoming trapped, drained, and lost in these massive spider webs” (page 221), which is a disappointingly polemical ending to some interesting and thought provoking research.


Spiderweb Capitalism by Kimberly K Hoang was published in 2022 by Princeton University Press (ISBN: 978-0-691-22911-9). 240pp, plus notes.

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 30 years during which time he has advised on a wide range of transactions and issues in various parts of the world.

Richard’s experience includes his time as Secretary at the UK Takeover Panel and he is currently a member of the Panel. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the firm’s Executive Committee.





John Kroencke: “How the World Became Rich: The Historical Origins of Economic Growth” by Mark Koyama and Jared Rubin

In their recent book How the World Became Rich (published 2022), the economic historians Mark Koyama and Jared Rubin provide an accessible introduction to the best – often competing – explanations for sustained economic growth. The obvious difficulty of this approach is that it can seem scattershot, but Koyama and Rubin weave disparate threads into a cohesive lay of the land.

This is an important task. Academic economics has become increasingly inaccessible to those outside the field. The advanced methods used by practitioners on highly specific questions yield valuable insights in academic journals and books, but rarely inform popular narratives that in many cases offer more heat than light.

The book is divided into two main sections and eleven chapters. After an introductory chapter (including among other things the hockey stick graph of per capita income), the first section is divided into five chapters on the high-level explanations: geography, institutions, culture, demography, and colonisation/exploitation. The second section deftly weaves these categories of explanation and historical facts to explore four topics in chronological order: why did sustained economic growth that resulted in the world becoming rich occur first in Northwestern Europe, how was Britain’s Industrial Revolution different from what came before, the Second Industrial Revolution and the rise of the United States and Soviet Union, and Asian economic growth in the last seventy years.

The first section is as good an introduction to the existing explanations as one can hope for. In presenting these explanations, Koyama and Rubin exhibit the kind of judgement one fears they might not when they write that “the goal of this book is not to privilege our preferred theories at the expense of others” (page 10). They present the strengths of, for instance, geographical explanations for some types of variation in comparative economic development but also the obvious, fundamental problem of the timing of the rise in real incomes for geographical explanations.

On the controversial and increasingly influential debate on the role of colonisation and exploitation in the Industrial Revolution, the authors are quite firm: the most influential and most incendiary claims overpromise. Colonisation, especially in places like the Belgian Congo, terrorised and extracted wealth from natives and their land but provide little explanatory power for the great increase in the rate of innovation and real per capita income.

In the chapters on culture and institutions, the authors introduce explanations that were discounted by earlier (perhaps more familiar) materialist explanations. “To understand the causes of growth,” they summarise Douglass North as thinking “one has to study the incentives that led individuals in some societies to build factories and invest, to go to school, and to acquire new skills” (page 38). They then summarise the work of the last decades on the roles of various institutional features like the rule of law, property rights, and political institutions in economic growth.

On cultural explanations they show the weakness of broad arguments like, for instance, the supposed fundamental incompatibility of Islamic culture and economic growth while also showing the real, path-dependent effects of institutional features (like bans on printing presses, and the ability to use slave soldiers rather than cede power to feudal lords and parliaments) themselves influenced by cultural and religious features of Islamic society (the subject of Rubin’s previous book).

This is representative of a particular strength of the book: it is supported by contemporary research on economic history both before the Industrial Revolution and outside of northwestern Europe that is little known outside the field.

The book is most interesting in the second section, particularly in chapters 7 and 8. Rather than simply dismissing geography, colonisation, or demography in some quest for a monocausal explanation, the authors weave it into their nuanced chronological narrative about first how and why sustained growth began in Britain and then how it spread until much of the world had escaped poverty.

By the 18th century, the authors argue, there were a collection of preconditions for sustained economic growth in northwestern Europe most particularly in the Netherlands and Britain. For instance, many of the common institutional explanations for “Why Britain?” also apply to the Netherlands. These explanations are not wrong in the sense that they were necessary, but they were obviously not sufficient for the increase in commercially important innovations and then the resulting rise in real income per person. Among other things they show that, compared to the Netherlands, Britain was better able to fund wars (and therefore not smother economic growth with high rates of taxation) and better able to reform institutions to sustain an unprecedented rate of economically viable commercial innovation (as distinct from scientific discoveries, many of which were made elsewhere).

Drawing on recent research they show two of the main explanations for how Britain stood apart and turned these preconditions into innovation and industrialisation. Past periods of rising incomes were snuffed out by Malthusian dynamics (discussed in Chapter 5) and they stress the crucial difference in the 18th and 19th century Britain that allowed escape: “Above all else, the major revolutionary change during the Industrial Revolution was an increase in the rate of innovation” (page 150). One theory of this increase is a more materialist theory about it being the rational response to relatively high labour costs and relatively low energy costs. The second is more dependent on specific ideas and cultural attitudes about innovation, science, and human progress. While these ideas may have been widespread throughout Europe, only Britain had both the skilled craftsmen that industrial innovation required and the institutional preconditions.

Britain’s Industrial Revolution started the climb out of widespread poverty with positive knock-on effects for the rest of the world, but its cause is not the only important question covered in the second section. In the span of just 40 pages Koyama and Rubin race (perhaps too quickly) through the resulting benefits of innovation and industrialisation in Britain and then the (uneven) global diffusion of economic growth.

The authors rightly stress the important distinction between innovations, which determine economic growth at the frontier, and the diffusion of these productivity-enhancing innovations, which determines the ability of less developed countries to catch up with the wealthiest ones. Catch up growth is not simply a question of adopting new technologies, but rather (among other things) having the right set of institutions to enable their adoption. Chapter 10 delves some of the examples of successful convergence emphasising the culturally and politically contingent nature of reforms that enable it (and the past barriers to convergence).

Koyama and Rubin have managed to condense these and other issues into just 240 pages. This is mostly for the better. However, the limited length and scope of the work necessarily rules out a rich, compelling historical narrative. The prose does not stir and some conceptual references could be better explained, but these criticisms are insignificant compared to the successes of what the book does do. Its own claims and its assessments of existing work will be interesting to a wide range of readers.

Others may be disappointed by the lack of easy answers for the remainder of the world that still struggles with extreme poverty:

“We know what has worked in various historical contexts. But merely transplanting what worked elsewhere to poverty-stricken societies isn’t the solution. Context matters. Culture and the historical past matter. So do demography and geography” (page 224).

Koyama and Rubin don’t offer an easy answer; they offer to introduce readers to the best ideas surrounding some of the most important questions in human history.


“How the World Became Rich: The Historical Origins of Economic Growth” by Mark Koyama and Jared Rubin was published in 2022 by Polity Press (ISBN 13: 9781509540235). 259pp.

John Kroencke is a Senior Research Fellow at the Centre for Enterprise, Markets and Ethics. For more information about John please click here.





Kaetana Numa: “In Defense of Public Debt” by Barry Eichengreen et al.

Barry Eichengreen is Professor of Economics and Political Science at the University of California, Berkeley. His economic and economic history research focuses on monetary and financial systems, and he is an author of over 20 books, among them Golden Fetters: The Gold Standard and the Great Depression, 1919–1939, Globalizing Capital: A History of the International Monetary System, and The European Economy since 1945: Coordinated Capitalism and Beyond.

Eichengreen’s and his co-authors’ In Defense of Public Debt is organised into 14 chapters, tracing the history of public debt from its earliest origins in the Greek city–states and the Roman Republic, and arriving at the Covid economic scene (the book was published in September 2021). Each chapter focuses on a specific time period with its particular theme and relevant cases studies. For example, Chapter 3 “States and the Limits of Borrowing” recounts the fiscal and political developments primarily in the European states in the sixteenth–eighteenth centuries that augmented commitment to repay debts and enabled more borrowing; it also identifies certain ‘impediments’ (such as fiscal decentralization and competition) that limited states’ abilities to borrow more.

The book reads like a history of public debt, and in that respect, it presents a thorough historical account of the topic. In addition to analysing the overall levels of public debt, the authors also examine the development of the actual methods of public borrowing, creditors’ rights and representation, and the role of banks and various intermediaries. Readers may be pleased to find that the history of taxation and monetary systems are interwoven into this historical narrative of public debt.

In the introduction chapter, the authors promised to give a “balanced account” of public debt; curiously, “balanced” was meant as “placing more weight on the positive aspects than is typical of the literature” (page 5). Even so, the positive aspects put forward in this book are often vague. There is surprisingly little discussion of the use and efficiency of public debt, beyond the general recognition that states have historically relied on borrowing to fund wars, invest in infrastructure, social services, and, more recently, to bail out the financial sector and bankroll public services during a pandemic. The readers are expected to take it for granted that debt is used to fund vital causes. Yet are all uses of debt equally sound and defensible? This question is mostly ignored, except for some hints that spending on general consumption would not be as desirable as spending on investment. It admits that even though budget surpluses should be pursued to reduce debt when the economy is growing, this is difficult to achieve in practice. When it comes to generating primary surpluses, the book’s proposed answer is always higher tax, rather than spending cuts.

Eichengreen’s book leaves one with an impression that there is economic evidence of a positive relationship between public debt and economic growth. This relationship is meant to act as a “positive feedback” in the economic growth models, whereby “The link from public debt and its role in financial development to faster growth, and from faster growth back to financial deepening and economic development, is just such a feedback” (page 212). Among other things, we learn that with respect to foreign borrowing in the nineteenth century, “Countries that borrowed more invested more and grew faster on average, suggesting that issuing sovereign debt paid” (page 7), with a concession in the Notes section that evidence of a positive link “is weaker for the twentieth century” (page 228). However, a more balanced account of public debt would have had to mention the ample economic evidence of a negative relationship between high levels of public debt and economic performance. For example, most recent economic studies on this subject identified a negative link between high public debt and economic growth; there is also a tipping point threshold (in the range of 70% to 100% of GDP) when debt begins to have a significantly detrimental effect on growth (see, for example, De Rugy, V. and Salmon, J. Debt and Growth: A Decade of Studies).

This is not to say that Eichengreen’s book does not mention any negative aspects of public debt, as it does recount examples of heavy interest payments, defaults, and, in worst cases, loss of sovereignty. Yet even though the various debt default episodes make for interesting reading, they ignore the subsequent harm caused to society, and do not show the full extent of the social and economic miseries experienced during such episodes. Moreover, the negative aspects are often presented as examples of debt mismanagement or perils of public debt, even though they could in fact point to more systemic issues.

The question of morality of accumulating public debt does appear towards the end of this book, yet the moral arguments against public debt, as well as those making these arguments, are presented here in a dismissive tone: “They fret”, “worry”, “complain” (page 181). Readers appreciating the vital link between market and ethics may find it strange to see moral objections to public debt being dismissed outright as not belonging to the economic realm, with the authors suggesting that “there was also another view, in which debt was viewed in economic rather than moralistic terms, and where its issuance was seen as a solution to problems, not as their source” (page 182). Yet as already noted above, plenty of recent economic evidence shows high levels of public debt having a detrimental effect on economic performance; thus, even when analysed in economic terms, debt is hardly a solution. Meanwhile, moral issues stemming from public debt, such as the distributional and intergenerational justice issues, raise serious dilemmas that deserve to be answered.

The lack of a response to these moral arguments is but one of the questions left unanswered. Another one, just as problematic, relates to how to deal with rising debt in the future. This book does not engage with the alarming long–term projections of public debt. For example, the UK public sector net debt as a share of GDP is forecast to quadruple by 2070 to 418% of GDP (Office for Budget Responsibility Fiscal Sustainability Report – July 2020). Developed countries will be faced with growing social security and healthcare costs (which have not been pre–funded and are further hampered by unfavourable demographic circumstances), raising more issues for the policymakers. Even with respect to the immediate public debt situation, Eichengreen’s book concedes “there are no simple solutions” (page 223), noting the possibility of runaway inflation (even though the book was sceptical about such a development), the dangers of higher interest rates, and the limited prospects of economic growth or budget surpluses.

Unfortunately, the fears of sharp inflation and rising interest rates have already materialised by mid–2022. This brings us back to the moral issues with debt, namely, to the responsibility of architects of fiscal and monetary policy for the economic pain presently being inflicted upon the wider society. Eichengreen’s book referred to debt as a temptation to which politicians may succumb to. This demonstrates that there is more to public debt than pure economics, and that those seeking a way out of the looming debt crisis should not dismiss the ethical arguments against public debt after all.

Those looking for a truly balanced account of public debt will need to look elsewhere but there is much of value in this book for those interested in economic history.


“In Defense of Public Debt” by Barry Eichengreen, Asmaa El–Ganainy, Rui Esteves and Kris James Mitchener was published in 2021 by Oxford University Press (ISBN-13: 9780197577899).  320pp.

Kaetana Numa, PhD is Research Fellow at the Centre for the Study of Governance and Society, King’s College London.






Richard Godden: “The Economics of Belonging” by Martin Sandbu

Martin Sandbu’s basic thesis in The Economics of Belonging is simple: Western liberal democracy (essentially, the post Second World War socio-economic model) is under threat from within, owing to a significant proportion of western electors losing confidence in it; this loss of confidence is caused by the erosion of a sense of economic belonging, which is the result of decades of economic mis-management by Western governments; and, if the threat is to be dealt with, these governments need to adopt a package of policies radically different from those that have been adopted to date.

The book is sub-titled “A radical plan to win back the left behind and achieve prosperity for all” and, having spent five chapters setting out and defending his view of what has gone wrong, in the remainder of the book, Sandbu sets out a long list of ideas for dealing with the issue he has identified: the establishment of what he calls a “high pressure economy” (involving fiscal and monetary policy designed to keep demand pressure high and other policies to secure high minimum wages); the introduction of universal basic income (UBI); the introduction of a meaningful wealth tax; the removal of tax relief for debt; the strengthening of collective bargaining (including giving unions bargaining rights on behalf of non-members); the provision of significant subsidies to disadvantaged regions; and a host of other, less dramatic, initiatives. He commends governments which, during the Covid pandemic, pursued policies “bolder than anything ever seen in peacetime” (page xii) and his only criticism of the asset purchase programme of the past decade is that it has not gone far enough. He wants more of the same sorts of economic stimuli and much more besides.

Sandbu is a Financial Times journalist and, although the book does not indicate its target audience, it gives the impression that it is aimed at the kind of people who might read the FT. They are certainly the kind of people who are likely to enjoy, and potentially benefit, from reading it. Economists will not find much new in it and, conversely, those who are not used to thinking about socio-economic matters may struggle with some of the analysis. However, non-specialists who are used to thinking about such matters should find it a worthwhile read especially since it deals with an issue that should be a great concern to anyone who values Western liberal democracy: the concern that Western electorates might become so discontented that they themselves destroy it.

This is not to say that the book can be given an unequivocal recommendation. It needs to come with a health warning: Sandbu writes well and with great conviction and there is a danger that readers will fail to notice leaps of logic and inadequately supported assertions that litter the book. Paradoxically, this danger is particularly acute because Sandbu commendably frequently mentions at least some of the main concerns about his proposed policies. The problem is that it is easy to miss the fact that, having raised some concerns, he often does not deal with them adequately or does not mention other material concerns. For example, although he acknowledges that there is risk associated with his proposed “high pressure economy”, he does not properly examine the nature and extent of this risk (e.g. the serious role of inflation and its consequences) let alone discuss how it can be mitigated. Furthermore, he never considers the issues associated with the transition from existing policies to those proposed by him. Those in the UK who remember Chancellor Anthony Barber’s “dash for growth” in the early 1970s or who have reflected on the impact of Kwasi Kwarteng’s disastrous recent budget will recognise that these are serious omissions.

In some cases, the absence of adequate analysis of potential issues results in Sandbu’s proposals seeming to be surprisingly naïve. For example, his arguments for the UBI are interesting and worth considering. However, his defence against the counter-argument that its cost would be exorbitant is that previous calculations have shown that a basic income of £6,700 for a couple with two children could be provided by abolishing tax-free income tax allowance (page 120). This may be true but Sandbu fails to explain how a basic income of this amount would provide the economic security that he is seeking.

Another example of apparent naivety is provided by his suggestions relating to collective bargaining and the role of trade unions. He acknowledges that the role of trade unions has not always been beneficial and that they can be a barrier to change and he recognises that what is needed is unions that “function well” (page 122). However, he fails to explain how it is that this can be secured. Once again, those with long memories will wonder how his proposals would avoid a return to the industrial paralysis of the 1970s in the UK.

On occasions, the book contains hints of romanticism or, at least, rose tinted spectacles. President Roosevelt and the post-war politico-economic consensus are its particular heroes. In fact, a reader who is unaware of post war history could be forgiven for believing that the period from the end of the Second World War down to the last 20 or 30 years was one of universal contentment and satisfaction. Unfortunately, the social tensions, economic problems and, in particular, industrial relations chaos of the 1960s to 1980s, tell a different story. Furthermore, some of Sandbu’s proposals seem worthy rather than realistic and world changing. Among these are his proposal for community banks (page 163), which are surely never going to have more than a marginal role in the economy, and his extoling of the merits of libraries and arts institutions (page 200), which one suspects are rather too middle class to deal with the problem of belonging which Sandbu is addressing.

Perhaps the reality is that Sandbu has tried to cram too much into 239 pages, with the result that his has been guilty of superficiality and a lack of convincing analysis. This is frustrating because he commendably takes issue with those who, simplistically, see globalisation or immigration as the cause of our current problems and, taken individually, a number of his points are interesting. For example, his defence of a net wealth tax as an alternative to other taxes is worthy of consideration and Switzerland provides an example supporting Sandhu contention that his proposal is not necessarily about high taxes. Likewise, his arguments in relation to the removal of tax relief for debt are powerful are supported by a number of respected economists.

These are, however, points of detail and Sandbu is not inviting us to tinker with the detail of our existing economy but adopt his radical package of change. He is clearly convinced that he is right in advocating it but one needs to ask whether all Western governments over the past general have really been quite as stupid as he believes. It is at least worth considering whether there might be a reason why his policy prescriptions have nowhere been implemented. He admits that the problem of belonging exists in almost all Western countries (pages 58-62) despite them having pursued very different policies over the years (e.g. contrast the USA, France and Sweden). Furthermore, although Sandbu is surely right that there is a problem relating to people feeling alienated (i.e. having lost their sense of belonging) and that economic factors have played a large part in the creation of this problem, his dismissal of cultural issues as a material contributor to the problem and his assertion that, despite globalisation, the solution largely lies in the hands of national governments (page 181) may justifiably be challenged.

That said, Sandbu rightly sounds a warning siren and those who cannot accept his prescription for dealing with the current Western malaise need to ask themselves what their solution to the problem is.


“The Economics of Belonging” by Martin Sandbu was published in 2020 (the paperback edition being published with a new preface in 2022) by Princeton University Press (ISBN-13:9780691228907). 239pp.

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.




Richard Godden: “Faith, Finance, and Economy” by T. Akram and S. Rashid (eds.)

Faith, Finance, and Economy is a collection of essays broadly related to the relationship between faith and financial or economic matters. The editors state that their overall aim “is to convince the reader that faith and finance are not disjoint entities” (page 3). They do this by serving up a collection of essays that provide different examples of the connection between faith and finance rather than by developing a single theme.

The result is a fascinating miscellany containing material that should engage, and probably challenge, most people who are interested in considering the way in which faith does, or may, or should impact financial and economic and, hence, political, matters. Inevitably, however, different readers will be interested in different essays and, although the book includes chapters on some of Gandhi’s philosophical ideas, on attitudes to consumerism in Communist China, on Islamic finance and on the accommodation of faith of all kinds in the workplace, approximately half of it relates to the issue from a specifically Christian perspective, which readers may or may not find helpful.

The essays that focus on Christianity are diverse. The first two (by Ronald Sider and Anne Bradley, respectively) describe how a biblical world view can provide a framework for economic thought. Their views differ materially but both express these views in careful moderate terms and readers who are only familiar with Sider’s famous “Rich Christians in an Age of Hunger” and Bradley’s strong free market views may be surprised by the degree of convergence in what they say. For example Sider concedes basic merits of the free market, commenting that “The market mechanism of supply and demand simply works better” (page 23), adding that “always, government activity must be shaped in a way that nurtures self-sufficiency, not dependency” (page 27). Conversely, Bradley stresses inter-dependency and the dangers of greed, commenting that “The word that best describes God’s creation is inter-dependence” (page 34) and asserting that “We need a society where greed is mitigated (not fuelled by a system of incentives)” (page 44).

The essays thus help to clarify the issues on which bible-believing Christians disagree. Furthermore, all type of Christians would do well to listen to Sider’s warning that the mere fact that they seek to ground their agenda in a normative biblical framework does not guarantee that their concrete proposals will be wise and effective (page 28).

Some of the themes identified by Sider and Bradley are relevant to Heath Carter’s essay entitled “Christianity and Inequality in the Modern United States”, which describes itself as “a concise introduction to the history of social Christianity” (page 175). Unfortunately, however, despite the author’s claim to be writing history, he has produced something akin to a polemical tract, concluding “American Christians played pivotal roles in getting us into this New Gilded Age and we are in urgent need of a renewal of Christian economic thought and practices today if we are to have any hope of finding out way out” (page 192). The essay has heroes and villains, the latter comprising Christians who do not share Carter’s left-wing social gospel views. It is unlikely that it will assist readers understanding the views of those with whom they disagree or perceiving potential weaknesses in their own views.

In contrast, Michael Naughton’s essay, which brings the book to a conclusion, is balanced and carefully argued. It discusses what comprises “good wealth” from within the tradition of Catholic social teaching. Naughton separately analyses the issues of wealth creation, wealth distribution and wealth dispersion (i.e. charity) but recognises that, as he puts it, “The principal challenge is not dividing these three areas…but providing a social vision of how they are related” (page 232). Some readers may legitimately object that his essay does not advance the debate but it is nonetheless a useful reminder of the component parts of the issues involved.

Salim Rashid’s essay is the most specialist of those relating to Christian perspectives. It considers the contribution of Anglican clergy to economic thought in the 18th century. It is probably because this subject might sound dry that Rashid and his co-editor decided not to place it first in the collection but it serves well as an illustration of the book’s primary thesis and, indeed, of Rashid’s contention that “Christianity is the backbone of European economic growth” (page 108).

Rashid particularly focuses on three Anglican clergymen: George Berkeley (whose economic insights included the observation that national debt can stabilise the entire monetary system), Jonathan Swift (who established what may have been the world’s first micro credit facility) and Josiah Tucker (who raged against the economic absurdity of 18th century mercantilism and, consequently, favoured US independence at a time when many feared that it would be economically disastrous).

The essays dealing with issues unconnected with Christianity are even more diverse. Bearing in mind the importance of China and Muslim countries in the world economy today, Karl Gerth’s essay “Consumerism in Contemporary China” and Faisal Kutty’s essay “Islamic Finance, Consumer Protection and Public Policy” are well worth reading. The former comprises an interesting description of the changing policies and attitudes (official and unofficial) to consumer goods over the past 70 years of Communist rule in China; the latter explains the theological issues underlying Islamic finance and discusses some of the issues that such finance faces. Each contains surprises for those unfamiliar with the relevant subject. For example, Gerth suggests that the Mao era promoted rather than quelled consumerism and Kutty gets beyond the common view that Islamic finance is solely about dressing up interest as something else.

Akeel Bilgrami’s essay is the most philosophical of the collection. It considers the relevance of Gandhi’s thinking to the apparent conflict between equality and liberty. Bilgrami suggests that Gandhi’s conception of individual liberty as a form of self-governance and his desire to make overcoming “alienation” the chief goal of politics and social life could provide the key to resolving this conflict. He analyses Locke’s concept of liberty and the “Tragedy of the Commons” and suggests that the pursuit of an un-alienated life undermines the former and renders the latter irrelevant, claiming that even to raise the question “would my efforts and contributions to the collective cultivation (or restraint from over-cultivation) be wasted if others don’t also contribute?” is already to be thoroughly alienated (page 69).

The bringing of an Indian perspective to a debate is interesting but Bilgrami’s style is dense in places and his thesis is ultimately unconvincing. Indeed, it is legitimate, if unpopular, to ask whether Gandhi’s economic thought was ultimately damaging to the alleviation of poverty in India.

The book’s final author, David Miller, addresses a radically different subject. His essay seeks to make the case for employers embracing faith in the workplace: being, as he puts it, “faith-friendly” rather than “faith-avoiding”, “faith-tolerant” or “faith-based”. Although Miller’s contribution is in places shallow and perhaps naïve, it contains a lot of worthwhile analysis and suggestions and deserves to be considered by employers. It may be that the current catchphrase “Bring your whole self to work” may make it easier than has historically been the case for those of strong faith to be open about this (and its consequences) even if their views may not be popular.

Overall, the essays more than adequately demonstrate the relevance of faith, and more broadly, a person’s world view, to finance and economics. Politicians and economists ignore this at their – and our – peril.


“Faith, Finance, and Economy” edited by Tanweer Akram and Salim Rashid was published in 2020 by Palgrave Macmillan (Springer Nature Switzerland) (ISBN-13:9783030387860). 232pp.

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 30 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.

Richard Godden: “The Power of Creative Destruction” by P. Aghion et al.

French economist Philippe Aghion has long been associated with the model of growth through creative destruction – the so-called “Schumpeterian Paradigm”. In The Power of Creative Destruction he, together with his two French co-authors, seeks to summarise this paradigm and explain its implications. The authors believe, surely correctly, that “innovation and the diffusion of knowledge are at the heart of the growth process” (page 4) and they thus focus on the causes, impediments and consequences of innovation.

The scope of the book is vast and its pace breath-taking. The authors state that their purpose is to “Penetrate some of the great historical enigmas associated with the process of world growth… Revisit the great debates over innovation and growth in developed nations… [and] Rethink the role of the state and civil society” (page 2). The history of the world’s economy is reviewed in 20 pages and is followed by 13 further chapters dealing with issues as diverse as whether we should fear technological revolutions, whether competition is a good thing, the impact of innovation on inequality, whether developing countries can bypass industrialisation by moving immediately to a service economy, the impact of creative destruction on health and happiness, managing globalisation, the role of the state and the “golden triangle” of markets, state, and civil society. All this in 319 pages!

Inevitably, the result is broad but shallow and the reader’s reaction to it will depend upon what they are looking for. Those seeking insights based on new original research or indepth analysis of issues and carefully argued conclusions should look elsewhere, perhaps to some of Philippe Aghion’s other works; on the other hand, those who wish to think about a broad range of issues and to have some previously unexamined assumptions challenged will find the book stimulating and, probably, an inspiration for further exploration.

It is based on the authors’ lectures at the College de France and it could well serve as a student text. However, the preface strongly suggests that the real target audience is policymakers: it contains much advice, even instructions, for Western Governments, of which perhaps the most stern is that “they must accompany the process of creative destruction, without obstructing it” (page vii).

The book was written between late 2019 and mid 2020 against the background of the Covid pandemic. The authors suggest that the pandemic has acted “as a wake-up call by revealing deeper problems that plague capitalism” (page vii) and they argue that what is required is a reformation of capitalism. So many recent books have adopted this starting point that there is a danger of it being greeted with a yawn and the expectation that what will follow will comprise the standard left-wing prescription of more government intervention and redistributive taxation. However, as the emphasis on creative destruction should suggest, this is not what Philippe Aghion and his colleagues advocate.

They see a role for the state that is larger than that which many free market economists would support. In particular, they see a role for it in financing and generally promoting the development of certain technologies that might otherwise not be developed (particularly those associated with the transition to a low carbon economy). However, they accept that “Objections to industrial policy from the 1950s through to the 1980s are difficult to counter, all the more because later work, such as that of Jean-Jacques Laffont and Jean Tirole, pointed to several sources of inefficiency in state intervention” (page 68). In particular, they recognise that national industrial policy has the effect of limiting or distorting competition, that governments are not great at picking winners and that governments may be receptive to lobbying by large incumbent firms. Consequently, they recognise that we must look primarily to the market rather than to governments to secure economic prosperity.

Some parts of The Power of Creative Destruction are basic, even to the point of distortion. For example, the description of the drivers of the industrial revolution is hopelessly superficial and does not even consider the role of beliefs, ideas and culture (which Deirdre McClosky has analysed so carefully in Bourgeois Equality). There are also some irritating inaccuracies in the book. For example, James Watt did not invent the steam engine (as is stated on page 40), the wheel was not invented in China (as is wrongly stated on page 20) but most likely in Eastern Europe and there was no “year zero” (which is bizarrely referred to on both page 22 and page 26). However, these errors are minor and the book contains a lot that is of real substance. Most readers will, at the very least, find thought provoking material within it.

For example, the authors draw attention to a number of studies that should at least cause pause for thought among those who see greater equality and better social outcomes coming primarily from government action: a comparison among different American states that suggests that innovation increases “both the share of income of the richest 1% (top income in equality) and social mobility” (page 82); other evidence points to a very strong positive correlation between job creation and job destruction (i.e. that the preservation of “zombie” corporations is an obstacle to the creation of new jobs; page 214ff); and evidence from Finland suggests that parental influence remains a decisive factor in whether a child will become an innovator even in a country where the educational system is highly egalitarian and of high quality (page 199ff).

Other parts of the book presents challenges to those who favour less government intervention. For example, the authors present evidence that “strongly suggests that as a firm gains greater market power and moves towards market dominance, it focuses its efforts less and less on innovation and more and more on political connections and lobbying” (page 92). There are also some tantalisingly brief policy suggestions, perhaps the most interesting of which is the idea (originally put forward by Richard Gilbert in Innovation Matters) that antitrust authorities need to change the way that they look at mergers by not using the definition of existing markets as their loadstar and instead evaluating the extent to which a merger could discourage the entry of new innovative firms (page 123).

Much of the evidence supporting these assertions and suggestions is set out in innumerable graphs. These are interesting and informative but a few words of warning need to be sounded: the graphs require careful study and this is rendered more difficult in some cases by the inadequacies of their labelling; furthermore, in a number of cases, it is difficult properly to understand and evaluate the relevant graph without access to the book or paper from which it has been extracted.

More generally readers need to be careful that the readability of the text does not cause them to be swept along by the authors and fail to spot the points at which the evidence presented fails adequately to support the argument being made. This is not to say that the relevant arguments are wrong but merely to warn that, in many cases, the authors have not proved that they are right.

That said, The Power of Creative Destruction is a good read: it avoids overly technical language, does not assume a lot of prior knowledge, has been well translated by Jodie Cohen-Tanugi and clearly presents important ideas.


“The Power of Creative Destruction: Economic Upheaval and the Wealth of Nations” by Philippe Aghion, Céline Antonin and Simon Bunel was published in 2021 by The Belknap Press of Harvard University Press (ISBN-13:9780674971165).319pp

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.


Richard Godden: “Winners and Losers” by Diana C. Mutz

Thomas Macaulay observed that “Free trade, one of the greatest blessings which a government can confer on a people, is in almost every country unpopular.”. There is plenty of evidence to support this assertion but the reason for public hostility is less clear. What is it that impacts public opinion about trade and why is it not better liked?

Diana Mutz, Professor of Political Science and Communications at the University of Pennsylvania, has spent a number of years researching these questions in the United States and, in Winners and Losers: The psychology of foreign trade, she summarises the results of her research, considers the evidence of other researchers, draws conclusions and reflects upon their implications. She says that her “central purpose … is to bridge a gap in our understanding of the causes and consequences of American attitudes toward international trade” (page 15).

The result is both fascinating and important. All those who believe in the merits of free trade and wish to see it widely pursued by democratic countries should read what Mutz has to say.

She begins with three basic propositions, each of which she successfully justifies. First, “for most Americans, globalization is something happening ‘out there’, away from their everyday lives” (page 2). Secondly, unsurprisingly, most Americans are largely unaware of the economic arguments for and against free trade. As Mutz puts it, “few wax poetic about the wonders of the invisible hand, the efficiency of market specialization, or even the lower cost of consumer goods” (page 3). Thirdly, despite their profound ignorance, people do nonetheless hold opinions about international trade, holding “alternative, lay theories about how international trade works” (page 3).

Many economists have asserted that these home-spun theories are based on the self-interest and Milton Friedman asserted that “Complete free trade is not politically feasible … because it is only in the general interest and in no-one’s special interest”. Mutz’s research, however, provides little support for this. Instead, she suggests that public opinion is based upon sociotropic factors or what, more bluntly, might be called unsophisticated nationalism.

Mutz observes that trade is often seen in terms of competition rather than cooperation and American attitudes to trade are determined to a considerable extent by whether or not it is expected that America will be the “winner”. Furthermore, many people perceive trade as a zero sum game in relation to job gains and losses and, when coupled with uncertainty as to whether America will be the “winner”, this perception can produce highly negative attitudes to it.

Mutz suggests that people’s reasoning in relation to trade is similar to their reasoning in relation to human relationships at a personal level: “People trust people who look more like them” (page 101) and people are influenced by things as basic as who they like and who they do not like. Hence, in a survey conducted by Mutz, those who, in answer to a request to name the US’s three largest trading partners forgot Canada were less likely to support international trade than those who remembered Canada, whilst those who forgot China were more likely to support trade than those who remembered it.

Unfortunately, all of the attitudes that lead to a negative view of trade receive regular reinforcement. Mutz’s survey of references to trade in major US newspapers between 2000 and 2018 indicates that the vast majority of such references viewed trade as competition rather than cooperation; her survey of references to job losses in major US newspapers over the same period indicates that trade is frequently blamed for losses, whilst automation is very rarely blamed despite most economists believing that this is the primary cause of US manufacturing job loss; the idea of trade being a zero sum game is reinforced by concepts such as “trade deficits” and even “fair trade” (which sound, to the uninitiated, as though a fixed sized pie is being unevenly divided); and news stories reporting the benefits of free trade generally support their narrative with graphs and other impersonal material whilst those opposing it show pictures of forlorn American workers who have lost their jobs, which naturally have a bigger emotional impact. More fundamentally, Mutz points to the simplicity of the claims made by those who oppose free trade (primarily relating to job losses) in comparison to the complexity of the arguments in favour of free trade.

Mutz provides copious evidence that, overall, supports her theories. However, the book is not without flaw. Some of the numerous graphs and charts are not well labelled and space limitations have resulted in Mutz cross referring to a significant amount of online material. Readers also need to be on their guard since a number of the graphs are not based to zero, which results in differences being exaggerated (the graphs on page 127 relating to racial differences being particularly egregious examples of this). Furthermore, some of the research results, whilst statistically significant, do not suggest huge differences among different categories of people and Mutz may on occasions be guilty of over-interpreting them.

Mutz is clearly highly pro trade and moderately to the left of centre in her political views. She does not disguise her distaste for some of those who take a different view and, unfortunately, this may have distorted some of her conclusions. For example, she appears to believe that those who are pro trade are more rational than those who oppose it but this does not seem consistent with her own evidence. Thus, she comments that “protectionist attitudes in the US are driven largely by non-economic, symbolic beliefs” (page 241) apparently forgetting that the same appears to be true of attitudes that favour free trade. She also appears reluctant to acknowledge that some non-economic arguments relating to trade may be rational and reasonable. For example, no matter how pro free trade one might be, it is hard to disagree that there are downsides in trading with countries governed by authoritarian regimes and thus the apparent implication in Mutz’s comments that logical and reasonable people should favour trade with China as much as they favour trade with Canada is surely misplaced.

Mutz recognises that her findings are limited to the USA and her evidence from Canada suggests that they may not apply elsewhere. Nonetheless, the findings present those who favour free trade with a challenge: what are we to do about this? Mutz makes a number of reasonable suggestions: efforts should be made to make people realise that most job losses are not caused by trade but by automation; we need to make efforts to enable people to understand trade in terms of cooperation and to realise that it is not a zero sum game; and we need to build on the finding that the vast majority of Americans believe that trade is good for relationships with other countries. However, these suggestions are vague and do not relate closely to all of the issues that Mutz identifies.

In particular, she fails to focus adequately on her recognition that many influences on people’s attitude to free trade “pale in comparison to the impact of prospective financial concern” (page 225). The more insecure that people feel, the more they “hunker down” and one suspects that negative attitudes to trade in the USA are to a significant extent a reflection of a loss of national self-confidence and feelings of insecurity. In The Wolf at the Door, Michael Graetz and Ian Shapiro suggest that addressing this is the most important domestic challenge faced by America and it may be that, if it were adequately addressed, support for free trade would materially increase.

That said, Diana Mutz has done a great service to those who favour free trade by clarifying the causes of opposition to it. It is now up to others to work out how best to apply the implications of her research in influencing both politicians and public opinion.


“Winners and Losers” by Diana C. Mutz was published in 2021 by Princeton University Press (ISBN 978-0-691-20302-7). 275pp plus notes and bibliography.

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.



Richard Godden: “The Wealth of Religions” by R. M. McCleary and R. J. Barro

The Wealth of Religions is an unusual book. It is subtitled, “The Political Economy of Believing and Belonging” and its authors, one an economist and the other a moral philosopher (who, as it happens, are married to one another), seek to present a multidisciplinary approach to issues at the interface between religion and economics. They say that they “are interested in the economic costs and benefits of holding certain religious beliefs and the influence of those beliefs on behavior” (page 4) and that their central approach “is the application of economic and political principles to the study of religions across countries and over time” (page 9).

The book is divided into two sections: the first looks at the interplay between religion and economic growth whilst the second deals with issues associated with the connection between religion and political economy. The first takes as its starting point Max Weber’s famous argument relating to the protestant work ethic, although the authors’ arguments are not by any means identical to those of Weber; the second is particularly indebted to what the authors regard as Adam Smith’s ingenuity in applying his market model to religious goods and services “as if they were analogous to brands of toothpaste” (page 106).

The book has severe limitations. It is based on short articles published over the past couple of decades and it fails to disguise this; despite only being a short book (172 pages), there is a significant amount of repetition and there is an element of miscellany about its contents, particularly in the second section. Some of the material is frustratingly general (e.g. the section relating to the impact of religion on economic growth) whilst some of it is so specific that it will not interest many readers (e.g. the 23 page chapter relating to beatifications and canonisations by the last three popes). The result is that the book lacks an overarching argument or sense of direction, and it is unlikely that many readers will be interested in all of it.

Nonetheless, the book addresses interesting and thought provoking questions and the diversity of its material has an upside: any reader who is interested in either the interaction between economics and religion or the way in which economic concepts may have an impact upon organised religion will find something engaging in it.

This mixture of the unsatisfactory and the engaging is exemplified by the second chapter, which explores how the economy and the regulatory system influence religion in society. John Wesley famously observed that, as people become richer, they become less devout and the authors wish to test this observation (the so-called “secularisation hypothesis”). Many readers will be impatient that it takes the authors 12 pages to come to what they will regard as a blindingly obvious conclusion: “we find a strong negative effect on all measures of religiosity from higher economic development” (page 28). However, the authors also discuss some less obvious issues and reach some interesting conclusions including, contrary to the views (and perhaps hopes) of some vociferous atheists, “there is no evidence in cross-country data that more years of education reduce religiosity” (page 31).

The third chapter (relating to the impact of religion upon economic growth) is likewise a mixture of the disappointingly superficial and the tantalisingly interesting. The Weber thesis is explained and various religious views of salvation surveyed in a mere eight pages, which include some highly contentious statements (e.g. the assertion that Calvin did not believe in the possibility of assurance of salvation, which is justified by a statement in his Institutes that is taken out of context and fails to notice that, in the very same section of the Institutes, Calvin states that faith is “a firm and sure knowledge of the divine favour toward us, founded on the truth of a free promising Christ, and revealed to our minds, and sealed on our hearts, by the Holy Spirit”). However, from this unpromising start, the authors go on to discuss their own analysis of detailed international data and come up with some interesting conclusions. For example, they show that this data suggests that belief in heaven and hell (and particularly the latter) is positively correlated to economic growth but belief in God or a general posture of being religious is not. Furthermore, for any given belief in hell, an increase in monthly church attendance appears to lead to a decline in economic growth and, to put the matter the other way up, for any given church attendance, an increase in belief in hell leads to an increase in economic growth. The authors also provide a brief survey of various pieces of academic research that suggest that the oft-repeated suggestions that the positive impact of Protestantism is either associated with “belonging” or to Protestantism’s promotion of human capital via education are misconceived.

Of course, Weber’s thesis related to the impact of Christianity and, specifically Protestantism, in Europe and any globally applicable theories relating to the impact of religion on economic growth (or vice versa) need to take account of the impact of other religions. The authors recognise this issue and, to some extent, seek to address it, particularly in chapter 4, which relates to Islam and economic growth. However, these parts of the book are again superficial. The entire sweep of Islamic economic history is dealt with in 10 pages and the authors fail to provide convincing evidence of the impact of Islam on the economy; other major religions are scarcely considered. The result is that a number of major questions of significant importance in the modern world are not addressed at all (e.g. the impact of Hinduism on the economic development of India).

More generally, the application of economic concepts to organised religion, whilst potentially thought provoking, is contentious and may even be offensive to some people. For example, one does not need to be a Roman Catholic to raise eyebrows at the statement that “our assessment is that the increased numbers and geographical spread of persons named as blessed and the targeting of popular ex-Popes are clever innovations aimed at raising the enthusiasm of Catholics” (page 154); and one does not need to be a Buddhist to feel somewhat uneasy when reading the title of chapter 6: “Religious Clubs, Terrorist Organisations, and Tibetan Buddhism”. Furthermore, many Christians will consider that the “supplier and consumer” model of religion presented by the authors is indicative of precisely what is wrong with much Christianity today rather than an indication of fundamental features of its success or failure.

That said, despite all of its inadequacies, and having regard to its relative brevity, The Wealth of Religions is worth reading and, having read it, some readers may well find that there is plenty to interest them in the bibliography, which reflects the cross disciplinary nature of the book itself.


“The Wealth of Religions” by Rachel M. McCleary and Robert J. Barro was published in 2019 by Princeton University Press (ISBN – 13:9780619217109). 172pp.

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.



 Andrei Rogobete: “Democratic Capitalism at a Crossroads: Technological Change and the Future of Politics” by Charles Boix

Charles Boix is Professor of Politics and Public Affairs at Princeton University. His primary research interests are in political economy and comparative politics, with a particular emphasis on empirical democratic theory. Previous notable publications include Political Parties, Growth and Equality (Cambridge University Press, 1998), Democracy and Redistribution (Cambridge University Press, 2003), and Political Order and Inequality (Cambridge University Press, 2015).

In Democratic Capitalism at a Crossroads Charles Boix seeks to explore both the historical chapters of democratic free-market tensions and current issues facing capitalism within western democracies. The author divides the narrative into three main eras: 19th century Manchester capitalism, 20th century Detroit capitalism, and the current 21st century Silicon Valley-based model of capitalism. The final chapters consider the implications of these forms of capitalism on the future workforce, in particular with respect to automation, the rate of technological change, income distribution and politics (or the role of government more broadly).

Charles Boix’s thesis is that, “the consequences of today’s technological changes […] are not set in stone. They will work their way into the economy through their direct (although, at this point, still uncertain) impact on the demand for different types of labour and on the cost and ownership of capital.  Yet they will also depend on the institutional and political strategies we follow in response to those technological transformations” (page 3).

The book is well-written and comprehensively researched. The author does a commendable job of avoiding the clichés that often surround the topic of technology and maintains both nuance and a satisfactory degree of objectivity. We will touch upon some of the more intriguing points made throughout the book.

Chapters 1-3 explore the impact of technology on society and politics from a historical perspective. Chapter 2 dedicates a fair amount of attention (and rightly so), to the first industrial revolution. Boix points out that automatization brought by a new class of comparatively poorly skilled labour that replaced “…an old class of artisans and highly skilled operators” (page 57). In 20th Century capitalism however, the advent of technology (and automisation more specifically), led to a further replacement of low skilled workers with semi-skilled workers – albeit in much lower numbers. This new workforce of semi-skilled labour was needed to oversee, maintain, and repair the machinery in operation. Yet perhaps the most important consequence of the process of automisation was the arrival of “… new layers of white-collar, relatively well-paid jobs – from accounting departments to car dealerships” (page 59).

This in effect resulted in a new form of Corporatism whereby the relationship between employees, trade unions and the employers are far more interwoven than before. An interesting point is made in chapter 3 whereby the continual development of a company’s human capital became a vested interest for the company itself. Henry Ford for instance invested heavily in the education of his workforce. He established the Ford English School to teach English to recently arrived immigrants and he even established a “…Sociological Department, with about two hundred employees, to ensure that the family lives and overall behaviour of his factory workers did not deviate from a clear set of norms such as thriftiness, continence, and basic hygiene” (page 78).

Chapters 4-6 move the conversation to the contemporary debate around technology, artificial intelligence (AI), and its impact on the labour markets and consequently, on democracy itself. Charles Boix rightly points out the difference between simple AI and machine learning. The key form of impact here is that while computers/AI displaced routinable jobs at a large scale, they have “…hardly replaced nonroutine jobs” (page 103). Though this may be changing with machine learning.

Boix acknowledges in Chapter 6 that, ultimately, we cannot predict the impact of technological change or indeed “…depict the society it will give birth to…” (page 180). Therefore, any future policy responses must be made in a piecemeal fashion (ibid.). The chapter concludes the book with a few tentative proposals for reform. Rather unexpectedly, Universal Basic Income (UBI) is presented as one such proposal – yet the arguments made against UBI seem more convincing than those in favour. For instance, the author claims that UBI has two main advantages: “First, it may free individuals from routine, repetitive tasks, allowing them to engage in more creative and inventive professional paths. Second, it should reduce poverty and arguably, equalise conditions” (page 206). Perhaps the keywords here are ‘may’ and ‘should’ – one cannot help but feel that this is mere wishful thinking.

On the challenges of UBI, Boix acknowledges a rather lengthy list: UBI cannot be tailored to individual needs, it distorts the incentives that people have to work, it may keep the pre-existing structure of inequality in place, it reduces the need for schooling, it enables firms to offer lower wages, it affects the inner motivations and ambitions of youngsters, it can create antagonism between those that are earning against those that are not (pages 207-208). We don’t have space to go into further detail here, and surely each reader will make up their own mind – but it is a strange and slightly disappointing end to an otherwise interesting book.

In summary, Democratic Capitalism at a Crossroads is an engaging read about the impact of technological change on the transformation of labour markets, society and indeed, democratic systems themselves. It is accessible to the educated reader and while some might take issue with certain sections of the book, the author does a laudable job of curtailing his more subjective opinions by also presenting the counterarguments. One result is that some readers may find the counterarguments more compelling than the main arguments themselves (UBI is a case in point). This might not necessarily be a bad thing. The book is a recommended read to those looking to expand their knowledge of the intersection between technology, the economy, and democracy.


“Democratic Capitalism at the Crossroads” by Carles Boix was first published in 2021 by Princeton University Press, ISBN: 9780691216898, 272pp.

Andrei E. Rogobete is the Associate Director of  the Centre for Enterprise, Markets & Ethics. For more information about Andrei please click here.





“Money and the Rule of Law” by Peter J. Boettke, Alexander William Salter and Daniel J. Smith

Is the delegation of monetary policy to independent central banks that are granted constrained discretion a good or a bad thing? Most non-specialists have probably never pondered this question and many that have done so have probably concluded that it is a good thing. But is it? Peter Boettke, Alexander Salter and Daniel Smith think not and in Money and the Rule of Law they argue their case.

Parts of the book are difficult for a non-specialist to evaluate and some readers will find its US centricity unhelpful. The endless citations of previous works within the text rather than footnotes and the existence of a significant amount of repetition is also irritating. However, none of these failings should put off potential readers whether specialist or not and whether American or not. The book raises issues that deserve to be debated far more widely than they are.

The authors’ starting point comprises two points: first, that good money is essential for human flourishing and that, consequently “monetary institutions are not peripheral, but central, to human betterment” (page xi); secondly, that as Adam Smith long ago pointed out, governments have an unfortunate habit of spending in excess of revenue, accumulating these deficits into long-standing public debt and paying off the debt through the debasement of their currency. This tension creates a problem that needs to be addressed by all modern societies.

To many, the solution lies in the existence of an independent central bank because it is seen as a way of transferring control over monetary policy into the hands of experts free from government interference. Furthermore, the conferring of discretion on these experts is considered necessary in view of the balance of policy considerations involved and in order to allow flexible responses designed to preserve macroeconomic stability, particularly in a crisis.

This solution superficially appears convincing but Boettke, Salter and Smith attack it head on. First, they challenge the notion that the US Fed has contributed to macroeconomic stability saying that “the Fed’s century-long experiment with discretionary central banking is at best inconclusive, and at worst a failure” (page 147). In particular, they argue that, far from discretion being essential in a crisis, it makes matters worse, asserting that the Fed contributed to the Great Depression of the 1930s and that its interventions may have made the recession resulting from the Global Financial Crisis worse than it would otherwise have been and, at the very least, have added to moral hazard in the financial sector. These claims may be surprising to some but they are by no means self-evidently wrong and, in relation to the Great Depression at least, the authors are able to point to the support of Ben Bernanke, the former Chair of the Fed, as well as Milton Friedman and others.

The failings of the Fed and other central banks might be accepted as unfortunate but inevitable stages in their learning process but Boettke, Salter and Smith suggest that the problem is far more fundamental than this would suggest. They point to the serious problems faced by central banks including technical problems (e.g. lack of clarity as to objectives), knowledge problems (uncertainty being, as Alan Greenspan put it, “not just a pervasive feature of the monetary policy landscape but the defining characteristic of that landscape”, page 23) and incentive problems (including the internal and external pressures brought to bear on central bankers, which the authors catalogue with some enthusiasm). They recognise that some of these problems are, at least in theory, soluble but they argue that “Knowledge problems render discretionary central banking not just difficult but impossible” (page 4). Discretionary central banking fails for exactly the same reason as other forms of central economic planning in that “monetary policymakers lack a feedback mechanism that generates the requisite knowledge to maintain, or even tend towards, monetary equilibrium” (page 37).

These are important points. It is odd that the West has largely rejected central economic planning on practical as well as philosophical grounds and yet appears to believe a planned monetary system is workable and it is even more odd that, despite evidence to the contrary, many continue to believe that it is possible for central banks to fine tune the system, turning the steering wheel to adjust to unexpected irregularities of the route, to use Friedman’s analogy. Consideration of the track record of central banks and appreciation of the problems that they face might thus of themselves be sufficient to cause us to doubt the merits of discretionary central banking.

That said, the failings and problems of central banks are not the primary reason why Boettke, Salter and Smith object to discretionary banking: their primary objection is that “discretion on the part of monetary policymakers is inconsistent with basic jurisprudential tenets of post-Enlightenment political thought” (page 13). In particular, it is “incompatible with the justificatory tenets of constitutional democracy” (page 15) and “fails to adhere to the rule of law in any meaningful sense” (page 146).

These claims may seem to be extreme but they deserve close attention. A proposal to transfer control over tax policy to an independent body of experts exercising “constrained discretion” based on vague and conflicting policy objectives would doubtless be greeted with incredulity. It would be regarded as incompatible with accepted principles of democratic control and the fundamental tenet of the rule of law that “questions of legal right and liability should ordinarily be resolved by application of the law and not the exercise of discretion” as well as the principle that “the law must be accessible and so far as possible intelligible, clear and predictable” (Bingham, The Rule of Law 2010). So why is the transfer of control over monetary policy viewed differently? It may be felt that control over monetary policy is very different from control over taxation, but is it? Monetary policy has a huge indirect impact upon property rights (e.g. it may result in an arbitrary redistribution of wealth and inflation results in a form of arbitrary taxation) and central banks now exercise discretionary power over the grant of liquidity that is opaque and unconstrained by anything other than very vague principles. Furthermore, the problem has become progressively more acute as central bankers (including even the European Central Bank) have interpreted their mandates widely and changed their views as to the way in which to balance various policy objectives and as they have engaged in increasingly novel activities (e.g. the Fed is now lending directly to US corporations which represents an extraordinary lurch away from free market principles).

So how should these concerns be addressed? Unfortunately, Boettke, Salter and Smith have no precise answer to this question. They argue that central banking should be rule-based rather than discretionary and, at one point, suggest that the answer may lie in the “Richmond Fed doctrine”, which “holds that the central bank should limit itself to the creation and supply of high-powered money to the market, even during financially turbulent times” (page 118). However, they clearly recognise that this could only ever be part of the solution and they describe the conflicting views of the three leading economists who have shared their concern about central banking (Hayek, Friedman and Buchanan) without clearly expressing their own views on the relevant issues. This is a significant failing but it is only fair to point out that the authors’ illustrious predecessors also struggled at this point and changed their views radically over the course of their careers. Perhaps the only viable and effective options (e.g. potentially, Hayek’s competing currencies or Friedman’s computer automated monetary policy) are so radical and so untried in a modern context that we all find them difficult to contemplate.

In any event, Money and the Rule of Law comprises a wake-up call: we need to ask ourselves whether we are sleep-walking into an economy governed by discretionary central planning that is both economically damaging and philosophically unacceptable. The book deserves to be widely read.


“Money and the Rule of Law: Generality and Predictability in Monetary Institutions” by Peter J. Boettke, Alexander William Salter and Daniel J. Smith was published in 2021 by Cambridge University Press (ISBN 978-1-108-79084-0). 184pp.

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.







Richard Godden: “The World Made Otherwise” by Timothy J. Gorringe

The sub-title of The World Made Otherwise is “Sustaining Humanity in a Threatened World” and climate change or other environmental issues form the book’s starting point and backdrop. Gorringe sees climate change as creating a burning platform that makes thorough-going political, economic and social change imperative.

His prognosis is dire. He opines that “civilisational collapse is likely” (page 19) and that, together, environmental issues and current socio-political trends “could suggest the ‘new dark ages’ of which MacIntyre spoke nearly 40 years ago” (page 153). He asserts that the resulting problems are primarily moral and political and that “neither technological fixes nor tweaking of the present economic system are sufficient to address them” (page 117). Instead, he thinks that the heart of the problem lies in false values.

Much of Gorringe’s discussion relating to values will be widely applauded: he rejects the post-modern relativism that reduces discussions of values to discussions of psychology or sociology, confusing values with either societal norms or preferences linked to self-realisation; he defends the idea of universal values against those who would deny their existence (including those on the left who suggest that the very idea of human rights is a form of Western cultural imperialism); he also rejects “the claim of the neoliberal market to provide the fundamental standard for everything whatsoever” (page 57) and instead seeks to establish a value system based on the ultimate end or object of human life, which he suggests is, in essence, the creative fulfilment of human potential, “a fulfilment that is both individual and social” (page 85).

His discussion of the problems within the existing political, economic and social order also contains much that will command wide acceptance, albeit not much that is new. In particular, the history of the twentieth century supports the wisdom of his call for “a critical watchfulness” with regards to our political practices and his warning that “all claims for absolute allegiance on the part of the state are idolatrous” (pages 133/134). Likewise, his warning about making an idol of the market will be accepted by all but the most extreme free marketeers and his criticisms of the workings of modern democracies (including the basis on which people cast their vote, the role of the media and lobbying) ring true.

Unfortunately, however, time and again Gorringe gravely overstates his case and, whilst some parts of the book are closely argued, much of what he asserts is not backed up by detailed analysis or engagement with different views. For example, he asserts that “equality must mean equality of outcome” (page 163) on the basis of five lines of argument and he makes no effort to comprehend the practical and moral arguments for the market economy or recognise the different conceptions of justice that underly much current socio-political debate (as to which, see Capitalism and Democracy by Thomas Spragens). Furthermore, the version of the market economy that he attacks is extreme and he fails to acknowledge that one can be in favour of a market economy yet at the same time recognise the need for guiding values outside it. Instead, he makes a number of unsupported ex cathedra assertions that, on occasions, descend into mere left-wing jibes (e.g. his side swipe at “austerity” measures, which he defines as “making sure the bankers do not have to pay for their mistakes”, page 198, and his distinction between “genuine science” and “the spurious corporate-financed variety”, page 290).

The least satisfactory part of the book is its suggestions for change: they are almost totally lacking in specificity and are absurdly Utopian. Gorringe says that he is putting forward what he calls “rights cosmopolitanism”, which he describes as “a vision of a cosmopolitan world of federated states where all people enjoy basic rights and freedoms simply in view of their humanity” (page 147). However, the vision is vague and Gorringe gives no clue as to how it might be realised. He envisages the break-up of current nation states and talks of “a world of small and devolved, but often federated states, where economic and environmental rules would be worked out together and held to be binding by the United Nations and its agencies” (page 152); he suggests that “local economies will have shorter supply chains and keep real wealth within the community” and that they “will not import products they can produce for themselves or export local products until local needs have been met”, citing apparently with approval, Molly Scott Cato’s suggestion that there might be perhaps 20 bioregions forming the basis for a reformed economy with each bioregion having “the task of provisioning its inhabitants” (pages 233/234); and he advocates monetary reform. Yet his political proposals amount to little more than a vague idea relating to the creation of local deliberative assemblies; leaving aside a few specific proposals (e.g. to mutualise utilities and provide a basic citizen’s income), his economic ideas are packed into a bewildering four page section in which he advocates the localisation of economic life; and, apart from discussing a few examples of what are, in essence, local or restricted use currencies, he gives us no clear idea of what monetary reforms he is seeking.

Gorringe defends himself against the charge of being Utopian by suggesting, first, “that nothing is so wildly Utopian as to try and build a sustainable world on the basis of greed and competition” and, secondly, that his proposals “are actually being modelled on the ground the world over” (page 236) but this defence fails. The first of these points has no bearing on the realism of his proposals and the second fails to recognise that the only examples he gives of anything remotely resembling the kind of localised system that he advocates are very small scale and, as he himself recognises, have many problems.

It is difficult to know precisely who the book is aimed at. It is not an academic work yet it is overloaded with quotations from and references to the views of different authors (e.g. the main text in the first five pages of the chapter relating to values includes references to the views of no less than 15 different authors). These come so thick and fast that parts of the book are heavy-going and they are likely to render it inaccessible to many potential readers. Furthermore, Gorringe is a liberal Christian who is heavily influenced by Marxist thinking and these starting points pervade The World Made Otherwise. Gorringe makes no attempt to justify them, with the result is that the book is unlikely to prove persuasive to those who do not share his assumptions. Thus, whilst most Christians will welcome his reminder that God ultimately owns all things (a fact which necessarily relativizes property rights), his approach to Scriptural interpretation will baffle and alarm many. For example, his suggestion that “The Eucharist (when not fetishized) adumbrates as a sign the view that the world is gifted to all creatures and is to be shared equally between them” (page 224) is, to put it mildly, difficult to extract from the biblical text, whilst his assertion that Hebrews 13:14 (“Here we have no abiding city”) “promises us that Rome (which for us is neoliberalism) will not last forever” (page 66) is extraordinary.

Gorringe has, for a long time, passionately believed in the need for radical, political, economic and social change and environmental issues have added to the imperative tone of his appeals for such change. However, passion and urgency do not of themselves make up a viable political programme. Gorringe’s theological villain is clearly St. Augustine of Hippo, who he feels is responsible for generations of Christians believing that “the possibility of a truly different society… belongs only to the next life” (page 67). On this basis, one might expect him to show us the way to an earthly paradise but, despite its title, The World Made Otherwise fails to provide one and, whatever one’s political views, Gorringe’s diagnosis and prognosis are simply depressing.


The World Made Otherwise by Timothy J. Gorringe was published in 2018 by Cascade Books (ISBN: 978-1-5326-4867-0). 348 pp

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.






Richard Godden: “Capitalism and Democracy” by Thomas Spragens

Capitalism and Democracy is a short book and, as Tomas Spragens admits, it does not contain “a great deal of cutting-edge scholarship” (page vii). Nonetheless, it deserves to be widely read.

It comprises an explanation and analysis of “the sharp disagreement encountered these days between advocates of laissez-faire and champions of a more expansive welfare state” (page 10). Spragens suggests that, properly analysed, this debate involves disagreements in relation to three different issues: whether markets maximise prosperity; the moral defensibility of the distributions of resources produced by the capitalist marketplace; and whether the kind of society that free markets and minimal government produces would be a good place in which to live. Spragens analyses each of these issues in turn before attempting to draw some conclusions reflecting his own opinions.

Spragens states that his “general conviction is that reliance upon robust free markets as the principal mechanism for the allocation of a society’s economic efforts and resources is wise and proper” but goes on to say “I also believe … that governments need to regulate and supplement the distributive consequences of markets in a number of significant ways” (page 191). This view is apparent throughout the book and some readers will wish to challenge it whilst others will inevitably feel that their particular views or arguments are not accurately reflected. Nonetheless, Spragens has made a great effort fairly to present the opposing arguments in relation to each issue. He expressly disclaims having definitive answers to the issues at hand and, before expressing his own conclusions, explains why “those conclusions – and any of yours as well – have to be acknowledged as vulnerable to reasonable disagreement” (page 164). He is thus not trying to argue a specific case but rather “to narrow the geography of debate to a place where reasonable people may differ” (page 10).

In an age of political polarisation, this approach is refreshing, as is Spragens’ blunt reminder that “We cannot have it all” (page 185). However, it only takes the discussion so far. In the modern western world, the key issue is not whether there should be regulation, distribution and intervention by governments but how much regulation, distribution and intervention is necessary or desirable and Spragens has little to say about this. This points to what the book is and what it is not: it is intended to provide a framework for thinking rather than an analysis of contemporary problems and their potential solutions.

Spragens helpfully discusses what may be considered to be appropriate functions of government and suggests that “Our democratic debates … need to center on what the improvement and perfection of the mixed economy look like in concrete terms” (page 229) but he does not advance these debates (and, in the context of what he has said earlier in the book, his use of the term “perfection” may seem surprising!). Indeed, one is left with the uneasy feeling that he is broadly justifying the current balance between the laissez-faire and interventionist approaches that exists within the United States, subject to a few tweaks here and there. Essentially, his position appears to be similar to that adopted by Michael Greatz and Ian Shapiro in The Wolf at the Door (reviewed on our website) without the commendably specific proposals contained in their work.

The book is US-centric, but this is an issue to be borne in mind rather than a fundamental defect. Spragens is writing to a US audience and the arguments that he outlines and the things that he assumes reflect this. In relation to economic matters, the centre of gravity of US political debates is to the right of that in Europe. Hence, Spragens asserts that “few would challenge” the assumption that “enhancing wealth production is a good thing to seek” (page 69) whereas a European author might feel a need to defend such a proposition. Conversely, Spragens finds it necessary to explain some versions of laissez-fair philosophies that will seem extreme to European audiences. However, whilst this may result in those from Europe feeling that the book does not deal with some things that they would like to deal with, and deals with some things that they don’t consider to be relevant, it does not prevent the vast bulk of what is said being relevant to them.

Of course, it is possible to find fault with a number of things that Spragens says or does not say. Most of the issues in this respect are relatively minor but a few are more significant. For example, the book fails to analyse the distinction between society and the state and, more seriously, its discussion of the concept of “justice” lacks the precision of other parts of the book and is unsatisfactory. Spragens recognises the slipperiness of the concept and the problems in using it within the context of the laissez-faire versus intervention debate. He also draws attention to the serious problems in John Rawls’ much discussed concept of justice. However, he fails to identify clearly the major competing concepts of justice and thus to draw attention to one of the reasons that those discussing “economic justice” or “social justice” often talk past one another. From a UK Christian perspective, this is a pity because, in the UK, the concept of “social justice” is much talked about at the moment and many Christians discuss it as if their understanding of it incontrovertibly emerges from the Bible (particularly the Old Testament) without reflecting on their assumptions that underly that understanding.

Spragens seems to have sensed that there is something not entirely satisfactory about his treatment of these concepts because he returns to the subject in a four page postscript tagged on to his final chapter, which defends his “reticence to invoke social justice as an independent major basis” for the judgments and recommendations he has offered (page 230). He argues that it is “Impossible for anyone to claim convincingly that some specific distribution of resources would be entirely fair and just” having regard to the differences in people’s abilities, characters, upbringing and circumstances (page 230). He recognises that this might be seen as a counsel of despair or reflective of a lack of concern about unfairness but suggests that, in practice, for other reasons, much can be done and, indeed, is done to mitigate inequalities both at the level of government intervention and at a personal and community level.

Spragens says that he has two principal target audiences: the educated public who would like to improve their understanding of the proper role of the capitalist market place within a democratic society and college level students seeking an overview of issues that they will likely confront in economics, political science, moral philosophy and public policy courses. He may, however, have understated the range of people who will find the book of interest. At the very least, theology students should be added to the list of those who should read it and many others, who have previously thought about the issues, will benefit from a succinct overview of them.


“Capitalism and Democracy: Prosperity, Justice, and the Good Society” by Thomas A. Spragens, Jr was published in 2021 by Notre Dame Press (ISBN 978-0-268-20014-5). 234pp.

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.






Andrei Rogobete: “Free Trade Under Fire – Fifth Edition” by Douglas A. Irwin


“Free Trade Under Fire” by Douglas A. Irwin is, as the title suggests, a book on the debate and defence of international trade. It covers a wide spectrum of (sometimes sensitive) issues on the subject. From national sovereignty and trade policies, to popular misconceptions about trade, the book tackles each argument with considerable depth and backed by evidence.

Douglas Irwin is John Sloan Dickey Third Century Professor in Social Sciences at Dartmouth College. He speaks regularly on trade policy (particularly U.S trade), and writes for various news outlets including the Wall Street Journal, New York Times, and Financial Times.

It perhaps comes as no surprise that the structure and language of the book is somewhat of a hybrid between the academic and ‘professional’ spheres. In parts it reads like a handbook for postgraduate students, while in others it is more opinionated and empirically driven. Regardless, each chapter is well written and considers the various angles of approaching the subject in question.

Therefore, one aim of the book is to “…introduce the reader to some basic economic principles and empirical evidence regarding international trade and trade policies” (page 8). It also seeks to address some of the misconceptions around trade in the “…modest hope that it may improve our understanding of the trade policy issues that confront us” (page 10).

The first and second chapters look at the position of the United States within international trade and evaluates the arguments for free trade. One of the first interesting points that the author makes is highlighting how the impact of international trade is rather blown out of proportion within US public discourse: over 85% of what is consumed in America is produced in America (page 26). Foreign imports therefore only account for less than 15%. Consumption spending is even higher with around 90% being spent on domestic goods (page 27).

A second interesting point emphasises how misguided our perception of the national economic impact of buying imported goods actually is, “…we sometimes exaggerate how much of the money goes to other countries. When you buy a $100 pair of Nike shoes, only $25 goes to the Asian factory that assembles them” (page 27). The rest of the $75 is spent in the US on design, shipping, insurance, and retail costs (ibid.).

Yet beyond these misconceptions surrounding international trade, the book’s most compelling argument in favour of trade liberalisation (based on Adam Smith’s Wealth of Nations), is the specialisation, division of labour and increased productivity that naturally occur under a free trade regime between nation-states. This results in economic gains for all parties involved.

The author uses individuals as an analogy to illustrate the benefits of trade, “Most people do not produce themselves even a fraction of the goods they consume. Rather, we earn an income by specialising in certain activities and then use our earnings to purchase various goods and services. […] Like individuals, countries benefit immensely from this division of labour and enjoy higher real incomes than they would by foregoing such trade” (page 36). This relatively simple but little-known fact is critical to understanding the benefits of free trade.

Chapters three and four turn the discussion to protectionism and the impact of free trade on jobs and wages. Here the book makes an important point that seeks to explain the paradox between the gains from free trade and the controversiality in the adoption and implementation of free trade policies.

The answer lies in successfully (if that is an adequate word here) managing the short- versus long-term beneficiaries of free trade. Not all industries are impacted the same, “…in the short-run, not everyone stands to benefit from the trade policy. […] Specific groups that benefit from protectionist barriers usually exert political influence beyond their numbers” (page 104). The bottom line is that protectionist measures “… provide large benefits to a small number of people and cause a very great number of consumers a slight loss” (ibid.). Reaping the benefits of free trade often requires time and this is perhaps one of the greatest challenges for set-term elected officials that often prefer policies with a much shorter time horizon.

The final chapters look at the international free-trade system itself and the current governing bodies (e.g. the World Trade Organisation). The book concludes with re-emphasising the importance of free trade and the economic benefit it bought to quite literally, billions of people around the world (page 322).

Yet free trade also remains a contentious issue because of partisan politics. Under President Trump, the US has in many ways inclined to a protectionist approach of trade that is more rooted in populism than theory. The danger is that, as the book points out, a weakened commitment from the US for free trade will lead other countries to follow suit, “…trade policy choices that the US makes have ramifications far beyond America’s shores…” (page 319).

In concluding, “Free Trade Under Fire” by Douglas A. Irwin is a well-written, well-researched, and timely piece of work. It is excellent reading for anyone with a remote interest in free trade. The book arises multiple remaining questions and challenges for the rest of us: How can the truth about free trade be presented in a so-called, “post-truth” society? How can our elected representatives be better equipped to argue in favour of free trade when the alternative is often simpler, clearer, and electorally more attractive? How do we explain to millions that feel left out of the system that they and their families only stand to gain from free trade in the long-run?

It seems therefore that free trade is currently facing a PR problem. It has been ousted in many places by seemingly sharper nationalist rhetoric. We need to be re-educated on the matter and “Free Trade Under Fire” by Douglas A. Irwin is an excellent step in that direction.


“Free Trade Under Fire – Fifth Edition” by Douglas A. Irwin was published in 2020 by Princeton University Press, (ISBN:9780691201009, 0691201005), 352pp.


Andrei E. Rogobete is the Associate Director of  the Centre for Enterprise, Markets & Ethics. For more information about Andrei please click here.


Richard Godden: “Christianity and the New Spirit of Capitalism” by Kathryn Tanner


Christianity and the New Spirit of Capitalism is, in one sense, inspired by Max Weber’s famous suggestion that Protestant Christian beliefs gave rise to a work ethic that provided the foundation of modern capitalism. Weber believed that the Protestant ethic produced what he called the “Spirit of Capitalism” and Kathryn Tanner agrees that “religious beliefs (Christian beliefs specifically) have the capacity to provide powerful psychological sanctions for economic behavior” (page 4). She also adopts the concept of the “Spirit of Capitalism” but her aim is far removed from that of Weber: she seeks “to show how Christian beliefs … might undermine rather than support the new spirit of capitalism” (page 7).

Tanner’s thesis is that capitalism is now finance-dominated and has cultural commitments that are at odds with Christianity. She thus wants “to provide a Protestant anti-work ethic” (page 30). With this objective in mind, each chapter of her book (other than the first) comprises a description of an aspect of what Tanner considers to be the spirit of “finance-dominated capitalism” followed by a contrasting description of what she considers to be the relevant Christian philosophy. She concludes by expressing the hope that she has “shown the coherence of a whole new world to be entertained as an imaginative counter to the whole world of capitalism as it presently exists” (page 219).

A number of Tanner’s criticisms of the extremes of some forms of capitalism would be widely accepted. For example, she criticises the demand for total commitment to paid work that leaves no time for reflection, the maximising of profit at the expense of everything else, the regarding of people as mere economic property, short termism in management and the devastating social consequences of personal debt among the poor. Furthermore, many Christians and other theists will agree with her starting point in relation to commitment, identity and value: “Commitment to God and the conversion that brings it about interfere with total commitment to anything else, thereby limiting the degree to which I could ever be completely personally invested in a company’s aims” (page 86); “the tasks one undertakes at work cannot be taken to exhaust one’s identity – and should not be pursued in any all-consuming fashion that would suggest as much” (page 98); and “What matters in the end is one’s relation with God, one’s value in God’s eyes and not one’s relative worth measured against others” (page 204). Put simply, capitalism cannot be accepted as an all embracing world view.

That said, however, Tanner’s thesis does not hold together. She states that her accounts of finance-dominated capitalism and its spirit “are offered as ideal types in a Weberian sense of that phrase: that is, they are analytical constructs that accentuate certain aspects of the messy reality of the current economic and cultural scene and show how they might be brought together into relationships with an internal consistency” (page 10). However, what she offers is a muddled caricature.

She fails to distinguish between situations that are fundamentally different: comments that could only relate to investment banks are mixed in with comments that appear to relate to industrial companies without the distinction being acknowledged; she fails to distinguish between the activities and motives of market-makers and other dealers, those of corporate users of the financial markets and those of long-term investors; and comments relating to people fail to identify the exact groups to which they relate, with the result that the problems faced by professionals, other white collar workers, skilled and unskilled workers are jumbled together as though they represented problems common to the mass of humanity exposed to modern capitalism.

Many of Tanner’s statements are absurdly extreme. She makes modern corporations sound like Maoist states, commenting that “Workers themselves are to want nothing more than what corporations ask of them; their own desires are to be brought into complete compliance with finance-dominated corporate interests” (page 64) and “Workers are to be encouraged to want for themselves what the company wants from them” (page 70). It seems that corporations can do nothing right in her eyes: she laments the pushing down of responsibility for decision making, continual assessment, the use of relative rather than absolute measures of performance, the need for workers to perform increasingly complex tasks and even multi-skilling!

Her criticisms of the financial markets are similarly exaggerated. She recognises that derivatives may be a form of insurance and, on occasions, makes comments that suggest that she may have an inkling that the reality is more complex than her thesis suggests. However, she spends many pages asserting, essentially, that the financial markets are divorced from underlying economic reality and that they offer “promises of a defanged future” that “turn out to be spurious” (page 156).

Tanner is also critical of governments suggesting that they too have become finance-dominated and are reneging on “previously accepted obligations to guarantee the welfare of the population, through medical or unemployment benefits, for instance” (page 22). However, the bogeymen in relation to this are clear: she says that “government policy can easily be taken hostage by foreign investors and the increasingly few rich among its own citizens with the ability to make significant purchases of government bonds” (page 23). Absurdly, she asserts that “Only efficiently run governments, which means governments run like finance-dominated corporations so as to cut costs to the bone, are deemed credit-worthy on the open market” (page 48). If this were true then the majority of governments around the world would find it impossible to secure finance!

Many Christians will take issue with Tanner’s theology. Some aspects of this are peripheral to her thesis. However, her theology of work is central to that thesis and is highly contentious. She asserts that “there is surprisingly little reason to think Christianity has a direct interest in developing a work ethic at all” (page 198) and she rejects the idea of secular vocation (i.e. the view that “one can serve God directly in economic pursuits because those are thought to be themselves divine vocations, part of God’s specific plans for one’s life”, page 200). Unfortunately, once again, she caricatures the view that she is criticising and never engages properly with the arguments in its favour. She asserts that “The problem with direct assignment of religious value to economic pursuits is that it provides religious sanction for whatever form of employment society happens to saddle one with, no matter how limiting or degrading” (page 201), which is blatantly untrue of most forms of the Protestant work ethic. She then justifies her “anti-work ethic” on the basis that one’s individual worth comes from God and not from comparison with other people, which is true but beside the point.

She never engages with the statements of Jesus and St. Paul and other biblical writers that appear to ascribe real value to secular work (e.g. “Whatever you do, work at it with all your heart, as working for the Lord, not human masters”, Colossians 3:23, NIV). She also asserts that “God…does not create and save people for the sake of some objective they are tasked with pursuing” (page 206) without engaging properly with parts of the Bible that appear to assert that part of the objective of creation and redemption is productive work. She says that “there was no need for extreme effort in Eden before the disordering of the world as God intended it” (page 207) and appears to believe that she has thereby demonstrated that those who appeal to the Genesis account in support of the Protestant work ethic are wrong. However, the inclusion of the word “extreme” results in her attacking an Aunt Sally. She does not deal with the fact that the Bible indicates that, prior to the Fall, God intended people to work (Genesis 2:16) or the fact that we live in a fallen world.

Even those who accept Tanner’s basic thesis are likely to find the book unsatisfactory since it lacks suggestions as to what Christians should do about the mismatch between the spirit of modern capitalism and that of Christianity. Bizarrely, the only specific practical suggestion in the whole book is that employers should make “no-interest advances on worker’s paychecks in a routine fashion … rather than leaving them with high-interest payday loans as their only option” (page 128), a suggestion that misses the point that such advances would simply bring forward the monthly payday without solving the financial problems of employees that result in the recourse to payday debt.

Tanner may object that her purpose is merely to encourage Christians (and, perhaps, others) to adopt an ethic that it is at odds with what she perceives to be the spirit of modern capitalism. She says that she is suggesting “that the financial approach to the future is part of the present world to be left behind, a world to be repudiated in all the very basic ways it counsels people to relate to themselves and others, in favour of a whole new world to come that will be as different from this world as possible” (page 166). This is fine sounding but it is hard to see how it will help anyone decide how to behave in relation to their everyday work. If one accepts her rejection of the view that secular work can be a calling, one has to determine the role that it should play in one’s life and the relationship between it and other aspects of life.  Furthermore, if one wishes to have an influence on companies and governments, then one needs to have some specific policy suggestions to offer.

Those looking for help in relation to these things would be better off reading some of the other books reviewed in the section of this website entitled “The Business World” (see, in particular, those mentioned under “The Purpose of Business”).


“Christianity and the New Spirit of Capitalism” by Kathryn Tanner was published in 2019 by Yale University Press (ISBN 9780300219036). 219pp, plus notes.


Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.

Richard Godden: “The Social Licence for Financial Markets” by David Rouch

In the aftermath of the Global Financial Crisis, Mark Carney, the former Governor of the Bank of England, coined the concept of a “social licence” for financial markets and, in the Forward to David Rouch’s book, he commends Rouch for the progress he has made in defining a framework for this social licence.

Rouch’s basic thesis is concisely summarised in a six-page overview at the start of the book. He acknowledges that “Capitalism in one form or another is the only realistic option for meeting a host of human needs” (page xx). However, he also recognises that there has been a breakdown of trust of the kind that Mark Carney has identified and that “the usual toolkit of laws and regulations has been powerless to heal the fracture between the financial sector and surrounding society” (page xx). He suggests that the view that financial markets are really only about money-making is wrong and that recognition of a social licence is “both an observation about the relationship between finance and society and an expression of aspiration about how it could be at its best” (page xxii). Rouch wants to ensure that this recognition becomes universal and argues that paying attention to it “has the potential to help reorientate the individual relationships that comprise the wider relationship between finance and society, by strengthening positive reciprocity” (page xxiii). This, in turn, leads to various policy proposals designed to bring an overarching “social licence” narrative to financial market practice and regulation.

The resulting book is not an easy read. Rouch expresses the hope that traders, directors, lawyers, campaigners, regulators, academics, politicians and policy makers will approach finance differently as a result of what they read in it but even many of them will find it heavy going. Some parts are highly specialist (the 22 page “Written Standards Map” at the end of Chapter 5 being an extreme example of this), the language throughout is complex and a lot of the book is devoted to discussions of psychological, sociological and philosophical issues (e.g. theories of group behaviour and human motivation and concepts of human dignity and justice).

Rouch appears to be conscious of this issue and provides what he describes as a “Fast Track” summary at the start of each chapter, which sets out the key messages of the chapter and its main implications. He also frequently reminds the reader of what has been said earlier in the book and points to the direction of travel of his argument. Unfortunately, however, these devices do not completely solve the problem and they result in both a significant amount of repetition and an over self-conscious stress on the structure of the book.

Those who persevere will, however, find much food for thought and, probably, plenty to applaud in what Rouch says. Most fundamentally, he is surely right in asserting that markets are in fact, and should be, about more than simply making money. The knee jerk reaction of people (including market participants) to the effect that they care about nothing other than money can be proved to be wrong not only by reference to modern behavioural psychology but very simply through questions and answers posed to market participants. Moreover, the suggestion that markets should have a broader purpose is consistent with most major ethical systems, whether religious or secular.

Rouch is also surely right in recognising the power of ideas, or “narratives” as he calls them. If people believe that they are operating in a dog-eats-dog world constrained only by a jumble of complex regulations, they will behave differently and they would if they believed that they were working in an environment having a broad social purpose in which the relevant rules are, however imperfectly, reflections of that purpose. Furthermore, market and corporate culture exerts its own pressure for good or for ill. In part, these things explain why good people do bad things or, conversely, why even bad people may be constrained by the culture in which they find themselves.

In this connection, it is good to see Rouch acknowledge “the idea that legally enforceable regulatory rules that overlap with aspirational standards may diminish the force of the latter” (page 189) as well as the fact that “you cannot ultimately legislate for a sense of urgency. Nor can you force people to have a healthy relationship or to be trustworthy” (page 9). It is also encouraging to see his repeated references to issues of trust, which recognise that market behaviour comes down to the actions of individuals and groups of people and that relationships are key to the achievement of desired outcomes.

That said, there is a serious problem at the heart of the book: Rouch’s definition of “the social licence for financial markets” is vague. Indeed, he himself recognises that “Defining the substance of the social licence is … challenging” (page 133). He frequently says what it is not: It is “not a ‘mere’ metaphor” (page 113), it is not a “social contract” (page 115) and it is not to be identified with the “social licence to operate” that has been perceived in relation to other industries, particularly extractive industries (page 117). Furthermore, it is not to be identified with the legal authorisations which are required in order to be a market participant. It is, on the contrary, something that is granted by society as a whole and it “can be treated as granted to the extent that those in society have given their justified trust to financial operators, trust based on solid reasons for believing that those in financial markets will carry on business in a way that is consistent with the licence” (page xxii). It comprises “a freedom to pursue just ends by just means in financial markets, where justice is a situation in which the human dignity of market participants and those affected by their activities can be experienced most fully” (page xxii, italics in the original).

Almost every element of these statements gives rise to serious issues. For example, since most members of society (including many who are well educated) will have little idea of what the financial markets do let alone how they operate, in what sense can they be said to give “their justified trust … based on solid reasons”? In any event, what society are we talking about? Rouch appears to be having regard to nation states (or, perhaps, some super-national entities like the European Union) but is that realistic in a modern globalised world? Equally seriously, since there is no common understanding of the concept of “just” behaviour in society (see, for example, “What is Economic Justice?” by Andrew Hartropp), how can this form the basis of an adequate definition of the social licence?

Rouch acknowledges some of these difficulties, including the lack of consensus in relation to some key concepts such as the nature of “justice”, (page 135) but he believes that there is sufficient high-level consensus to render the concept of the social licence itself viable. Unfortunately, however, one may legitimately doubt whether this is true and ask whether the vague language of “social licence” has the effect of generating the appearance of agreement among those who use the term, without its reality. For example, as Hartropp demonstrates, an approach to justice that is based upon rights or needs will necessarily arrive at completely different conclusions from an approach that is based on due rewards or deserts and concepts based on justice in production will talk of completely different things from a concept based on justice in distribution (which, incidentally, Rouch appears to adopt).

There also seem to be problems in evaluating the role of laws and regulations in relation to the “social licence”. Rouch regards these laws and regulations as both evidence for such a licence and, to some extent, indicative of the terms and conditions of the licence. However, it is surely arguable that ever increasing regulation is indicative of the withdrawal or, at least, restriction of the terms of the “licence” rather than evidence of its grant. Furthermore, Rouch relies heavily on written materials produced by a variety of sources as the evidence of the terms of the licence and one is left with the impression that he has simply included “soft law” and related matters within his concept without really altering the regulation-based framework which he has previously recognised to be inadequate.

Some other questionable aspects of Rouch’s underlying analysis are less fundamental but nonetheless important in relation to the impact of his proposals. In particular, he places great stress upon the need to promote “other regarding behaviour” in contrast to “self-interest”. This is obviously morally right but, as Adam Smith long ago famously demonstrated, the two categories are not completely discreet. The building of trust may involve “other regarding behaviour” but, as Rouch recognises, it is absolutely necessary in business relationships and even the most self-interested person will need to have regard to this in order to advance their own interests. Similarly, most people have a desire for the approbation of others and this too may involve behaviours that, from one perspective, are other regarding but, from another perspective, are self-interested. In places, Rouch appears to acknowledge this and he clearly does not believe that the pursuit of profit is wrong in itself but, if his goal of widespread recognition of the “social licence” is to be realised, it would be desirable to avoid an undue bifurcation of motivations and instead to ensure that the narrative recognises that self-interested and other regarding behaviour are not in opposition as often as may sometimes be thought.

As one reaches the end of the book, one is left with a nagging feeling that the concept of a “social licence” is too vague and hard to get hold of for it to be capable of comprising the compelling narrative that Rouch rightly believes to be necessary to replace the distorted narrative of unbridled self-interest that is often wheeled out even by those within the financial markets. Might it not be better to focus on a simpler narrative?

Such a narrative might commence by focussing (as the book does) on the clearly evidenced positive role of financial markets within society, thus addressing both self-esteem of those within the markets who desire to be doing something worthwhile and the misplaced hostility of some outside; it might demonstrate how the aspirations of organisations operating in the financial sector and the personal aspirations of those who work for them (including financial aspirations) are advanced rather than held back by “other regarding behaviour”, which (as Rouch also agrees) is thus not code for abandoning the pursuit of profit let alone a demand that financial institutions turn themselves into quasi-charities; and it might stress some simple ethical values that are neither obscure nor disputed among reasonable people. 

In doing this, the narrative could build on concepts that are well understood, widely accepted and of proven worth such as the hard monetary value of trust and brand reputation, the role of client/customer focus in developing this, the need for long term business sustainability and the motivational impact on staff of being an organisation that is known for its high standards, including ethical standards.

Such an approach would focus on the culture of financial services organisations rather than metaphysical concepts. It would avoid the obscure language of the “social licence” with the negative over-tones of constraint and implicit threat that may be perceived in it and replace it with a simpler and more positive narrative which invites participants in the financial markets to take pride in what they are doing and recognise that they will best prosper, both financially and otherwise, in an environment that is ultimately beneficial to society as a whole.


“The Social Licence for Financial Markets” by David Rouch was published in 2020 by Palgrave Macmillan (ISBN 978-3-0-30-40219-8) 327pp excluding bibliography.


Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.




Richard Turnbull: The Rise of the Robots & The Second Machine Age


Optimist or pessimist?

We stand on the edge of a technological revolution which is proceeding at an exponential pace and which will impact and alter our work and indeed our way of life in ways we can hardly imagine. The paradox of technological advance and of artificial intelligence is well recognized. Do these developments enhance human well-being and welfare to the benefit of all or is the threat posed to employment so dramatic that the traditional responses of education, reskilling and training will be insufficient to protect us? Some commentators refer to the present period of technological change as ‘the fourth industrial revolution.’ The first represented the move to mechanisation, the second, the introduction of electrical power, the third, digitisation and automation. The change we are now experience is one of exponential speed in processing, the impact of connectivity and access to knowledge that is transformational.

In The Rise of the Robots, Martin Ford essentially argues we are ill-equipped and poorly prepared to face the onslaught heading our way. His two main arguments proceed as follows. First, a change in the types of job which will be affected. The advance of digitisation has alerted society to the possibilities of automating routine processes – hence the advent of robotic methods in production replacing the traditional methods of assembly-line production in, for example, the car industry. This is a familiar story and the usual response is to educate, train and reskill. Ford argues that the problem now is that “the machines are coming for the high-wage, high-skill jobs as well” (page 27). Higher education and knowledge skills which traditionally attracted a premium will no longer protect the worker, so much so, he argues that “the ongoing race between technology and education may well be approaching the endgame” (page 124). Indeed, many professions will find that increasingly capable machines will take on many of the tasks previously seen as exclusive to certain professions such as the law. This is then linked to his second argument, that the ability to replicate and scale machine intelligence will “create winner-take-all scenarios’ with ‘dramatic implications for both the economy and society” (page 82). One example here would be the dominance of a very small number of book distribution platforms effectively eliminating all competition. To return to the example of the law, it is not that the high-street lawyer has digitised conveyancing documents; rather it is the speed and extent of access of processing power that can identify cases and precedents in an instant previously requiring hours in a legal library.

Martin Ford, then, is a pessimist. He understands and appreciates that technological advance has largely driven a more prosperous society. However, on this occasion, he thinks it will be different.

Erik Brynjolfsson and Andrew McAfee are optimists. In The Second Machine Age they do not deny the challenges but establish a framework that argues that “the transformations brought about by digital technology will be profoundly beneficial ones” (page 9), adding that “innovation is also the most important force that makes our society wealthier” (page 72) and “technological progress typically helps even the poorest people around the world” (page 168). They recognise the challenge to employment but remain convinced that “acquiring an excellent education is the best way to not be left behind as technology races ahead” (page 199). Brynjolfsson and McAffee agree with Ford that there are few jobs which will be left untouched by the scaling of digital power. However, they have more confidence in the innovative elements of the human person and human adaptability and flexibility which will enable humanity to seize the opportunities. Importantly, they also point out that despite the rhetoric “digital labour is still far from a complete substitute for human labour. Robots and computers, as powerful and capable as they are, are not about to take all of our jobs” (page 206). They argue that the best way to tackle the labour force challenges is to grow the economy and to encourage entrepreneurship – “entrepreneurship is the best way to create jobs and opportunity” (page 214).

How are we to assess these two approaches?

First, we need to recognise, as the authors of both these books do, that the shift we are experiencing is profound and will have enormous implications for business, industry and society as a whole. We cannot bury our head in the sand.

Secondly, the impact on employment and how we have traditionally responded points up many of the inadequacies of our education systems. If the optimism of Brynjolfsson and McAfee is to be the prevailing argument then life-long education and technical education will need to come back to the fore. What about reducing college degrees to 2-years and allowing the ‘third year’ to be credited to a personal training account to be accessed and used over the course of a person’s working career?

Thirdly, the nature of the human person cannot be overlooked. Humanity is endowed, by God, with ingenuity and creativity which will find expression in innovation and entrepreneurship. These activities are part of the very expression of the human character.

The issues are real and serious. Both of these books, and I recommend reading both together as it were, represent serious thought and insight and present the challenges in a well-researched and thought-provoking manner. For a Christian believer, optimism must win the day because of the nature of God and of the human person. However, the road will be bumpy, and for that optimism to prevail requires a degree of self-awareness, policy changes and collaboration across disciplines which have not been the recent characteristics of our society. However, to allow Brynjolfsson and McAfee the last word, the progress of digital technologies remain “the best economic news on the planet” (page xiii).



The Second Machine Age by Erik Brynjolfsson & Andrew McAfee was published in 2014 by W.W. Norton (ISBN:978-0-393-35064-7), 306pp

The Rise of the Robots by Martin Ford was first published in 2015 by OneWorld (ISBN: 978-1-78074848-1), 334pp

Richard%20Turnbullweb#1# (2)Dr Richard Turnbull is the Director of the Centre for Enterprise, Markets & Ethics (CEME). For more information about Richard please click here.






Richard Turnbull: The Politics and Ethics of the Just Price


The Politics and Ethics of the Just Price is a collection of essays in economic anthropology.  The volume, which is academic orientated, consists of an introduction to the theme and then eight case studies in different anthropological settings. The core issue at stake is the idea of what constitutes a just price, the relationship of price to value and hence to justice, the manner in which this then interacts with the market price and how this relates to real life activity in individual settings. Many of the individual stories and scenarios are fascinating and bring out some genuine tensions and complexities. Those anthropological settings ranger from waste pickers in Turkey, fruit growers in southern Spain, corn and bean trading in Nicaragua to small holders in Tuscany.

The first chapter is a scene-setting introduction. Four approaches to the idea of a just price are noted. The first of these is the classic model in which the interaction of supply and demand in a clearing market reflects consumer utility and hence represents a just price. The other approaches are labour value, the idea that commensuration – the comparison of use value and exchange value – is socially mediated in different historical and geographical circumstances (that is, social value) and, finally, a denial of the possibility of a just price or the possibility of reconciling exchange value and use value. The other key definition is that of “moral economy”, a term derived from the Marxist historian, E.P. Thompson. Unsurprisingly, the term is defined as “a critique of the laissez-faire economic model” (page 14), which really fails to give proper weight to the potential richness of the term, not least since the authors acknowledge that Adam Smith’s argument “resembles a notion of the just price” (page 8). More work is required in this area and the book is over-dependent on Thompson.

There are two aspects in particular that are worthy of further reflection in a review. The first is, notwithstanding the complexities and indeed alternative approaches, how many of the detailed anthropological settings which are analysed still give considerable, if not unlimited, weight to the classic determination of the just price. To give just one example from the volume. The actors in the Turkish scrap metal waste recycling industry include the waste-pickers who sell to warehouses and then sell on to recycling companies who in turn sell the recycled materials into the manufacturing process. Consequently, there are numerous opportunities for collusion, state intervention and global market dominance (London Metal Exchange) not to mention other contested areas. Perhaps surprisingly, or perhaps not, when “the state intervenes to alter the price at which waste-pickers and traders sell, either by direct imposition or through legal regulations, waste-pickers and traders perceive this as unfair and defend the average market price as the just price” (page 28). The study even concluded that “contestations over price in the Turkish recycling sector did not generate claims for justice against the abstract market price.” Adam Smith lives on.

The second area of fruitful reflection which is reflected in several of the studies is the relationship of exchange value and use value as mediated through social relationships. Thus, fruit and vegetable growers in southern Spain, small holders in Tuscany and corn traders in Nicaragua all proceed on the economic anthropological assumption that whilst accepting “important aspects of market exchanges, a substantive frame suggests a just price must also consider social and political relations” (page 92). These examples also proceed on emphasising the distinction between exchange value and use value. Hence, the vegetable growers will supply food to their own town at a different price at which surplus is sold into the market (page 95). The Tuscan small-holders hold to an ideal for a household “to own sufficient land to meet the bulk of their subsistence needs with a small surplus for sale” (page 141). Numerous familial and local exchanges would take place none of which were monetarised. In the Nicaraguan context the authors tells us that “peasants consciously oppose use values to exchange values through their moral ideologies” (page 116). Essentially all of these examples operate with two prices in two separate markets – a global, distant and anonymous exchange value based on supply and demand and a localised market based on face-to-face transactions grounded in personal and social relationships.

The strength of the volume is two-fold. First, that the role of a market price as a just price is recognised and accepted in a wide variety of anthropological settings. Secondly, that there are political, but in particular social factors that impact and form and shape prices in the local setting. In a sense this should be no surprise – differential pricing in different markets in accordance with then varying aims and objectives of sellers in alternative markets. There is nothing incompatible here with a market economy, but it is a valuable and helpful reminder as to how various communities respond locally in the context of wider and global markets.

The somewhat disappointing chapter was the essay on the compensation scheme following the Rana Plaza garment factory collapse. Although fascinating and incisive in its own right, and in a truly horrific context, the chapter seemed out of place in a discussion of just pricing.

Each individual chapter is self-contained and relatively concise and quite a fascinating read. Some real insights, extraordinary contexts, complex history and genuine engagement with the relationship of economic and social considerations in markets and pricing.

The weakness of the essays is that much of the language is simply turgid, and unnecessarily so. The academic foundations of the volume are both its strength and weakness; some interesting questions but shrouded in a mystical academic language of a rather obscure discipline. The book is very expensive and you would need a specific interest in the academic subject matter to justify purchase (at the market price one might add!).


The Politics and Ethics of the Just Price, edited by Peter Luetchford and Giovanni Orlando was published 2019 by Emerald Publishing (ISBN: 978-1-78743-574-2) as volume 39 in the series Research in Economic Anthropology. 245pp.

Richard%20Turnbullweb#1# (2)Dr Richard Turnbull is the Director of the Centre for Enterprise, Markets & Ethics (CEME). For more information about Richard please click here.






Richard Godden: “The Wolf at the Door” by Michael J. Graetz and Ian Shapiro

The publication of yet another left of centre book asking “What has gone wrong with American capitalism and what should be done to fix it?” may provoke a sigh or a yawn. However, in the case of The Wolf at the Door such a reaction would be misplaced. It is a constructive and engaging book that has things to say that are worth considering.

Its starting point is that there is a serious economic and consequent social problem in the USA that is giving rise to dangerous populism both of the right (Donald Trump) and of the left (Bernie Sanders). Those on the right of American politics are denying that there is a problem whilst those on the left are focusing on the wrong issue: taking their cue from Thomas Piketty, they focus on inequality and, in particular, the wealth of the top one per cent.  This, Graetz and Shapiro suggest, is a serious mistake since “Obsessing about the very top is a distraction from the more pressing problems of economic stagnation and insecurity among increasing numbers of the middle class as well as the poor” (page 28).  They acknowledge that “fighting insecurity might involve attending to some aspects of the growth of inequality” but insist that “the primary focus must be on mitigating the sources of economic insecurity” (page 7). They are surely right about this and their book thus gets off on a sound footing.

The authors aim to identify the various elements of economic insecurity and come up with a feasible agenda for addressing these. This result in a basket of proposals: a substantial expansion of the US Earned Income Tax Credit system (which provides a refundable tax credit for low to moderate income workers); the merger of the US Trade Adjustment Assistance and Unemployment Insurance programmes into one national programme (which the authors call “Universal Adjustment Assistance); major investment in infrastructure; the progressive expansion of Medicare starting by extending it to the youngest working age people, such that, over a generation, it becomes available to all; and the establishment of a system of universally available “pre-K” child care for young children under the age of five.

The authors recognise that many on the left will regard their proposed programme as unambitious, but they defend it on the basis that it addresses the right issue (i.e. economic insecurity) and is politically, economically and socially feasible. They are realists and pragmatists: they recognise that many on the left wish to return to what is seen as the utopia of the decades following the Second World War but, in the context of comments about the steel industry, warn that “this nostalgic yearning ignores the realities of lower-cost production abroad and of the technological transformations that now enable steel to be produced with a fraction of the workers once required” (page 18); they bluntly assert that the “unavoidable fact is that the good old days of well-paying, long-lasting employment are behind us, and they are not coming back” (page 115); they recognise that US politics is dysfunctional but seek to identify ways of achieving their goals despite this, in particular, by identifying “six features of successful distributive politics” (page 35) including building coalitions and pragmatically pursuing proximate goals; and on this basis they dismiss many policies favoured by the left both in the US and elsewhere including the establishment of universal basis income and a dramatic increase in the minimum wage.

This pragmatism results in a commendable absence of ideological shibboleths and the recognition of fundamental economic realities. Graetz and Shapiro are prepared to contemplate privatisation, they strongly favour free trade and they recognise the essential role of business both in the creation of prosperity and in the building of the coalitions that they recognise are essential for the implementation of their reform programme. They also refuse to take positions on a number of economic issues that divide left from right including the impact of statutory minimum wages and, perhaps most significantly, whether or not Piketty’s analysis and predictions are right. They dismiss Piketty’s suggestions of a global wealth tax and a trans-national European assembly with taxing and re-distributive powers as “so utterly deaf to anything that is feasible politically that it is hard to take them seriously” (page 261).

The book is wholly focused on the USA and non-Americans may fear that it will not be of interest to them. However, it is addressing issues that exist in many developed nations and, whilst much of the detail is likely to be relevant only to the USA, the analysis of the problems, the core elements of the proposals for solving them and the authors’ reflections on what is necessary to effect change should be of wide applicability. Furthermore, the insight that the book provides into the Byzantine complexities of the US legislative and governmental processes is of considerable interest in itself.

Of course, the biggest question to which the book gives rise is whether its proposals would work. Would they have the dramatic net positive effect that the authors’ hope for, even in the longer term? Unfortunately, this is open to serious doubt.

Graetz and Shapiro draw their inspiration from Roosevelt’s New Deal, which they mention on numerous occasions and which they credit with significant achievements. However, whilst unquestionably, there was much to applaud in the New Deal, it is far from clear that it dealt with economic insecurity. As Graetz and Shapiro admit, US unemployment remained above 20 per cent. through the 1930s and it was the Second World War that paradoxically transformed the US economy.

Some of the proposals are also vulnerable to other, more specific, criticism. In particular the authors never adequately deal with the economic issues associated with the subsidisation of wages that has been recognised ever since the Speenhamland magistrates tried this in late eighteenth century Britain. More fundamentally, they do not address issues associated with the control of mushrooming costs that have bedevilled social security systems around the world.

Leaving aside the economics, there must also be doubt over the US political feasibility of some of the proposals. In some cases, the authors give good reasons for believing that the coalitions necessary to secure the enactment of appropriate legislation could be assembled (e.g. in relation to the expansion of earned income tax credits). In other cases, however, they do not. Indeed, in relation to their proposed establishment of Universal Adjustment Assistance, they admit that “there is no obvious coalition to step in to the breach” (page 168) and their emphasis on infrastructure investment is somewhat undermined by their frank recognition that the apparent support for investment from across the US political spectrum has not prevented the visible decay of US infrastructure over a long period of time.

Those on the right of the political spectrum will also wonder how the proposals are to be paid for. Graetz and Shapiro are not classic “tax and spend” liberals. Indeed, they fear that left-wing populism could lead to “pressure for tax regimes that hamper competitiveness” (page 273). Furthermore, they acknowledge that the level of US government debt is already unsustainable yet raising income tax is politically impossible, having been rejected by both major parties in the US, and they dismiss wealth taxes as a solution on the basis that experience in other countries shows that their promise has been “oversold” (page 246). Hence they fall back on a basket of proposals that they suggest would, collectively, raise the necessary funds. Of these, the most dramatic would be the introduction of value added tax in the USA. Less dramatic proposals include the introduction of a gifts tax and the elimination of tax breaks for specific industries (although they do not generally favour raising business taxes.

British readers will probably recognise echoes of Tony Blair’s approach to taxation in these proposals. Indeed, the whole of Graetz and Shapiro’s programme has overtones of New Labour (which, it will be remembered, drew inspiration from the centre-left in the USA). This should give pause for thought. Some may argue that the rejection of New Labour by both the left and the right following the Global Financial Crisis resulted in us being unable to evaluate the long-term impact of Blairite policies. However, it is clearly arguable that those policies only worked because the economy was expanding at the time and they ultimately failed to address the underlying issues that Graetz and Shapiro identify and also stored up both economic and political problems for the future.

There are thus many challenges that can fairly be addressed to Graetz and Shapiro. However, this does not diminish the importance of what they have written. The Wolf at the Door represents a challenge to those on the left to reconsider priorities and to focus on policies that are both capable of implementation and will make a real difference to people’s lives. It is also a challenge to those on the right to recognise the reality of economic insecurity and, if Graetz and Shapiro’s proposals are considered unacceptable, to come up with an alternative. Whatever one’s political starting point, The Wolf at the Door is worth reading.



“The Wolf at the Door” by Michael J. Graetz and Ian Shapiro was published in 2020 by Harvard University Press (ISBN 9780674980884). 285pp including glossary.

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.


Lord Griffiths: “The Future of Capitalism” by Sir Paul Collier

The Future of Capitalism tackles one of the big issues of our time. Its impressive author, Sir Paul Collier, CBE, FBA is a distinguished member of the Blavatnik School of Government at the University of Oxford and a seasoned practitioner in development economics for which he received a knighthood. He is convinced that capitalism is the only economic system which can generate mass prosperity. Regrettably it has also divided societies, created dysfunctional democracies and posed risks to the planet. More than that he claims it is morally bankrupt. The challenge he set himself in this book is how to restore ethics within capitalism to prevent it drifting into either a totalitarian state (China) or populist nationalism (East European countries). In doing so, he eschews ideology claiming that all his policy prescriptions are based on evidence, analysis and pragmatism.

The inspiration for the book was Anthony Crosland’s The Future of Socialism, published in the 1950s, which set an agenda for the social democracy of the post war years in the UK. (To some readers Anthony Crosland might seem a minor figure out of a history book, but in his heyday he was the leading UK intellectual of the centre left and a Cabinet minister in the Wilson and Callaghan Labour Governments attempting to put his ideas into practice). Collier claims that the Crosland agenda worked well between 1945-70, even at one point describing it as the “miracle period”. It failed however because it neglected its roots in the ethical foundations of the nineteenth century cooperative movement.

 It was replaced by a combination of Utilitarian technocrats (mainly economists) intent on redistributing income to those below the poverty line (however defined) and lawyers committed to John Rawls philosophy which promoted the rights of disadvantaged groups based on race, gender, sexual preference and so on, which has become the basis for identity politics.

Both of these philosophical approaches emphasise the individual not the collective and differences between groups based on either income or disadvantage rather than the needs of persons and families. Each elevates a single moral prescription, “the greatest happiness of the greatest number” and “laws in a society must be designed for the most disadvantaged groups”. However, they neglect the normal moral instincts and values of people such as loyalty, fairness, obligation and desert which were central to the cooperative movement.

The philosophical foundation which Collier builds on is found in the writings of David Hume and Adam Smith (especially The Theory of Modern Sentiments) and the Pragmatism of nineteenth century American philosophers such as William James and Charles Peirce. After laying this down he devotes four chapters to restoring ethics within the state, firm, family and world. Then, in the final section he presents a plethora of ideas for restoring an inclusive society.

To tackle the geographical divide, he proposes taxing the metropolis and regenerating broken cities and regions through establishing local banks, local universities and business zones. Families can be strengthened by preventing them   from falling apart in the first place, supporting children in the early years, from pregnancy to the first day of school, raising standards of teaching in schools, offering improved post-school vocational education and extending home ownership. Tackling the negative effects of globalisation requires redistribution of resources to those areas which have lost out through free trade and technology.

In putting forward all these proposals he is not afraid to be controversial. He is scathing about the greed of investment banks. He argues for taxes on financial transactions and raise taxes on the incomes of highly skilled workers especially in finance and law. He wishes to see a new criminal law comparable to manslaughter which he calls bankslaughter. He backs immigration controls, strengthening traditional two parent families from whom they are genetically descended and having less state intervention through social policy dealing with the needs of children.

Although it is not fundamental to the main theme of the book I question Collier’s judgement that the period 1945-70 was as successful as he claims. It is certainly true that the new social contract devised by Beveridge, Temple and others which produced the post war Welfare State and mixed economy lasted the course. However, by the 1960s inflation was back accompanied by rising unemployment, prices and incomes policy were a failure and the nationalised industries were mired in the red, while by the end of the 50s the social infrastructure began to show signs of fraying through increased violent crime, illegitimacy and addiction. Meanwhile, some of Crosland’s policies were proving destructive; “If it’s the last thing I do, I’m going destroy every fucking grammar school in England. And Wales. And Northern Ireland”. By the time of his early death (58 years old) he became so disillusioned with the crisis of capitalism that he thought the creation of a ‘serious revolutionary socialist party’ was worth thinking about.

One question which needs to be asked is whether he has succeeded in the task he set himself, namely restoring ethics to firms, families and states. In the case of firms he devotes an interesting chapter to the way in which ethical firms of the past which he mentions – Imperial Chemical Industries (ICI), Cadbury, The Halifax Building Society – have given way to the vampire squids of today which are held in contempt as greedy, selfish and corrupt.

In order to achieve change he believes competition is an important discipline on business but increasingly limited because of the power of networks (electricity, water, railways) and the role of technology in creating unregulated natural private monopolies (Facebook, Amazon, Google, eBay and Uber). The conventional responses to these problems are regulation and public ownership, but both have severe limitations. As an alternative he suggests taxing economic rent, which by definition does not discourage productive activity or risk taking; reforming corporate law so that concern for the public interest should be mandatory for all board members, such as Public Interest Companies in the US; and introducing the new criminal offence of bankslaughter.

The problem with all these, which he recognises is that regulations can be got around by talented management, taxes reduced by clever accounting and laws fudged by legal argument.  After acknowledging that the cupboard is fairly bare he puts forward the novel suggestion that society needs to build a critical mass of ethical citizens who can judge the behaviour of companies, favourably or not. This is less than a specialised sub-police force and more a form of neighbourhood watch strengthened to have teeth. This may seem fanciful but the achievement of the women’s movement and climate change protests, based on evidence of discrimination or degradation show that great oaks grow from acorns. Post COVID-19 many questions will be asked about the future of our society, so his proposals may not be so fanciful.

To restore ethics to the state he rejects ethnicity, religion and shared values as a way to create shared identity because they are incompatible with modernity, despite the showing of how popular Judeo-Christian based ethics still remain. He plumps for a sense of belonging to place, something which is hard-wired in our psyche, especially the place in which we grew up and which we call home. Unlike Nationalism, Patriotism is an inspiring concept and he claims a good example of it is found in the politics of President Macron. A major raison d’etre of politicians should be to create narratives of shared belonging. To restore the ethical family, he suggests a greater acceptance of mutual obligations by parents in raising children rather than one focused on their own individual, personal success in work.

The one surprising weakness of the book is its treatment of religion. The book contains four references to religion and six to religious fundamentalism. All are wholly negative: religion leads to cultural separation, marriage is tainted by its religious association, it is the basis of a new nationalism, heir to fascism. Religion is almost always qualified by the adjective “extreme”. Jihad pogroms and other cultic, barbaric practices deserve the treatment he delivers and the Christian religion has many shameful episodes in its history. However, if restoring ethical behaviour in business, politics and society requires ethical citizens, ethical politicians and ethical family members, a rejection of self-aggrandisement, ‘freedom is not bound in servitude to the self but in escape from the self’ (p. 108), and strengthening a sense of obligation, surely a religion based on transcendence and true humanism must be a help to the cause.

On the evidence of nineteenth century history in the work of Gertrude Himmelfarb and Christie Davies, the irony is that ICI, Cadbury and The Halifax Building Society were deeply rooted in a late nineteenth century Christian culture, especially non-conformist, which was also an inspiration for the cooperative movement, friendly societies and the social reforms of the period. Non-conformity would also at this time have been a major force in Collier’s beloved Sheffield.

I enjoyed book but at the end it left me with a nagging question. It certainly respects the evidence, applies analysis to good effect and makes a number of interesting practical proposals. However, its conclusion is that religion has no place in the future of capitalism. In its neglect of the positive contribution of the Christian faith on British life and culture I fear it has strayed across the boundary of social science into ideology.



“The Future of Capitalism: Facing the New Anxieties” by Sir Paul Collier was published in 2018 by Harper Collins (ISBN 978-0062748652). 256pp.

Brian Griffiths (Color)

Lord Griffiths is the Chairman of CEME. For more information please click here.








Edward Carter: “Global Business” by Mahesh Joshi & J R Klein

This book is a concise attempt to grapple with the subject of the global economy, especially in the light of events such as the Brexit decision and the election of Donald Trump. Written by two business practitioners, it has a clear and slightly breathless style – one might almost say, an executive summary stretched over 150 pages.

The book is set out in four parts: (1) The World Today; (2) The Changing Worldview; (3) The Tumultuous World; (4) The World Tomorrow. While there are connections and overlaps in terms of the content throughout, there is certainly not any sense of a carefully developing argument as one moves through the different chapters. Instead, stand-alone insights are offered in a descriptive rather than an analytical manner.

In the opening chapter, I particularly noted statements along the following lines, many of which did not seem to me to be especially startling or fresh, but which none-the-less were of interest and value:

  • – There has been a recent and massive growth in connectivity, population numbers, trade, GDP, and mobility of talent (page 5)
  • – Disruption in global trade would have catastrophic effects (page 6)
  • – Restoring trust after any major trade disruption could take decades (page 7)
  • – A leading challenge to globalisation is rising inequality (page 8)


The chapter ends by including this statement: “When politics becomes the dominant feature in an economic domain the situation quickly becomes dangerous.” For me, this betrayed the methodological core of the book as understanding economics in a technical way rather than as a question for public debate and reflection.

I was therefore not surprised that chapter 2, which addresses local business, did not seem to have a deep sense of geography or engage with the political and philosophical questions surrounding the relationships between people and places. Modern economic and business theory (if not practice) famously has a weak sense of place. Chapter 3, which addresses inclusive capitalism and social purpose, also takes a rather instrumental vision of society and business, rather than feeling for an organic relationship.

Chapter 4 looks at global finance, and rightly sees this as a critical element within the globalisation of the economy. There is some interesting analysis here, but stating that “money is a commodity” (page 27) is, in my mind, to miss the unique property of the financial sector. Chapter 5 has some rich and helpful thoughts about diversity and kinship, and brings out the importance leaders have in helping others find meaning. Chapter 6, on NGOs, seemed to me to underplay the differences between these organisations and businesses, but it was helpful to see them included.

Part 2 takes the reader through the oil and gas sector, the emerging economies, China, India, Africa, and finally Australia. There are some good historical vignettes here, although I suspect the history is at times fairly superficial, and my overall impression was that these chapters are very readable, full of common sense, but somewhat lightweight on any deep or critical thinking and interpretation.

Part 3 begins with a chapter focused specifically on Brexit and Trump. There is some good descriptive work here, and the reason why these two events happened is judged to have been some kind of failure of economic theory, the need for “more active states” (page 102), and a better ‘partnership of public and private finance’ (page 103).

The rest of Part 3 covers the important subjects of new and disruptive technologies, the “internet of things”, new and much more responsive production models, lifestyle innovations, big data and analytics. I found all of this very interesting, albeit descriptive rather than attempting any thoughtful or reflective interpretation of the modern global economy.

Part 4 sets out to look ahead into the future, and considers the themes of work, human workers (over and against robots and AI), entrepreneurship, and then finally the future of globalization. Again, there is much of interest here, but mainly in terms of a description of current trends with some extrapolation rather than any far-reaching or radical “future-thinking”. Many of the developments described resonated with my own experiences, and I was especially pleased and intrigued to read the following: “The need today… is for humans to be more human-like” (page 141). This would make a great theme for a follow-up book.

Having been published in 2018 there could not, of course, have been any descriptive reference in this book to the Covid-19 virus episode, which has arguably been responsible for a bigger shock to the global economy and the assumptions underlying it than any other occurrence within the past 50 years. A bigger weakness in my mind was the strange almost complete absence of any engagement with the eco-agenda, which asks huge questions of the global economy and has rapidly become mainstream. However, notwithstanding these lacunae this book sets out a great deal of material in a concise and readable way. Alongside other more evaluative and thoughtful discussions it makes for a potentially useful resource for theorists, policy-makers and practitioners as they wrestle with the puzzles of the global economy of today.

“Global Business” by Mahesh K Joshi and J R Klein was published in 2018 by Oxford University Press (ISBN 9780198827481 ). 158pp.


Edward Carter is Vicar of St Peter Mancroft Church in Norwich, having previously been the Canon Theologian at Chelmsford Cathedral, a parish priest in Oxfordshire, a Minor Canon at St George’s Windsor and a curate in Norwich. Prior to ordination he worked for small companies and ran his own business.

He chairs the Church Investors Group, an ecumenical body that represents over £10bn of church money, and which engages with a wide range of publicly listed companies on ethical issues. His research interests include the theology of enterprise and of competition, and his hobbies include board-games, volleyball and film-making. He is married to Sarah and they have two adult sons.

Richard Godden: “Global Poverty: A Theological Guide” by Justin Thacker


Dr Justin Thacker describes Global Poverty: A Theological Guide as “In essence … a systematic theology of global poverty” (page 2). He explains that, in terms of the public apologetic content of the book, he has two primary aims: first, to issue a “plea for a reformed capitalism” and, secondly, to suggest “on theological grounds” that aid is not a long-term solution and should rather be viewed as “an essential but temporary measure” (page 4). He states that global poverty is complex and that there are no quick fixes and, in the course of a wide ranging discussion of theological, ethical and economic issues, he endeavours to draw out the implications of the big themes of the Bible, critique the views of other writers, analyse different approaches to development and comment on practical matters. The result is a book that is deeper and more conceptual than many Christian books on poverty. Unfortunately, however, it does not live up to its promise.

The book is arranged around the Biblical themes of creation, fall, Israel and redemption (the inclusion of Israel reflecting Thacker’s adoption of Christopher Wright’s view of the paradigmatic role of ancient Israel and the Old Testament law). In relation to each of these, Thacker seeks to draw out the implications in relation to poverty and our response to it of core Biblical truths.

There is much in the theological analysis that is well founded and helpful but there is also much that is highly contentious. Some of the contentious statements are of little importance (e.g. the statement that the purpose of the Jubilee regulations in the Old Testament “is that the nation might be a holistic blessing to all the nations”, page 116) and some, while of greater theological importance, are not fundamental to Thacker’s argument (e.g. his adoption of the Christus Victor model of atonement, page 148). Others, however, are both important and fundamental (e.g. the statements that “spiritual liberation is one of the fruits of political liberation”, page 109, and that “perhaps sin is not an individual concept at all”, page 56). It is hard to see how such statements can be squared with the Bible. Indeed it is hard to square them with other things that Thacker says (e.g. his critique of liberation theology). The result is that the theological underpinning of his conclusions is shaky.

Thacker’s statements relating to economic issues are also confused. He accepts things that are often ignored by those in Church circles: he recognises that “this side of the new heaven and new earth, there is no perfect and just political and economic system” (page 180), the inherent dignity of work (page 25) and the fact that corruption has a devastating impact on many low income countries (page 89); he acknowledges that inequalities between countries are decreasing and that this decrease is not as a result of the giving of aid (page 240); and he warns against “a victim mentality that denies agency” (page 167). Yet he refers to “systemic issues that keep the poor, poor” (page 65), he appears to believe that the poverty in low income countries is linked to the consumer lifestyles of high income countries (page 83), he asserts that “The core, wealthier nations are not accidentally wealthy but wealthy precisely because the peripheral nations are poor” (page 165) and he devotes considerable space to the alleged impact of “the colonial legacy” (e.g. “at least part of the reason Britain is wealthy today is because we stole from India during the eighteenth and nineteenth centuries”, page 70, and “we enjoy the fruits of … slavery”, page 80). Hence, he comments “I wonder if Cynthia Moe-Lobeda actually speaks the truth when she says, ‘when I donate money to an agency working in Mozambique, dare I consider a gift what is frankly stolen goods?’” (page 76). It is hard to reconcile all these statements. Indeed, one gets the impression that Thacker has found himself compelled to accept some important economic truths yet cannot bring himself to accept their implications.

Despite Thacker’s acknowledgement of the complexity of his subject, much of his analysis is simplistic. He often asserts a particular view without adequately analysing the arguments for and against it, his comments relating to price controls being an obvious example of this (page 119). He also falls into the common trap of leaving people feeling guilty about their behaviour (e.g. for what they buy) on the basis of statements that fail to recognise the complexity of the situation or provide a practical and problem free alternative.

Thacker wants to present his analysis as a via media but it ends up well to the left of centre. He appears to have bought a lot of Thomas Piketty’s analysis and might do well to consider the fact that even left-leaning economists doubt much of what Piketty has said (see After Piketty, which is reviewed on this website). Conversely, he caricatures free market approaches, criticising extreme statements that few Christians would seriously believe (e.g. the suggestions that “individuals sin within a basic structure that is righteous”, page 62, and that it doesn’t matter that we engage in morally questionable behaviour since avoiding it “will make no difference because everyone else is engaging in it anyway”, page 103). He also appears to believe that the only Christian free market approach on offer is that advocated by Wayne Grudem and Barry Asmus in The Poverty of Nations, which he attacks obsessively throughout the book. As the review of The Poverty of Nations on this website makes clear, it is a flawed book and a number (but certainly not all) of Thacker’s criticisms of the views expressed in it are well deserved. However, attacking Grudem and Asmus, does not dispose of the arguments in favour of a free market approach and against some of the things that Thacker advocates.

It is one of his attacks that reveals most clearly Thacker’s defective economics. He summarily dismisses Grudem and Asmus’ view that enlarging a nation’s overall gross domestic product is ultimately the only way of eliminating poverty (page 120) and, later in the book, baldly asserts that “continual economic growth is simply not a sustainable solution for the whole planet; it is only a solution for the rich minority” (page 245). He presumably believes the earth’s resources to be limited and the environmental costs of their use to be unacceptable. What he appears not to have considered is the possibility that human ingenuity (and in particular, scientific and technological advances) will release more resources and satisfactorily mitigate the environmental costs of their use. To recognise this, one only needs to imagine the impact that the harnessing of nuclear fusion would have.

Of course, Thacker is right that there is much more to human flourishing than can be provided by economic growth but, as the past 200 years demonstrate, economic growth is an engine that drives, even a precondition for, many desirable human outcomes.

The above litany of criticisms may give the impression that there is nothing good about Global Poverty but this is not the case. It contains some worthwhile analysis of various issues, such as paternalism, the concept of a moral obligation existing when no moral responsibility for a particular situation exists and the manifestation of sin in societal structures. The final third of the book is also better argued and more insightful than what proceeds it.

Thacker’s critique of secular and theological theories of development is particularly worth reading. It includes a discussion of the theologies of Christian Aid and Tearfund, two high profile UK based Christian aid agencies. Thacker commends the practical work of both of them and has included them among the charities to which he is generously donating the royalties from his book. However, whilst he rightly commends the theological grounding of Tearfund, he is (again rightly) highly critical of that of Christian Aid. It is thus unsurprising that it is the Global Advocacy and Influencing Director of Tearfund, Ruth Valerio, who is quoted on Global Poverty’s cover, saying “This is a superb book and I encourage you to read it”.

It would be nice to be able to agree with Valerio or, at least, to say that the stronger parts of the book outweigh its defects. Sadly, however, this is not the case, those wishing to consider an economically and theologically sound approach to poverty would be well advised to look elsewhere, perhaps starting with some of the other books reviewed on this website.


“Global Poverty: A Theological Guide” by Justin Thacker, was published in 2017 by SCM Press (ISBN 978 0 334 05515 0). 257pp.

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.



Richard Godden: “After Piketty”, edited by Heather Boushey et al.


Thomas Piketty’s Capital in The Twenty-First Century, published in 2013 (English edition, 2014), is the economics equivalent of Stephen Hawking’s A Brief History of Time: it is a technical book that has secured mass sales, over two and a quarter million copies having been sold worldwide. One may wonder how many of the purchasers have read and properly understood it but there is no doubt that it has achieved almost cult status among those on the left of the political spectrum.

Its reception amongst economists has been mixed with divisions along predictable lines. Few, however, deny that its arguments, and the wealth of data underlying them, require critical evaluation and After Piketty, edited by Heather Boushey, J. Bradford DeLong and Marshall Steinbaum, is a significant academic contribution to this process. It focusses on the issue of economic inequality and comprises 21 essays framed by an introduction from the editors and a response to the essays from Piketty himself. Most of the contributors are economists, although some come from other disciplines (e.g. Daina Ramey Berry is Professor of History and African Diaspora Studies at the University of Texas and Gareth Jones is Professor of Urban Geography at the London School of Economics).

It is not a book to be read quickly and non-economists will find some parts heavy going, especially those littered with mathematical formulae. However, most of the book is accessible to any intelligent reader and, since Piketty’s key arguments are clearly set out, a prior knowledge of these arguments is not essential.

Most of the contributors are left-leaning and share significant parts of Piketty’s political outlook and the editors pin their colours to the mast in their introduction: they ask whether Piketty’s arguments are right or, at least, if they are not definitely right, whether his “disturbing scenario” is plausible and state that “the answer strongly appears to us to be: yes” (page 9). However, the book as a whole is by no means uncritical of Piketty. In fact, parts of it attack the foundations of his arguments and leave his edifice tottering.

Some of the essays are poor. In particular, a few descend into tedious left-wing rants (e.g. the section of Suresh Naidu’s essay entitled “Spheres of Wealth-Dictated Injustice”) and a number contain flashes of imprecise polemic, of which the reference to “proto-fascist populism” in the editors’ introduction is the first example (page 4).

Sadly, the essays of two of the editors (Heather Boushey and Marshall Steinbaum) are among the weakest in the book: Heather Boushey’s “A Feminist Interpretation of Patrimonial Capitalism” contains a few important points but ultimately adds little to the debate whilst Marshall Steinbaum’s “Inequality and the Rise of Social Democracy: an Ideological History” comprises a whistle-stop 30 page economic history of the USA, UK, France and Germany which is packed with contentious and unsupported assertions (of which perhaps the most extraordinary is the statement that the American entry into the First World War “had the flavour of a fanciful, elite foreign adventure”, page 448) and simple factual inaccuracies (such as the assertion that the UK government ministers during the Second World War “were for the most part the Labourites who had long advocated for a planned economy”, page 456). Gareth Jones’s essay (subtitled “Inequality, Political Economy, and Space”) is likewise short on careful logic and long on aggressive attacks on standard left-wing targets.

Parts of the book focus on issues that most people would regard as peripheral to its main subject (e.g. the two chapters that focus on historic – not modern – slavery) and there are a number of points that are assumed rather than argued (e.g. the Fabian sounding belief, expressed by several of the authors, that education is a key to overcoming the equality gap, which needs to be examined in the light of the growing evidence of the existence in a number of countries of a significant number of university educated people who are unable to secure anything other than low paid jobs). Furthermore, there are significant omissions. In particular, despite the commendable desire of the editors to integrate economics and other social sciences, there is no discussion of the impact of the conclusions and policy prescriptions on individual freedom, an omission that is most notable in David Singh Grewal’s essay, “The Legal Constitution of Capitalism”, which chillingly attacks the rule of law on the basis that it upholds capitalism.

These failings unquestionably mar the book but it remains well worth reading. It contains a number of high quality essays and much that should be thought provoking for all readers, whatever their political persuasions. The high points include Devesh Raval’s essay critiquing Piketty’s model, Eric Nielsen’s essay on human capital and wealth, Laura Tyson and Michael Spence’s essay on the effects of technology on income and wealth inequality and Mark Zandi’s essay on the macro-economic implications of rising inequality. Christoph Lakner’s essay regarding the global perspective is also an important correction corrective to the unduly western (or US) perspectives of some of the other essays.

Devesh Raval attacks Piketty’s famous assertion that inequality will continue to rise because r > g (the rate of return on capital is greater than the rate of economic growth). He points out that Piketty’s estimates of the elasticity of capital-labour substitution are out of line with the available literature and suggests that, in fact, capital and labour are not substitutable enough to sustain Piketty’s argument. He goes on to put forward two other explanations for the rise in the capital share of the economy: globalisation and labour saving technical change. These themes are then developed in subsequent essays, notably by Tyson and Spence and by Lakner. The conclusion of the former is that, “Inequality in market-based wealth and incomes is likely to increase over the next several decades, not because of features inherent in the capitalist system, but because of the effects of the digital revolution …” (page 203).

Neilsen questions Piketty’s focus on capital as the market value of tradeable goods. He cogently argues that “the omission of human capital is a serious weakness for both the data and the theory presented by Piketty” (page 151). In particular, he points out that inherited endowments include not merely the financial endowments considered by Piketty but also “social networks, cultural attitudes, and much else” (page 165). He rightly suggests that the inclusion in human capital in the mix is likely to result in policy proposals dramatically different from those put forward by Piketty. Indeed, he is bold enough to point out that, “A possible effect of Piketty’s plan … would be the immiseration of everyone to achieve a reduction in inequality”.

Some of the other contributors are likewise willing to draw conclusions that are unlikely to be welcome to many of Piketty’s supporters. In particular, coming from a global perspective, Lakner asserts that “The available evidence suggests that the Gini index of the global distribution of income has fallen for the first time since the Industrial Revolution, a development that is likely to continue” (page 261) and Zandi suggests that the “hand wringing over the prospects of a further erosion in income and wealth inequality the implications for the economy’s performance”, although reasonable, is likely to be misplaced since “prospects are good that inequality has peaked” (pages 406/7).

Such comments and conclusions demonstrate that, taken as a whole, After Piketty is by no means a simple contribution to the left wing scriptures: it is a serious exploration of the issues raised by Piketty. In fact, perhaps its most valuable contribution to the ongoing debate about inequality is the honest admission in a number of the essays that, despite the wealth of data that is now available and despite Piketty’s analysis, there remains much that we don’t know or don’t understand. Zandi points to numerous methodological and modelling problems that limit our understanding and several of the other authors point to deficiencies in the available data. The result is that, as Mariacristina De Nardi, Giulio Fella and Fang Yang point out in their essay, “Macro Economic Models of Wealth Inequality”, the mechanisms that cause both overall wealth inequality and individual outcomes within that distribution of wealth remain uncertain. Zandi thus wisely concludes, “Macro-economists should … not be comfortable that they have a good grip on what inequality means for our economic prospects” (page 411).

“After Piketty”, edited by Heather Boushey, J. Bradford DeLong and Marshall Steinbaum, was published in 2017 by Harvard University Press (ISBN 9780674504776). 565pp, plus notes.


Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.



Georgina Bishop: “The Ethical Capitalist” by Julian Richer


As an economic system, unfettered capitalism in the post-recession era has come under considerable scrutiny. Reports of business scandals and misdealings, as well as serious social inequalities, are but a few of the most cited examples. In the face of these criticisms, proponents of capitalism have come to its defence. In “The Ethical Capitalist”, entrepreneur Julian Richer joins these proponents, arguing not only that capitalism is the only viable option but also that, when pursued responsibly, it is a force for good.

The founder and owner of the remarkably successful home entertainment retailer Richer Sounds, the author is five times winner of the Which? ‘retailer of the year’ award. He has been an active supporter of the National Living Wage and has taken up the mantel against tax avoidance and in relation to the housing crisis but he maintains that capitalism can be practiced ethically.

Building on over forty years of business experience, Richer begins his book by setting out his understanding of ‘ethics.’ At this point, the reader might be forgiven for any scepticism towards his somewhat simplistic definitions which often revert to rather superficial ideas of what it means to be ethical – as well as quoting mantras such as ‘what goes around comes around’ and you ‘get nowt for nowt’ (page 29).

However, as Richer really gets going with his practical applications, we start to realise that he may just have some valid points. In the first part of the book, he explains how the ethical business should treat its key players – employees, customers and suppliers. Chapter 1 draws into focus the importance of company culture, revealing how costly practices such as employee fraud, theft and absenteeism are often learnt behaviours from management. Being ethical, therefore, involves actively pursuing a positive work culture, starting at the beginning of the hiring process with honest job adverts, which attract the right candidates. Imploring businesses to follow through with prioritising internal promotions, paying a Living Wage and providing ongoing training opportunities, he makes it clear that this is not simply an optimistic vison for business altruism. By changing the way in which a business relates to its employees, it will minimise the cost of high staff turnover and this can only be positive for profitable success.

Chapters 2 and 3 make a similar case for a more ethical approach towards customers, suppliers and supporters. The overall message is that reputation is critical, in so much as it encourages repeat custom and builds crucial relationships. At times, the examples Richer includes from his own business can almost appear too saccharine, such as the time he delivered flowers to the home of a woman after a poor customer service experience.

Some may also challenge his assumption that customers are always concerned about a company’s conduct, more so than lower prices. Could it be that consumer consciousness of certain issues is only significant in periods of high media attention? Nevertheless, businesses are indeed playing a very short-sighted game when they prioritise crisis management over risk management, in a world of increasing consumer savviness and a ruthless social media scene.

In the second part of the book, Richer goes on to tackle capitalism itself, recommending points of reform and highlighting areas where limitation is both intentional and desirable. In chapter four he demonstrates the compatibility of capitalism and the principle of a National Living Wage. Using both national and international examples, Richer argues that higher wages have not automatically equated to fewer jobs. Instead, they improve a company’s reputation, which in turn boosts profitability. The wage-profitability relationship will no doubt be a contentious issue for many readers.

Richer further argues that we need to name and shame those companies which continue to resist it. Again, the assumption that reputation is a make or break factor in consumer decisions underpins his arguments, but he does provide empirical evidence to support his view.

In chapter 5, Richer critiques Thatcherite individualism, arguing that society is very much a reality. Often conveniently forgotten is that government is essential for business, not least because it provides the very environment required for it to thrive. He argues that nobody is entirely ‘self-made’ and we’re called to consider, who runs the banking system necessary for transactions, creates the laws under which businesses operate and maintains the infrastructure which holds everything together? Here too it is suggested that naming and shaming those who purposefully avoid paying their taxes would be effective, drawing on the Scandinavian model as an example. What exactly Richer views as ‘purposefully avoiding taxes’ could benefit from a more detailed discussion.

Taken from a simple game theory perspective, one might reason that it would require more than this to produce change. Businesses may very well take the view that they can ride out an unpopular image if their product or service is valued highly enough and therefore refuse to be the first in their industry to reform. Nevertheless, if we accept that consumers are becoming ever-more discerning, Richer is right to assert that capitalism doesn’t have to equal the eradication of civil society.

Finally, in chapter 6, we are cautioned that the principles of the free market cannot and should not be applied everywhere. Using privately run prisons as a key example, Richer instead focuses on the separation between ownership and management. Whilst this is perhaps the hardest of his arguments to follow, as it is unclear where exactly we should draw the line, separating complex social needs from simplistic market equations is a refreshing message from a believer in capitalism, who recognises that it need not be all or nothing.

Richer leaves business owners with the charge to get started somewhere in making a difference – and he’s provided plenty of examples and inspiration throughout his book to get them going. Despite possible criticism that his ideas rest upon certain assumptions about motivation for human behaviour, his argument that treating people well is not only admirable but also good for business, is compelling, well-evidenced and convincingly nuanced.


“The Ethical Capitalist” by Julian Richer was published in 2018 by Random House (ISBN-13: 978-1847942197). 192pp.

Georgina Bishop is Senior Editorial Assistant within the Social Sciences at Routledge. She obtained her BA in History and Politics from the University of Nottingham in 2016.

Richard Godden: “The Community of Advantage” by Robert Sugden

Neoclassical normative economics seeks to avoid state paternalism. On the assumption that human beings display “integrated preferences” (i.e. preferences that are stable, context-independent and internally consistent), this objective may be secured by public policy objectives being based on “preference-satisfaction”. However, psychological experiments over the past 30 years have demonstrated that the assumption is false: human preferences are highly context-dependent (e.g. people display loss aversion and thus value an item more when they possess it than when they do not). This finding challenges neoclassical economics and raises the question whether there is no alternative to centre-left paternalism.

Professor Robert Sugden of the University of East Anglia thinks that there is an alternative and in The Community of Advantage makes “an attempt to maintain the liberal tradition against … a challenge from behavioural economics” (page 4).

Sugden dismisses previous efforts to meet that challenge. In particular, he takes on those who argue that, whilst human decisions may be influenced by irrational factors, people have “latent preferences” which may be used as a plumb line for preference-satisfaction. He asserts that there is no experimental basis for believing that such preferences exist and thus they cannot form the foundation of welfare planning. He thus dismisses Sunstein and Thaler’s concept of welfare planners creating conditions in which people are “nudged” towards decisions that satisfy their latent preferences. In short, Sugden shares Hume’s scepticism about human rationality and believes that economics should proceed on the basis that such rationality does not exist.

Some might conclude that this leaves liberal economics nowhere to go. However, Sugden suggests that it can be saved by the substitution of what he calls the “Individual Opportunity Criterion” for the traditional preference-satisfaction criterion. He argues that, “as viewed by each citizen separately, more opportunity for that person is better than less” (page xi) and hence he attaches “normative significance to opportunity sets without explicit reference to individuals’ preferences” (page 115). He defends this approach on the basis that it treats humans as responsible agents and the concept of responsibility “provides philosophical underpinning for the claim that opportunity has value” (page 106).

Sugden sets this proposal in the context of “a contractarian perspective”. He points out that, whether expressly or impliedly, economists normally address “an impartially benevolent autocrat” (page 23) and argues that it is both more useful and more consistent with a liberal view of society, to adopt the point of view of individual participants in society: “the most fundamental characteristic of this perspective is that a recommendation is addressed to a set of individuals, showing those individuals how they can coordinate their behaviour to achieve mutual benefit” (page 37).

This is, of course, a liberal, market-based view and Sugden, therefore, examines and defends the moral status of market relationships. He recognises that the findings of behavioural experiments challenge the idea that the achievement of mutual benefit is generally well served by the free actions of self-interested agents in competitive markets. Such experiments have found situations in which self-interested agents would fail to realise opportunities for mutual benefit but ordinary human beings succeed in doing so. Sugden, however, argues that it is wrong to think that there is “a fundamental opposition between the attitudes that are expressed in market relationships and those that are expressed in genuinely social relationships” (page 207). His conclusion is that “it may be possible to think of market relationships as expressing cooperative attitudes that are complementary with kinds of pro-sociality that can help individuals to solve collective action problems” (page 208).

Underlying these ideas is a long history of philosophical thought. The “contractarian” viewpoint is expressly derived from the thinking of Hobbes and Hume and a nuanced view of human behaviour in a market context can be traced back to Adam Smith (see Humanomics by Vernon Smith and Bart Wilson, which is reviewed on this website). More fundamentally, as Sugden acknowledges, he is greatly indebted to John Stuart Mill’s concept of the market as a “community of advantage”, hence the title of his book.

Sugden’s approach is thus vulnerable to some of the charges levelled against his philosophical forebears. In particular, many will question the moral relativism inherent in it and point out that, despite his best efforts to eliminate absolute moral values, the statement that “the ultimate authority for judging what is in a person’s interests is that person himself” (page 83), which underlies the Individual Opportunity Criterion, appears to be an assertion of an absolute reference point.

The psychological foundations of Sugden’s approach are of more recent origin than its philosophical foundations and some caution is required in relation to them. The results of “trust games” and similar experiments are not in doubt but the interpretation of at least some of their findings is controversial, as Sugden himself acknowledges. Consequently, whilst his case for the consistency of his theory with human psychology is persuasive, it is not conclusive. In particular, whilst it is clear that people often do not display “integrated preferences”, it is not clear that the concept of rational preferences must be completely discarded. Sugden asserts that he does “not want to claim that individuals are never conscious of akrasia” (i.e. acting against their better judgement; page 81) and, once this concession has been made, one has to take seriously the possibility that individuals have some latent preferences (their “better selves”) even if this concept cannot bear the weight that has sometimes been placed on it by economists.

Many readers will thus take issue with much of what Sugden says. However, those who dislike his moral relativism may still accept that a “contractarian” viewpoint is useful and those who disagree with his view of human psychology should still take note of the fact that he is suggesting that a liberal approach to economics is justified even if one adopts this. Furthermore, the philosophy inherent in his defence of the market economy should not distract from the fact that his underlying position is one that can be endorsed by a wide spectrum of people. The final few lines of the book are worth quoting in full:

“I share Mills’ conviction that cooperation for mutual benefit is the fundamental organising principle of a well-ordered society. The market is not, or should not be, an arena of non-moral, instrumental motivation from which practices that are more genuinely or more intrinsically valuable need to be insulated. Market transactions are a crucial part of the network of cooperative relations that make up civil society” (page 281).

The Community of Advantage is not an easy read. Indeed, Chapter 6 (The Invisible Hand) is such heavy going that some readers may be tempted to give up at that point. However, the reader who leaves out some parts of the book will still benefit from other parts and the fact that large parts are stitched together sections of previously published papers is helpful since key concepts are considered on a number of occasions.

Those who persevere with the book will be rewarded. Whatever one’s philosophical starting point, it is worth reading.


“The Community of Advantage” by Robert Sugden was published in 2018 by Oxford University Press (ISBN 978-0-19-882514-2). 281 pp, plus notes.


Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.







Richard Godden: “Humanomics: Moral Sentiments and the Wealth of Nations for the Twenty-First Century” by Vernon L. Smith and Bart J. Wilson


Economics is a social science. It relates to the behaviour of human beings and its success as a science turns to a considerable extent upon its ability credibly to model that behaviour in such a way as to enable reliable predictions to be made.

Neoclassical economists have focused on the concept of utility maximisation as a governing model (“Mr Maximise Utility” or “Max-U”). This approach has come under sustained attack in recent years and Nobel Prize winning economist Vernon Smith and his colleague at Chapman University, Bart Wilson have been at the forefront of these attacks. Humanomics is their latest salvo. It brings together in a concise form (the book being only 207 pages long) the research and thinking that they have undertaken over the past couple of decades.

Smith and Wilson accept that Max-U “served well-enough the observational demands of decision in market supply and demand experiments under perfect enforcement of property” (page 159) but they point to its failure to account for the results of two person trust game experiments of the past 30 years. They argue that a new theoretical model of the relevant human behaviour is necessary, and they seek this in Adam Smith’s first book, The Theory of Moral Sentiments (1759). They suggest the theory put forward in that work both explains modern experimental results and has predictive force.

Most prospective readers of Humanomics will have heard of Adam Smith’s later and more famous work “An Inquiry into the Nature and Causes of the Wealth of Nations” (1776) but it is likely that few will have read The Theory of Moral Sentiments and many will question whether a largely forgotten book written over 250 years ago is worthy of resurrection. However, few will have any doubts on this score once they have read what Smith and Wilson have to say about it.

The first half of Humanomics largely comprises an explanation of the perceived problem in the concept of utility maximisation, the dismissal of previous attempts to solve that problem and a detailed analysis of Adam Smith’s theory. It includes a close examination of Smith’s terminology, which is vital since some of his key concepts are no longer in everyday use (e.g. “beneficence”) and others of them are used in a sense that does not quite correspond to some modern usage (e.g. “sentiments”). Having done this, Smith and Wilson move on to extract various axioms, assumptions and principles from Smith’s work. Some of these may seem self-evident but the reader may have a sneaking suspicion that many economists have forgotten them (e.g. “Axiom 1: Human beings fellow feel with each other”, page 71). Others are less obvious but appear to correspond with everyday experience (e.g. “Axiom 4: As compared to a normal baseline condition, human beings experience an asymmetrical change between feeling something good (e.g. joy) and feeling something bad (e.g. sorrow)”, page 73 – an axiom which is evidenced by the disconcerting fact that vendettas tend to have rather longer lives than alliances).

Smith and Wilson particularly stress Adam Smith’s concepts of “fellow feeling” and “the impartial spectator”. Quoting Deirdre McCloskey’s Bourgeoise Equality (which is reviewed on this website), they point out that we misunderstand Adam Smith if we focus solely on his concept of the invisible economic hand of the market place: Smith saw two invisible hands, the second being the social hand of the impartial spectator (pages 5-6). We are social beings and, as Adam Smith put it, “we endeavour to examine our own conduct as we imagine any other fair and impartial spectator would examine it” (page 75).

Having set out their theoretical stall, in the second half of the book, Smith and Wilson move on to summarise the results of the trust game experiments of recent years and explain them by reference to the theory. They suggest that this provides a convincing explanation of a number of the experimental observations. For example, they suggest that it explains why many people are willing to take a financial risk by trusting another person (even an unknown stranger) to “do the right thing” and why a clear majority of people, having been trusted in this way, prove trustworthy even though they could benefit financially by being selfish and even though this selfishness would never be known to anyone other than themselves. It may even explain the counter intuitive fact that the addition to the trust game of a mechanism whereby the first person can financially punish the second if they are selfish increases rather than reduces the incidence of selfish behaviour

Humanomics is a dense book that requires detailed study. It also contains a significant amount of mathematical and quasi-mathematical propositions, which will put off some readers. However, it repays careful attention, most of the maths will be understood by those who have some experience of formal logic and, since all of the key arguments are explained verbally, other readers can skip the maths without thereby losing the thread of the argument (although, in a few places, they may worry that they have missed something).

Inevitably, the book has shortcomings. For example, in places, it betrays the fact that large parts of it comprise reworked papers published previously by the authors and other collaborators (e.g. there is a lot of repetition and the end of chapter 10 reads like the climax of the book even though three more chapters follow it). More seriously, many readers will find the explanations of the experiments so compressed as to be hard to follow, at least without reading on and then referring-back to earlier parts of the book. Furthermore, the book does not explore the economic or policy implications of the experimental results and theoretical explanations advanced in it, although it contains tantalising hints of some of these (e.g. the comment that some “features of good conduct cannot be extorted, coerced or legislated”, page xv).

More seriously, whilst the authors have done an excellent job in analysing Adam Smith’s theory of moral sentiments, they have barely scratched the surface of a critique of it. Of course, at a high level, they are arguing that its predictive power suggests that is passed the test of being a good theory. However, a close examination of their experimental results suggests that the predictive value may not be as great as they would like to believe. Furthermore, they don’t examine the origins of the sentiments that Smith finds in human beings: they accept Smith’s assertions that either “they seem to have been given us by nature” (page 46) or they arise inexorably from the process of socialisation (e.g. page 74).

For some purposes, this deficiency doesn’t matter but many Christians and other theists will wish to suggest that there is a deeper, more fundamental explanation of human nature. Furthermore, the failure to examine closely the origins of human sentiments leaves open the question whether and to what extent they may be culturally relative and thus less universal than Adam Smith believed. For example, it may be that, at the very high level of generality dealt with by the axioms, principles and assumptions identified by Smith and Wilson, human sentiments are universal. However, what humans perceive to be worthy of gratitude and resentment (to quote Axiom 3, page 71) and, more generally, what is perceived to “satisfy our social impulse” (Principle 1, page 74) may vary from time to time and place to place.

Deirdre McCloskey considers the impact of changes in ideas in works such as Bourgeoise Equality and articles such as Adam Smith Did Humanomics: So should we (2016) and Max U versus Humanomics: a critique of neo-institutionalism (2015). It is clear that her theories and those of Smith and Wilson are related but it would be interesting to explore further whether, ultimately, hers are more subtle and ultimately more persuasive than those of Smith and Wilson or, for that matter, those of the great Adam Smith himself.

That said, one should not criticise a book for not being the last word on a subject or for giving rise to questions that require further attention. Humanomics is deeply thought provoking and, although not an easy read for the non-specialist, should be read by those who want to think further about human economic behaviour.


“Humanomics: Moral Sentiments and the Wealth of Nations for the Twenty-First Century” by Vernon L. Smith and Bart J. Wilson, was published in 2019 by Cambridge University Press (ISBN 978-1-316-64881-0). 207pp.

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.







Richard Godden: “The Job” by Ellen Shell


The Job has received rave reviews and it is easy to understand why. Its subject is an important one, the future of work in the digital age, and it is the kind of book that people like. Shell is a journalist who writes well, using eye-catching turns of phrase and telling innumerable stories to provide human interest. She taps in to the feeling that all is not well but, as the book progresses, shifts from heart-breaking stories to heart-warming stories, suggesting that we can do something about the problems that she has identified and that there is a bright future in front of us. Indeed, the book ends with a rallying cry: “Let’s shake off the dread and recalibrate our priorities. The Enlightenment ideal of human advance lifting us from a life of toil into a life of purpose and meaning is at our doorstep. We only need to muster the political will – and the trust – to answer the bell” (page 322).

In the course of this progression from worry to hope, Shell makes some important points and raises important issues, especially relating to the place of work in society and in individual lives. Her focus on the impact of work on people is to be applauded and represents a valuable corrective to those academic tomes that, intentionally or unintentionally, depersonalise economic activity.

Unfortunately, however, The Job is a deeply flawed book. It contains little by way of true economic analysis and, whilst most of the stories are interesting, Shell makes few attempts to analyse the extent to which each of them is typical or what lessons we may legitimately draw from them.

More fundamentally, it is hard to know precisely what Shell is advocating. In the introduction, she states that “In what follows, I make the case to squarely place the innovation of sustainable and worthy work on our public agenda” (page 14) and she constantly refers to “good work”. However, she never defines what she means by this. In some places, she appears to have a somewhat romantic view of work in factories in the twentieth century (e.g. “For many workers, factories can be a kind of second home, and fellow workers a second family”, page 100) but she recognises that there can be no return to the past; in other places, she appears to equate a “good” job with a reasonably paid job (e.g. when she quotes statistics about pay in the United States, page 58) and the subject of the book is largely paid work, although she also recognises the value of unpaid work. More fundamentally, she appears to agree with Michael Pratt that “the quest for meaning through work is among life’s most powerful drivers” (page 97), yet she also suggests that we should not be seeking meaning through work, (page 134).

It is hard to work out exactly what she believes the problem to be. Having apparently, in the early chapters, lamented and explained (at least to her satisfactory) the decline in “good” work and asserted that we need to respond “as good jobs grow scarcer” (page 134), towards the end of the book, she dramatically states that “our National Work Disorder is not really about scarce opportunities: there will always be more than enough good work to go around” (page 319).

Unsurprisingly in light of the confusion as to the nature of the problem, Shell’s “solutions” are unclear. She states that “For many if not most of us, the first step is to question the hard-held assumption that we must make ourselves a good fit for the job rather than create work that is right for us, work that we control rather than a job that controls us” (page 66). Yet later she quotes Michael Pratt as saying that “it’s a dangerous business to advise young people to ‘follow their passion’. Most of us never find one, at least not one that pays the bills” (page 106).

She is equally confused in relation to job stability. Having early in the book demonstrated the decline of the life-long job, one of the stories towards the end of the book illustrates the warmth generated by one particular initiative by quoting an employee who states that they “plan to spend 40 years with this company” (page 310). Shell gives no warning that this may be a pipedream.

The detailed “solutions” put forward in the second half of the book are a hotchpotch of ideas which Shell would doubtless defend on the basis that they illustrate the fact that there is no one over-arching “solution”. However, the solutions themselves are full of contradictions and lack adequate analysis. For example, she spends some pages talking about promoting arts and crafts and asserts that “for every hundred jobs created directly in the arts, sixty-two more jobs blossom in retail, information technology, manufacturing, hospitality, and food service” (page 201). However, she appears to have forgotten what she herself has said about the unreliability of craft production (page 99) and the far greater leveraging effect of heavy industry (page 177). Likewise, her feel-good stories about cooperatives, employee ownership, the use of wasteland and small manufacture, whilst illustrating initiatives that are commendable and doubtless enriching the variety of economic and societal activity, smack more of romanticism than serious proposals for economic change. One of the big problems with Shell’s proposals is that she gives no evidence that they are scalable.

Some of Shell’s other ideas leap from nowhere and are inadequately worked through or justified. These include the suggestion of modifications in the tax structure to incentify employers to create “not just more jobs but better jobs” (page 236) and the suggestion of a “Basic Income Guarantee” (page 315ff). Shell might respond that, in some cases, she is merely noting what others have suggested and, in others, she is merely putting forward ideas for further discussion. However, if this is the case then the book is saying little that is new, which is not its claim.

Following a deluge of stories towards the end of the book, Shell says, “Great stories, sure, but you have every right to ask, “What’s your point?”” (page 311). Indeed we do and this question may be applied not only to the stories in the chapter in which it appears but to the book as a whole. It may well be that one of the main reasons for the popularity of the book is that, by asserting so many different things (including things that are contradictory), by avoiding specificity and clarity and by not committing unequivocally to particular ideas, the book can be all things to all people (at least those of a mildly centre-left disposition). In any event, whilst many will enjoy reading The Job and will be stimulated by parts of it, those who are seeking careful analysis and clearly worked through proposals need to look elsewhere.



“The Job” by Ellen Shell, was published in 2018 by Currency, an imprint of Crown Publishing Group, a division of Penguin Random House (ISBN 978-0-4514-9725-3). 326pp, plus notes.

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.


Richard Godden: “Bourgeois Equality” by Deirdre McCloskey

The past 200 years have seen a huge increase in aggregate global wealth, which has benefited the vast majority of people around the world. Conservative estimates suggest that average real wages have increased ten-fold and the increase in wealth has probably been considerably greater than this (perhaps thirty-fold or even a hundred-fold). Why has this happened? Why are we now so rich? This is the fundamental question that Deirdre McCloskey seeks to address in Bourgeois Equality, the final volume in her trilogy relating to bourgeois values.

Those who have not read it may doubt that we needed yet another book about “the causes of the Industrial Revolution”. Those who have read it will disagree. Its scope is breath-taking: in which other book about economic development would you find 20 pages of analysis of the novels of Jane Austen, two chapters relating to the historical change in the meaning of the word “honest” and its equivalents in other languages, a discussion of the economic impact of post-millennialism and comments on subjects as diverse as the philosophy of the mind and the economics of the temple systems of the Ancient Middle East? McCloskey is Distinguished Professor of Economics, History, English and Communications at the University of Illinois in Chicago and her inter-disciplinary approach to her subject is anything but conventional.

She begins by attacking almost all of the widely accepted explanations of what she calls “The Great Enrichment”: trade and export lead growth (whether or not accompanied by political domination); the accumulation of capital; consumer lead demand; the scientific revolution; the growth in modern institutions; and much else. The role of some of these things is dismissed in summary terms, often with a quotable quote. Other factors (such as property rights, the accumulation of capital and trade) are recognised as being, to some extent at least, necessary for economic growth but dismissed on the ground that they are historically commonplace. As McCloskey puts it, “Oxygen is necessary for a fire but it would be at least unhelpful to explain the Chicago Fire of October 8-10, 1871 by the presence of oxygen in the earth’s atmosphere” (page (xiii)).

In place of the normal list of explanatory factors, McCloskey puts “ideas”. The book is subtitled, “How ideas, not capital or institutions enriched the world” and McCloskey asserts that the key thing that changed in the period leading up to the start of The Great Enrichment was “ideology” (page xxii). Her claim is “that the initiating change leading The Great Enrichment was in words” (page 235) and she spends hundreds of pages defending this thesis. She argues that aristocratic values were replaced by bourgeois values (“The new ethic was of betterment, novelty, risk taking, creativity, democracy, equality, liberty, dignity”, page 279) and this led to the wave of innovation that she calls, “trade-tested betterment”, which directly resulted in The Great Enrichment, first in the UK and then elsewhere.

So is McCloskey’s theory simply Max Weber revisited? Although, unsurprisingly, McCloskey dismisses Webber’s view of the role of anxiety caused by the doctrine of predestination, her approach is clearly related to that of Weber, probably more closely than she would admit. It is based on ideas rather than material causes and recognises the profound role of religion in the creation of the relevant ideas. However, there are important differences between Weber’s and McCloskey’s approaches including their opinions as to precisely which religious beliefs gave rise to the key ideas and the relationship between, on the one hand, these ideas and, on the other, psychology and sociology.

Speaking generally, it would be reasonable to assert that McCloskey believes that the crucial change between 1600 and 1800 was a cultural change. However, she vigorously objects to this characterisation of her view, saying that calling ideas “culture” is “the vague way people talk when they have not actually taken on board the exact and gigantic literature about ideas, rhetoric, ideology, ceremonies, metaphors, stories and the like since the Greeks or the Talmudists or the Sanskrit grammarians” (page 122). She also, and perhaps with more justification, is at pains to point out that she is not asserting that there was a psychological change but rather that there was a sociological change.

McCloskey writes passionately and this passion points to a key issue: deep down, this book is not about the causes of Industrial Revolution but about how we should behave today in order to ensure that The Great Enrichment does not stall. McCloskey says that she is an optimist but she is clearly worried that things could go badly wrong. As she puts it, “Modern politics is a four-way tug of war between liberalism in the sensible part of the elite, socialism in the rest of the elite, traditionalism in the peasantry, and populism in the proletariat” (page 136). She turns aside from her central thesis to attack the left’s focus on equality of outcomes (and specifically the Gini coefficient), the power of the state to secure economic betterment (which she contemptuously dismisses), the idea that mechanisation and betterment causes poverty rather than wealth, regulation in general and what she refers to as “well-intentioned but erroneous policies that make us feel helpful even when they in fact damage the people we intend to help” (page 73).

She reserves her most savage comments for what she calls “the clerisy”, a term that she uses to refer to academics and intellectuals who sneer at Bourgeois values and promote either socialism or, on the other side of the political spectrum, nostalgic paternalism or worse: “The liberty of the bourgeoisie to venture was matched by the liberty of the workers, when they got the vote, to adopt growth-killing regulations, with a socialist clerisy cheering them on. And the dignity of workers was overmatched by an arrogance amongst successful entrepreneurs and wealthy rentiers, with a fascist clerisy cheering them on. Such are the usual tensions of liberal democracy. And such are the often mischievous dogmas of the clerisy” (page 404).

A book written with such passion and having such a broad scope inevitably has its defects. McCloskey has a tendency to overstate things (e.g. her assertions regarding the ubiquity of the rule of law including, surprisingly, in the empire of Genghis Khan, page 111, cannot go unchallenged); many other academics could legitimately feel bruised by the strength of the language with which she attacks them; and the book is too long, the final 150 pages in particular containing much material that repeats earlier points. There are also less important issues: errors of fact (e.g. Rev John Newton was not a Quaker as it stated on page 306); ex-cathedra statements that many will dispute (e.g. “Ordinary Europeans in the Middle Ages were barely Christian”, page 333); and statements that will only be comprehensible to a minority of readers (e.g. the reference to Ian Botham hitting a six, page 126).

However, these defects should not put anyone off. The book is essential reading for those who want to broaden their perspective on the causes of our current prosperity and to consider possible solutions to current economic and societal issues in the light of the lessons of the past. McCloskey’s passion is justified by the importance for her subject for the modern world. The onus is now on those who disagree with her arguments to answer them and on those who agree with these arguments to refine them.




“Bourgeois Equality” by Deirdre McCloskey was published in 2016 by The University of Chicago Press (ISBN-13:978-0-26-52793-2). 650 pp.

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.








Richard Godden: “Redeeming Capitalism” by Kenneth J. Barnes

Kenneth Barnes currently holds the Chair in Work Place Theology and Business Ethics at Gordon-Conwell Theological Seminary. As might be expected, therefore, Redeeming Capitalism is about the theology and ethics of business. Its basic argument is simple: the capitalist economic system that now exists is not the same as that which has existed in the past and, specifically, is not that endorsed by Adam Smith; it suffers from serious flaws that derive from a “moral vacuum” (page 1), which is itself a product of post-modern thinking; yet no other economic system provides a better workable alternative, the thinking of writers such as Picketty and Poole is hopelessly Utopian (pages 81 and 86, respectively) and the solution does not lie in regulation (page 59); what is needed is, essentially, moral reformation and the replacement of “post-modern capitalism” (Chapter 6) with “virtuous capitalism”, being capitalism based on Aquinas’s cardinal virtues (Chapter 13).

There is little to criticise in this as an overall thesis. However, below this very high level, much of what Barnes says is superficial, questionable or simply wrong. Indeed, it is an example of the kind of thing that, a generation ago, Peter Bauer memorably described as “ecclesiastical economics”.

The book is littered with errors. Some of these are minor (e.g. the statement on page 23 that the lingua franca throughout most of the Roman empire was Greek). However, others are more serious. In particular, Barnes’ attack on the behaviour of investment banks in the run up to the Global Financial Crisis is undermined by mistakes such as his definition of derivatives as instruments predicated on the “anticipated performance, or cashflow” of the underlying assets (page 4, emphasis added) and his assertion that, whilst what people do with their own money is largely their business, the problem is that “investment banks deal with other people’s money, and the morality of gambling in the context, is at best, questionable” (page 7). The definition is only true of some derivatives; the assertion fails to recognise that it was proprietary business (i.e. banks dealing for their own account) that lay at the heart of the Global Financial Crisis, not agency business.

Overall, Barnes’ attack on modern capitalism is long on eye-catching statements and short on justification. His stark statement that “the cause of the Global Financial Crisis and the recession that followed was corporate greed and mismanagement” (page 71) is a case in point, as is his assertion that there is a “consensus that the financial services sector is rigged and that corruption and collusion between banks, central banks, regulators, and politicians is rampant” (page 75).

Furthermore, scattered through the book are remarks about particular issues that fail to engage with the underlying arguments. For example, his statement that “on average, women are paid about 20% less than men across the entire spectrum of the economy” (source unstated) followed by the assertion that “the numbers are simply too extreme not to be attributable, at least in part, to gender discrimination” (page 127) is inadequate. His statement (this time sourced) that “nearly eight per cent (7.8%) of Morgan Stanley’s employees went to Ivy League schools even though they represent less than one half of one per cent. (0.4%) of university students” (page 127) is not in itself problematic. However, he implies that the success of Ivy League students is the result of nepotism and is an “economic injustice” (page 128) but he never presents evidence to support these claims.

Barnes’ comments on the living wage are likewise superficial. He says that “Those who oppose this concept argue that it interferes with the free market and is therefore a fundamentally bad idea” (page 138) and later asserts that “It seems obvious to some … that the only real objection to the establishment of the living wage is the short-term effect it would have on company profits” (page 138). He has clearly not absorbed the writings of those like Thomas Sowell who presents cogent reasons for thinking that the living wage harms those it is supposed to protect.

A substantial part of the book is taken up by what Barnes concedes is “a very concise history” of economics (Chapter 2) and analyses of the views of Adam Smith, Karl Marx, Max Weber and some modern writers (Chapters 3 to 7). These chapters contain interesting material. Barnes highlights some points raised by Adam Smith that many today forget and rightly pinpoints some serious deficiencies in the views of others. However, the result of this is that Barnes doesn’t turn to his proposals until page 91 of his 207 pages. Rather less history would have left room for rather more precision in Barnes’ analysis of the current situation and his proposed remedies.

Unfortunately, the proposed remedies rarely go below a high level of generality and such specificity as he provides is unconvincing. For example, he mentions credit unions and micro finance initiatives but clearly they cannot constitute the solution to the macro problems of the world economic system. More seriously, his suggestion that we need to move from a system based on contract to a system based on covenant is bizarre. He suggests that “covenants are sacred oaths of mutual inter-dependents and fealty between two parties dedicated to a common cause” and that “Unlike contracts, which are based upon suspicion and anticipate violation, covenants are built upon mutual respect and trust and presume co-operation” (pp 164/5). Barnes never explains what he believes should happen in the commercial world in consequence of this but, in any event, what he says is not true. One can define words to mean anything but, in the commercial world, contracts are by no means always based on suspicion and by no means always anticipate violation. Indeed, normally, they simply define with precision the subject matter of the transaction, allocate risk and generally record the mutual understandings of the parties. Disputes are the exception not the rule.

The reader is provided with no ideas as to how in practice “virtuous capitalism” might be brought into being and, having finished the book, is likely to be left wondering whether he has simply been asked to favour moral good against immorality. Indeed, the reader might wonder whether, despite Barnes’ attacks on Utopianism, he has merely had his own dream of Utopia.

Barnes may have anticipated this criticism since, right at the end of the book he asserts that “This book is not the manifesto of a movement, but is the credo of a community that refuses to underestimate the power of God to do the impossible against great odds” and continues “Redeeming capitalism is not a project; it is a mission” (page 206). Giving people the desire to effect change and the hope that it can be achieved is worthwhile yet, after 200 pages, one might have hoped for more than simply “I believe in virtuous capitalism”!


“Redeeming Capitalism” by Kenneth J. Barnes, was published in 2018 by Wm. B. Eerdmans Publishing Co. (ISBN 978-0-8028-7557-0). 207pp.

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.

Andrei Rogobete: “The End of Growth: Adapting to Our New Economic Reality” by Richard Heinberg


Richard Heinberg is an American journalist and author that has dedicated most of his writing career to environmental causes. His most notable works include publications such as, The Party’s Over: Oil, War, and the Fate of Industrial Societies (2003), and Powerdown: Options and Actions for a Post-Carbon World (2004).

Just from the book titles alone, an astute reader can gain a sense of Richard Heinberg’s environment angle. Indeed, there is a common thread that flows throughout his body of work and which is probably best exemplified in the book we are reviewing here: The End of Growth: Adapting to Our New Economic Reality (2011).

In a nutshell, Heinberg’s thesis is this: Global economic growth as we have become accustomed to over the past century or so is “…over and done with” (page 1). When talking about “growth”, Heinberg is referring here to the overall size and expansion of the economy, i.e. an increase in both consumption and production (ibid.).

So how come? Why will there be no more economic growth? Throughout the book Richard Heinberg builds his argument on three main assumptions. First, the depletion of natural resources (fossil fuels & minerals). Secondly, the negative environmental impact of exploiting resources (e.g. Deepwater Horizon, the BP oil spill disaster). And thirdly, the ‘financial disruptions’ caused by our defective banking and regulatory system and its inability to deal with both “resource scarcity and soaring environmental costs” (page 2). For these three main reasons, historical records of economic growth are no longer sustainable in the future.

Let’s turn slightly to the structure and content of the book. “The End of Growth” is well-written and thoroughly researched. From the onset, it becomes apparent that the author has a wealth of experience and knowledge of the subject. Indeed, Heinberg spent over two decades examining and writing about environmental issues and this clearly shows throughout the book.

The book is structured around seven main chapters. The first two open the discussion with a more generalised debate on historical economics and the influences of both Marxist and capitalist ideology in shaping the current state of global macroeconomics. Heinberg also talks about the financial crisis of 2007/8 and how the actions of the Federal Reserve (like Quantitative Easing) are akin to a “Ponzi Scheme” that could ultimately lead to rising interest costs and even currency failure (page 75).

Chapters three and four turn towards the environment and the limitations of earth’s natural resources. Economists and experts in the field have largely ignored the obvious: natural resources are finite. As they become increasingly scarce, the race and exploitation in finding them will have dire consequences on the environment. The BP Oil Spill is given as a clear example of how petroleum companies need to search in deeper and more dangerous areas to find oil. Heinberg goes through all the major natural resources and explains their limitations, including, Oil, water, food, and metals. In chapter four Heinberg remains sceptical that new technologies and innovations will be sufficient to promote growth and stop climate change. He asserts that, “Civilisations advance human knowledge and technical ability, but they also tend to generate levels of complexity they cannot support beyond a certain point. When that point is reached, civilisations decline or collapse” (page 187).

Chapters five and six move the discussion toward a more international dimension. Heinberg effectively sees China’s recent economic growth as a “bubble” (page 190). A bubble that is overwhelmingly dependent on favourable age demographics and a reliance on coal as a primary energy source. Chapter 6 talks about how ill-equipped our current geopolitical system is to both adapt and succeed in a post-growth, contracting economic climate.

Finally, chapter seven concludes with an explorative study in how society (especially civil society) can adapt and grow in a post-growth world. In short, Heinberg believes that organising and local community initiatives will have a crucial role to play. He speaks about “Transition Towns” and “Common Security Clubs” where “The work of local groups should include the sharing of practical skills such as food production and storage, home insulation, and the development and use of energy conserving technologies.” (page 270).

At the end of the day, Richard Heinberg’s “The End of Growth: Adapting to Our New Economic Reality” remains something of a paradox. On one hand, the core of his message rings true: we are consuming and in some cases, abusing resources that are by definition, finite. On the other hand, it feels like the book is too pessimistic and sceptical – it underestimates the power of new and innovative technologies and overemphasises the negative impact of consumerism. For instance, his analysis on electric cars in Chapter four (page 159) is superficial at best. Heinberg fails to consider the rapid advancement in battery technology and their ability to store power.

Readers in search of a gloomy, sceptical analysis on the future of the environment and economic growth should pick up this book. Those seeking a more balanced account should look elsewhere.


 “The End of Growth: Adapting to Our New Economic Reality” was published in 2011 by Clairview Books (ISBN-10: 1905570333). 231pp.

Andrei Rogobete

Andrei Rogobete is a Research Fellow with the Centre for Enterprise, Markets & Ethics. For more information about Andrei please click here.

Ben Cooper: “An Idol Unmasked: A Faith Perspective on Money” by Peter Selby


Peter Selby’s polemic against modern money, An Idol Unmasked, was published a few years ago now, in 2014, but captures an attitude to money and modern finance that remains widely prevalent. It is, as he says, a book ‘about money, what it has become, and what it represents in our lives’ (page 3). His key claim, expressed repeatedly throughout the book, is that money has acquired the characteristics of an idol. It now rules peoples’ lives in a way it never quite did before. ‘The quite widely held view,’ he says, ‘that money is not in itself harmful, only the love of it or greed for it, is turning out to be out of date’ (page 3). Over two of the main chapters, Selby links this claim to the decreasing sovereignty of nation states over money, and the increasing role of global financial institutions in the creation and movement of money. More than that: ‘money has long since passed from the control of the public authorities and has become itself the major controlling force behind the organisation of society’ (page 30). Having identified the idol of money and its power over us, he then turns in the final chapters of the book to some theological reflection.

One immediately obvious flaw with Peter Selby’s claim to have unmasked the idol of money (expressed, for example, in the title of the book) is the inconvenient truth that associating money with idolatry is hardly a new idea. Identifying money as an idol or potential idol has deep roots in Judeo-Christian thought. It’s there in the Hebrew Prophets, in Jesus’ teaching about ‘Mammon’, in the apostolic teaching about greed (‘which is idolatry’, Col 3:5), and plays in important role in Christian ethical discourse thereafter. Selby clearly knows this, and even makes reference to some of this material, but seems strangely slow to acknowledge or engage with what others have said.

To be saying something new, Selby needs to demonstrate that money has changed somehow – that it has become ‘more of’ and idol, with a more powerful role over peoples’ lives than it has ever had before. But the argument here is unclear. One problem is that he never quite defines what he means by ‘money’, and seems to use the word in a number of different ways — sometimes referring to currency, sometimes wealth, sometimes ‘a set of ideas’ or even a ‘controlling force’. Another problem is the absence of any evidence or data beyond the anecdotal to back up the claims being made. These are basic issues of method. There also seems to be an insufficient grasp of some of the issues. For example, Selby argues that the globalization of money creation – removing some of the sovereign power once possessed by individual nation states over their currencies – has given money a destructive, anarchic life of its own, ‘acting only on its uncontrolled instinct to produce more of itself’ (page 53). It doesn’t seem to occur to him that the decentralization of money creation might have some good features – taking away too much power from any one player in the system, for example. No doubt there’s much more to say on this, and these are complex issues. The problem is: the issues and counter-arguments are hardly raised at all. Selby generates considerable heat as he develops his polemic – but not much confidence in his depth of understanding.

What then of the theological reflection towards the end of the book? This begins well enough with some reflections on the nature of idolatry. But we then get some very strained readings of Jesus’ parables as anti-market polemics (pages 98–110) – a classic case, if ever there was one, of someone reading into a text precisely what they want to hear. Weaker still is the proposed solution to the problems Peter Selby finds in modern money – what he calls ‘the mercy economy’ (pages 111–126). Given everything he’s said earlier in the book, this rather surprisingly doesn’t seem to involve getting rid of money altogether. It is in fact quite hard to work out quite what it is or might involve, beyond perhaps some debt forgiveness and maybe, perhaps, some kind of universal basic income (page 124). Whatever the ‘mercy economy’ is in detail, Selby seems to be suggesting that the solutions to the problems of money-idolatry lie in structural change or intervening to reform ‘the system’. For a theological reflection, there is precious little on the battle in the human heart behind our tendency to idolatry – and what can be done about that – which is where a deeper reflection on the Scriptures might have taken him.

Reviews of bad restaurants can be fun to read and I suspect they are quite fun to write (which then compensates, somewhat, for the critic’s experience of the meal itself). Every failed dish or example of poor service is described and unpicked with a darkly humorous glee and relish. One could probably do the same with the claims and arguments of An Idol Unmasked, picking over them one by one. But the practical purpose of a bad restaurant review is to advise readers to find a meal elsewhere. Likewise with this book. Anyone in search of a balanced and insightful analysis of contemporary monetary systems and markets, coupled with some deep theological reflection, is not going to find it here.


 “An Idol Unmasked: A Faith Perspective on Money” was published in 2014 by Darton, Longman and Todd Ltd (ISBN 978-0-232-53111-4), 140pp.

Revd Dr Ben Cooper is Minister for Training at Christ Church Fulwood in Sheffield. He holds doctoral degrees in both Theology and Economics. Before training for ordained ministry, he was a post-doctoral research fellow in economic theory at Nuffield College, Oxford. He is married to Catherine and has three children.




Andy Hartropp: “And the Weak Suffer What They Must?” by Yanis Varoufakis


In this book, Yanis Varoufakis (Professor of Economics at the University of Athens) gives a highly informative and very well-informed account of the austerity measures enforced by the institutions of the European Union (EU) since the financial crisis which began in 2007-2008.  He also sets these events and policies in the wider context and history of the EU, and especially of the economic relationship between the EU and the USA.  As the title shows, Professor Varoufakis is deeply concerned about the impact of these policy measures on the people who are weakest in a society: most plainly, the weak in Greece (his own country), but also in other EU countries.  This is a concern which Christians must of course share, given the many biblical injunctions to uphold the cause of the poor and needy.

Varoufakis’ account is especially well-informed because of his (short-lived) role as Greece’s Finance Minister between January and July 2015: he was directly involved in many lengthy meetings between the Greek government and the major EU bodies.  These negotiations were focused on the debt crisis which hit the Eurozone in 2010 (a direct consequence of the 2007-8 crisis in London and Wall Street), and in which the desperate finances of the Greek banks were a central part.  Prof Varoufakis was already well underway with writing this book when he chose to stand for election in Greece – motivated by precisely the concerns and arguments about which he was already writing.

More than half of the book is taken up with an account of the economic relationship between the USA and the EU and its predecessors: the European Coal and Steel Community, which evolved into the European Economic Community [Common Market].  The key aspects here centre on macroeconomic policy and the nature of global capitalism: and these are, as Varoufakis shows, central to the contemporary challenges for policymakers, for capitalism and indeed for democracy.

This material (chapters 1 to 5) often takes a fair amount of wading through (although it is thoroughly researched).  But the case he presents is a strong one.  In his own words (pp137-8): ‘The reason Europe seemed to be prospering in the late 1990s and until 2008, despite having introduced an unsustainable gold standard [i.e. permanent monetary union in the form of the Euro], had little if anything to do with the design of its single currency and everything to do with the fact that there was no need for political surplus recycling [emphasis added], as the world of private finance was doing plenty of fair-weather recycling’.  What Varoufakis means here by ‘recycling’ is nothing to do households with putting plastics and paper into bins of various colours (!).  Instead he is talking about macroeconomic and monetary flows between and within countries.  In essence, during the 1950s and 1960s, the ‘Bretton Woods’ economic institutions helped to ensure that no developed economy slumped into permanent recession or depression; and, even after the collapse of those arrangements in 1971, the large and growing ‘twin deficits’ of the USA (i.e. both a Balance of Payments current account deficit, with imports exceeding exports, and a public sector deficit, with government expenditure exceeding tax receipts) helped to enable economic growth to continue in the EU and the Eurozone.  There was no need for the countervailing current account surplus in countries such as Germany to be recycled by the hand of politicians, since the macroeconomic ‘weather’ continued to be fair – until 2008.  However, the 2007-8 crisis brought all of this crashing down; and the poor design of the Euro, Varoufakis argues, meant that the Eurozone countries had no defence against the ensuing crisis.

Varoufakis also makes a strong argument for what is many ways is a very depressing proposition.  The argument is that – in the light of the above history – the EU’s political, economic and monetary institutions do not have it in their DNA to provide a suitably flexible response to a crisis such as that of 2007-8 and its aftermath.  In essence the EU’s structures centralize power (e.g. in the hands of ‘bureaucrats’) and are incapable of being made democratically accountable.

On that basis, in the remaining chapters Varoufakis proceeds to explain the interconnections between the post-2008 debts of private (commercial) banks, the perceived need to bail out these banks, and the EU’s requirement that governments must introduce austerity measures as the price for the EU agreeing to complex packages to try to resolve the severe difficulties.   Crucially, argues Varoufakis, the ‘no bailouts of EU countries’ rule was at the heart of why the follies of bankers led to the price being paid by the weakest citizens (in the form of austerity measures), most especially in Greece.  ‘A clueless political elite, in denial of the nature and history of a crisis whose roots go back to at least 1971, is pursuing policies akin to carpet-bombing the economies of proud European nations in order to save them’ (p192).

Varoufakis makes no secret of his left-wing convictions, and his atheism is also evident.  He writes with passion and intelligence about some very serious challenges facing European and global capitalism, and the book is well worth reading.

Let me conclude with some questions that are raised by this book, especially from a Christian perspective.  First, are we sufficiently concerned for how macroeconomic and political forces impact on the weakest in our societies?  The title of the book, as Varoufakis explains on p19, is drawn from Thucydides’ Peloponnesian War: at one point the powerful Athenian generals explained to the helpless Melians that ‘the strong actually do what they can and the weak suffer what they must’ [translation by Varoufakis].  Substitute ‘politicians and bankers’ in place of ‘the strong’, and it is hard not to find this very chilling.

Secondly, what is the future for the EU?  This is evidently a question not only for the UK (whatever one’s views about Brexit).  Varoufakis is an internationalist, and sees nationalism as a great problem; yet he is deeply pessimistic about the EU.

Thirdly, how can global capitalism be better managed, so that the power of money and finance (we might even say ‘Mammon’) is circumscribed and a more truly democratic political economy is shaped?


“And the Weak Suffer What They Must? Europe, Austerity and the Threat to Global Stability” was published in 2016 by Nation Books (ISBN – 10: 1568585047), 368pp.


Revd Dr Andy Hartropp is an economist, theologian and church minister.  He has two PhDs, one in Economics and one in Christian Ethics.  He lectured in financial economics for 5 years at Brunel University, west London.  He also worked for a year with the Jubilee Centre in Cambridge, primarily leading a team doing research on families in debt.  He trained at Oak Hill College, London, for ordained ministry in the Church of England.  His (second) PhD was published as: What is Economic Justice?  Biblical and secular perspectives contrasted (Carlisle: Paternoster, 2007).  He has spent 13 years in parish ministry.  He worked for eight years with the Oxford Centre for Mission Studies, where he was the Sundo Kim Research Tutor in Mission and Economics.  In March 2016 he joined Waverley Abbey College as Director of Higher Education.  He chairs the Ethics and Social Theology Group of the Tyndale Fellowship.  He is married to Claire, and they live in Bicester, near Oxford.



Andrei Rogobete: “The Wealth and Poverty of Nations” by David Landes


American essayist and novelist William Styron once said that “A great book should leave you with many experiences, and slightly exhausted at the end.” If we judge the late David Landes’ ‘Wealth and Poverty of Nations’ by this criterion, it most certainly fits the bill of a ‘great book’. It is a majestic display of his deep insight and vast knowledge of global economic history. It comes as no surprise, therefore, that the book has been all but universally acclaimed by literary critics.

David Landes was Professor of History and Emeritus Professor of Economics at Harvard University.  His other works include Bankers and Pashas, Revolution in Time, The Unbound Prometheus and Dynasties. As one might expect, therefore, ‘Wealth and Poverty of Nations’ is no short and easy read: half a millennia of global economic history are covered in over 600 pages and 29 chapters.

Landes’ primary aim in the book is to better understand how nations have evolved to reach their current state. Landes’ main thesis of the book is that cultural traits and cultural values play a key role in determining whether a country fails or succeeds economically. As he points out in the Preface, the analysis is not one of a “multicultural, anthropological sense of intrinsic parity: all peoples are equal and the historian tries to attend to them all. Rather, [to]…understand how we have come to where we are, …[through] making, getting, and spending” (page xi).

In this sense, ‘The Wealth and Poverty of Nations’ provides a fascinating and distinctive historical angle that considers the cultural circumstances, as well as the economic trends of the time – thus, viewing economic history through a cultural lens.

Landes opens up the discussion with the premise that the old dichotomy of the West vs. the East, or better said, West vs. the ‘Rest’ has largely dissolved (page xx). The more pertinent split in today’s ‘globalised’ world is between ‘Rich’ vs ‘Poor’ countries. The common thread of questioning that is present throughout the entirety of the book is this: why have some countries come to be so poor and some so rich?

In the opening chapters Landes presses the idea that the technological and cultural advancements enabled the (relatively small) nations of western Europe to significantly punch above their weight (page 137). The Industrial Revolution in Europe brought technological innovations that had tremendous long-term impact on economic development. Basic advancements cotton manufacturing for instance, enabled the creation ‘washable’ clothes. This in turn led to better personal hygiene and therefore, better health and an increase in life expectancy. The technological advancements improved all areas of life in the Continent

Landes also points out that throughout the late 17th Century and 18th Century, England’s relative open society enabled it to flourish at a faster pace than its European counterparts, many of whom were deeply embattled with religious persecution (page 223). As a result, England managed to ‘profit from other nation’s self-inflicted wounds’ (ibid).

Yet arguably one of the most powerful and convincing arguments of the book is raised in Chapter 12 (page 175 – 181). Here David Landes reinstates Max Weber’s thesis on the Protestant work ethic. The core argument here is that the Protestant revolution in Europe brought with in a change in the role and responsibility of work. The influence of Protestant thinking encouraged people to value, creativity, hard work, timeliness, and free-thinking. This in turn acted as a catalyst for economic growth not only in Europe, but also in the early development of America (CEME’s Director, Richard Turnbull, wrote on the impact of Quakers in Quaker Capitalsim: Lessons for Today)

The latter half of the book bring the discussion back to the impact of culture on economic performance and how the two are intrinsically linked. In Thailand for example, young men are encouraged to spend a few years in religious (Buddhist) monasteries before entering the world of work. Landes argues that this sets their priorities right – and makes them more effective once the do enter the ‘materialistic’ world of work, where money plays a major role (page 517).

Landes concludes the book with a discussion on the current tensions between globalisation and the nation-state, but also the merits of free-trade and some of the benefits and dangers of international aid (Page 519-521). In a nutshell (and without giving too much away), the book argues that free trade between nations is disproportionately beneficial and foreign aid can do as much damage as it does good. Landes overarching conclusion is that the adoption of a free market economy (especially by poor countries) is the surest and safest way to long-term economic development and wealth creation.

‘The Wealth and Poverty of Nations’ leaves its reader with a completely new, and unique understanding of the role that culture plays in the historic economic development of countries. Finding criticism for this book is a challenge in itself, I have found myself nit-picking at best. One possible observation is that, even in 600+ pages, it remains difficult to comprehensively capture half a millennia of world history.

Some may say that it is too Eurocentric. Yet the book’s apparent Eurocentrism is part of the presentation and hypothesis that is put fourth – it is the angle that the author adopts rather than an inherit bias. In response to this perceived ‘Eurocentrism’ and being a ‘Westerner’, Landes himself acknowledges that, “I feel surer of my ground” (page xxi). Nonetheless, one could argue that the cultural intricacies of each geographical region can, and deserve to be explored in greater depth.

‘The Wealth and Poverty of Nations’ has become a staple in the field of economic history.

A definite read.


“The Wealth and Poverty of Nations” was published in 1999 by Abacus, ISBN-10: 0349111669, 672pp.

Andrei RogobeteAndrei Rogobete is a Research Fellow with the Centre for Enterprise, Markets & Ethics. For more information about Andrei please click here.

Andrei Rogobete: “Saving Capitalism: For the Many, not the Few” by Robert Reich


Saving Capitalism – For the Many not the Few is the latest addition to Robert Reich’s cohort of publications. He is perhaps best known for his previous work, The Work of Nations (1992) which raised the issue of growing inequality to the public sphere. Alongside his writing, Robert Reich is also a Professor at the University of California, Berkeley, and has served in various positions under the administrations of Gerald Ford and Jimmy Carter. Most notably, he was US Secretary of Labour under the Presidency of Bill Clinton between 1993 – 1997.

At the age of 71, Reich brings a lifetime of experience in both academia and politics to the table. As a true social-democrat, Reich’s Saving Capitalism is a continuation of the themes he discusses in previous publications – some of which include: rising inequality, the not so ‘free’ marketplace, the over-concentration of political and economic power in the hands of a few, the disenchantment of the masses, and others.

As the title may suggest, Saving Capitalism is a critique of the free market structures and modern-day capitalism. Reich argues that decision-making power is increasingly concentrated in the hands of a few, at the expense of the ‘many’. The very rich get richer and more powerful, while the middle and lower classes get weaker and poorer. The entire system is rigged against the majority in favour of a concentrated few. The solution to this injustice, Reich suggests, is an “…activist government that raises taxes on the wealthy, invests the proceeds in excellent schools and other means people need to get ahead, and redistributes wealth to the needy” (page xvii).

Does this narrative sound familiar? To many it certainly will. Robert Reich’s Saving Capitalism is therefore one among numerous publications that champion the social inequality-class warfare thesis. In that sense, the book brings little to nothing new to the debate. Nonetheless, it is well-written and its use of colloquial language grapples the reader. This does however make the book read like more of a socio-political novel rather than a macroeconomic or political account. One cannot help but feel that Reich’s desire to push his own personal narrative has come at the expense of rigorous analysis.

But before jumping to any conclusions, let’s briefly touch upon the structure and content.

Saving Capitalism is comprised of three main parts. The first chapter, entitled “The Free Market” aims to show how in fact ‘free markets’, are not ‘free’ (page 85).

As you may have already guessed, Reich argues that this is due to them being controlled by a select, powerful few that both establish and control rules in which a ‘free market’ operates. He argues that there are five ‘building blocks’ of a free market: property, monopoly, contracts, bankruptcy and enforcement. Each of these require human governance and can be used to either, promote a fair and decent society or can be manipulated to benefit a select few (page 9). This first part of the book argues that the latter has occurred. The stronghold on patent laws by pharmaceutical companies, the large lobby budgets of corporations to maintain dominant market positions, the abuse of bankruptcy laws, are all cited as evidence that the entire system is rigged in favour of on elite few.

The second part of the book is dedicated to showcasing the consequences of such a rigged system. Here Reich argues that free market meritocracy is in fact, a myth. Those at the top increase their own wages whilst those at the middle and bottom see their wages stagnant and in many cases, decline (pages 134-167).

In the third and final chapter, Reich argues for a restoration of countervailing power, or in layman’s terms, bringing power back to the people. The means by which he believes this can be achieved are certainly not new: an increase in the minimum wage, amending labour laws to favour unions, and changing contract laws as to encourage employees and workers to take action against unjust employers (pages 153 – 217).

So while Robert Reich’s latest work presents a compelling critique of the challenges facing 21st century capitalism, it brings little new to the table. Moreover, any truly impartial reader that has some basic understanding of economics would be quick to observe that Saving Capitalism is unabashedly lopsided. There is no doubt that western capitalism is at a crossroads, and the aftermath of the financial crisis has left millions feeling disenfranchised. However, Robert Reich portrays injustices within the free market (as real as they may be), as characteristic of the entire economy. It’s a bit like saying, we can’t play football anymore because one of the players faked an injury.

He also seems to portray an over-the-top form of class warfare: the elite vs. the rest. As if the classes are statutory and unitary groups with no movement or change between. The rich and powerful only stay rich and powerful while the rest suffer the consequences of their actions. We know this is simply not the case – a free market economy does indeed reward creativity and work. Whether, intentional or unintentional, Reich left out any deeper economic discussions, such as aggregate supply/demand and its impact on market meritocracy. This brings us to what is perhaps the most significant pitfall of the book, it is far to rooted in empirical storytelling rather than political or economic analysis. No matter how broad Robert Reich’s experience may be, personal examples should always be an addition to the argument and not its foundation.

Having said that, Saving Capitalism offers some captivating thoughts on the current state of free market. Provided that its rather superficial and politicised arguments are viewed through a critical lens, the book is certainly a worthwhile read.


 “Saving Capitalism: For the Many, not the Few” was published in 2016 by Icon Books Ltd. (ISBN: 9781-78578-0677). 279pp.

Andrei RogobeteAndrei Rogobete is a Research Fellow with the Centre for Enterprise, Markets & Ethics. For more information about Andrei please click here.

Richard Godden: For the Least of These by Anne Bradley & Art Lindsley


For the Least of These comprises a collection of short essays. Its purpose is clearly articulated by Arthur Brooks in the first paragraph of the Foreword: “The Christian Gospels make it abundantly clear that Jesus called on us to care for the poor. What is not at all clear, however, is the best means by which Christians living in a modern, industrial society … can and should carry out the Lord’s directive. This volume takes on the challenge of beginning to answer that question” (page 7).

The book seeks to fulfil its task through twelve chapters grouped under three headings: “A Biblical Perspective on the Poor”; “Markets and the Poor”; and “Poverty Alleviation in Practice”. As might be anticipated by those aware that its editors are Vice-Presidents of the Institute for Faith, Work & Economics, its basic thesis is that a free market economy is the best foundation for the alleviation of poverty. The authors are careful to avoid suggesting that the market automatically provides the solution or that the market is in some way an end in itself but they see it as having inherent potential. As Robert Sirico puts it in his chapter, “The price system in a free economy does not provide a moral foundation for a society. It does not remove opportunities for ill-gotten gain. What it does do is beat every form of socialism at generating moral socially beneficent options for escaping poverty” (page 179).

Negatively, the authors take issue with what Jay Richards (in the Conclusion) calls the “untutored intuition” that “if there are some rich people and some poor people, we can cure poverty by taking some of the wealth of the rich and giving it to the poor” (page 247). It is suggested that both government action (e.g. foreign aid) and some charitable activity (e.g. some gifts by churches to support people in the third world) is misconceived, if well meaning.

Positively, the promotion of trade and enterprise is advocated as the best long-term solution to poverty. For example, Brian Griffiths and Dato Kim Tan suggest that “Intentionally building a new factory close to a slum, creating jobs, and contributing to the local economy through its monthly wage bill, is far more effective in tackling poverty than all the CSR activities that companies can ever do” (page 145).

Most of the book is relatively high level. There are some interesting specific proposals for change. For example, Griffiths and Tan suggest that it is illogical to allow tax deductions for donations to charity but not to apply the same tax incentives to impact investing that builds social enterprises among the poor (page 151). However, proposals of this kind are few and far between. This is a pity since the inclusion of some more would have improved the book. In particular, the book’s suggestion that a lot of government action has produced drug like dependency cries out for proposals as to how the patient should undergo detoxification without dying in the process! On the other hand, the authors might legitimately respond that it is necessary to win the conceptual battle at the macro level before moving to the detail and that this is a small book devoted to that conceptual battle. Furthermore, by its very nature, a market based approach is likely to involve a multitude of approaches informed by general principles rather than large over-arching policies centrally implemented. That, indeed, is one of its advantages.

Of course, the essay format has some drawbacks. In particular, as might be expected in a book with fourteen different contributors, the arguments are not developed in a linear manner, the chapters overlap and not all of the arguments are consistent with one another (e.g. there are differences of view as to how bleak or otherwise the outlook for global poverty really is and different levels of optimism are expressed regarding micro-finance initiatives). In addition, some of the authors have tried to cram too much into their chapters, with the result that they are longer on assertion than argument and adopt language which, at least to UK ears, is unduly polemical (e.g. Jay Richards won’t win many friends by suggesting that Lyndon Johnson’s “War on Poverty” could just as well be called the “War on the Poor”, page 250).

Most readers will want to take issue with at least some of the arguments that are advanced, although they may not agree which arguments should be challenged! For example, David Kotter’s distinction between “wealth” and “riches” (page 60) and Robert Sirico’s suggestion that something is disordered “when it is imbalanced and disregards reason as well as the mandate of scripture” (page 176) are contentious interpretations of the bible. More generally, with the exception of Brian Griffiths, Dato Kim Tan and Richard Turnbull, all of the authors are based in the USA and the book has a clear US perspective. Indeed, some of the chapters relate almost entirely to the US experience (e.g. Anne Bradley’s chapter on Income & Equality). This US experience is important and interesting. There is much to learn from it. However, it would be good to consider other perspectives.

That said, each author contributes something worth thinking about and some of the contributions are very good: the chapters examining historic attitudes and actions in the UK and the USA (by Richard Turnbull and Mark Isaac, respectively) are particularly interesting since they allow the past to challenge contemporary attitudes; Art Lindsley’s short chapter on wealth redistribution comprises a concise demolition of superficial interpretations of the Old Testament Jubilee laws and of the practices of the New Testament Church; and Marvin Olasky’s chapter on the US welfare system, although in some respects perhaps over journalistic, raises a number of issues that deserve careful consideration.

For the Least of These is not a book for those looking for careful engagement with academic debates. Those looking for a systematic explanation of the potential of the free market to alleviate poverty should also look elsewhere. However, it is well worth reading. Few readers will come away without being challenged in some respect and the range of subjects covered should be a spur to further reading and thought.


“For the Least of These” was published in 2014 by Zondervan (ISBN – 10: 0310522994). 252 pages (excluding notes and glossary).

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.

Ben Cooper: Crumbling Foundations – A Biblical Critique of Modern Money, by Guy Brandon

Crumbling Foundations is a stimulating and largely informative introduction to money and monetary systems. It includes a brief account of the history of money, an analysis some of the issues and problems of contemporary monetary systems, and some thoughts about how money might develop and diversify in the future. It also claims to be a biblical critique of modern money. The bulb on the back of the booklet says it brings biblical principles to bear ‘on a monetary system [that] is fundamentally unjust and unstable’.

The descriptive elements of the booklet are mostly good, much as one might find in a chapter on money in an introductory book on economics — with only a few places where an economist might want further clarification. Moreover, as a critique, this booklet has some important things to say. It’s very helpful to understand what money is, how it works, how it’s ‘made’ — and how it can be manipulated by the parties involved. It’s important to understand the vulnerabilities of different monetary systems, not least our own, and the different possibilities for monetary reform or innovation. That said, this booklet presents an almost entirely gloomy picture of the role of money in recent economic history. I would have liked more on the positive side — the contribution of banking and money to innovation, growth and the reduction of poverty, for example.

I was less persuaded by the many claims in the booklet to be a biblical analysis. There are two main ways the biblical material is brought to bear on the contemporary issue of money. The first relates to the biblical material concerning lending at interest. The claim is that the Bible presents lending at interest as ‘a form of injustice and oppression’ (page 25). This places the biblical approach at odds with modern monetary systems in which ‘debt and interest are inherent’ (page 19) and where most money is ‘created hand-in-hand with debt’ (page 41) — suggesting the need to develop systems of ‘positive money,’ created without debt (pages 41–42). But the biblical material on lending at interest is almost entirely concerned with situations of borrowing as an emergency measure to survive a period of extreme poverty. The biblical case laws regulate lending in this case, so that lenders do not profit from the misfortune of their neighbours, and so that borrowers have every opportunity to escape their poverty. To extrapolate from these cases to issues of debt and lending in general is quite unwarranted. Indeed, from Deuteronomy 23:20 it’s clear that lending at interest in some cases absolutely fine — ‘you may charge a foreigner interest’. This exception to the ban on charging interest in the rest of these verses does get a mention (page 20), but is skipped over with such unsatisfactory brevity that it renders this part of the booklet wholly unpersuasive.

The second way the biblical data is applied in the booklet relates to the wariness we find in the biblical account to centralised authority (page 12). Biblical teaching is concerned with ‘limiting [the] concentration of power’ (page 44). We can agree this is a biblical principle — although it’s perhaps more implicit than explicit, and certainly not spelled out in any great detail. But how much traction it gives us when we apply it to questions of money and the design of monetary systems is doubtful. After all, monetary systems are already to some extent decentralised. Individual nations tend to have their own currency, and individual governments frequently discover they have far less control over the money supply than they would like. How much centralisation is too much centralisation? It seems to me the Scriptures don’t give us any explicit guidance here. We have to come to a conclusion some other way.

Guy Brandon doesn’t fall into the trap of taking biblical descriptions of money and monetary practice and turning them into contemporary prescriptions. That would be a mistake, and he recognises this very clearly (page 34). (Just imagine doing something similar with the biblical descriptions of agricultural practice in the ancient world and building a ‘biblical critique’ of modern mechanised farming techniques.) Nonetheless, he does get pretty close to this mistake, especially in the concluding comments (pages 44–45). And he does overstate what the Bible has to say explicitly and directly on the ethics of money and monetary systems. It may well be in the end that money is one of many issues on which the Scriptures do not speak directly. As creative beings made in the image of God we are expected to work it out for ourselves — within broad parameters, summarized as loving God and loving neighbour. An exercise in biblical wisdom, then. To which at least some parts of this booklet make a useful — if rather one-sided — contribution.


 “Crumbling Foundations: A Biblical Critique of Modern Money” was published in 2016 by The Jubliee Centre, Cambridge, 56pp.

Revd Dr Ben Cooper is Minister for Training at Christ Church Fulwood in Sheffield. He holds doctoral degrees in both Theology and Economics. Before training for ordained ministry, he was a post-doctoral research fellow in economic theory at Nuffield College, Oxford. He is married to Catherine and has three children.



Edward Carter: “How Will Capitalism End?” by Wolfgang Streeck


This book is a collection of previously published articles and one unpublished conference paper, with a new 46 page long introduction. It is therefore not a book that develops an argument skillfully and steadily, rather it hammers away at certain themes, sometimes repetitively. Streeck acknowledges this in his Note on the Text, where he admits to an ‘occasional overlap between chapters’ (p. ix). Having read through them all I did feel that at times this repetitiveness was unfortunate, although there is undoubted value in having the various articles gathered in one place.

The organizing theme taken by Streeck is that capitalism is collapsing because of certain internal contradictions. What is more, the author believes that we are living in a period of ‘deep indeterminacy’ (p. 12) in which it is difficult to predict what will happen, and that there is nothing obvious to replace our contemporary capitalist system. Other than at two brief moments, the prophetic message given is one of doom and gloom throughout the entire book, with no real sense of hopeful possibilities. In an emotional sense, and perhaps also because of its repetitive nature, I therefore found that reading this book left me dispirited, but also with a sense that the analysis might be incomplete or flawed.

One of the recurring strands running through the book is that of the relationship between economics and sociology. This is addressed through the lenses of economic history, the nature of money and debt, the difficult relationship between capitalism and democracy, commodification and inequality, and a consideration of the class structures within society (Marx certainly gets several mentions). This is summarized admirably concisely and clearly in the final paragraph of Chapter One, which bears the same title as the book itself, and which started life as a lecture given at the British Academy on 23rd January 2014.

At heart, although he never exactly states it in this way, Streeck presents a vision of capitalism as an epoch within history, whose time was always going to be limited, rather than accepting a view of history that must fit within a capitalistic meta-narrative. In order to sustain this argument, the author needs to describe capitalism in a certain, rather dysfunctional, way. So for example, Streeck sees innovation as something that ‘attacks and destroys in particular firms and markets that operate to everybody’s satisfaction.’ (p. 39) I was not convinced by this. It seemed to me that the author’s structuralist view of society had left little space for human creativity, and left him unable to see individuality as anything except a problem. However, prompted by Streeck’s analysis I did find myself asking about the nature of a wholesome vision of collective life within which individuals can flourish, and what kind of ‘progress’ this would mean.

The two moments, hinted at above, when Streeck himself ventures into the territory of suggestions or answers to these questions come at the end of Chapters Eight and Nine. Chapter Eight considers the troubled relationship between democracy and capitalism, taking the work of Wolfgang Merkel as a foil, but I was heartened to discover the suggestion of ‘de-globalizing capitalism’ (p. 198) and the idea that ‘restoring embedded democracy means re-embedding capitalism’ (p. 199) (italics in the original). For me, this idea offers the genesis of a new piece of work, different in tone to the current collection, and I would encourage Streeck to reflect on how this could be developed. Rather different, but equally important, is the moment at the end of Chapter Nine when Streeck feels for ‘…a non-capitalist politics capable of defining and enforcing general interests in the sustainability of human society’ (p. 225). I took this to be a call for the complex relationship between politics and economics to be re-imagined.

This brings me to another problem that I had with this book; it has in a sense been overtaken by the events of the Brexit referendum and the election of Donald Trump. The relationship between politics and economics is being re-drawn before our eyes, the old assumptions are unraveling, and faltering attempts at what could be called a ‘non-capitalist politics’ are emerging. I feel sure Streeck must now be writing something new, and I would encourage him to do so. From a Christian perspective, deep questions of identity connected to the individual and to society are very resonant with theological reflections on the nature of life itself, and the way in which societies and economies are arranged. I was therefore pleased to have been stimulated in my own thinking as I read this book. I look forward to a more cohesive, less repetitive, and post-Brexit sequel.

The book is nicely presented with a good index. The author is the Director of the Max Planck Institute for Social Research in Cologne and Professor of Sociology at the University of Cologne.


How Will Capitalism End? Essays on a Failing System – by Wolfgang Streeck, 2016, ISBN 13: 978-1-78478-401-0

Edward Carter is Vicar of St Peter Mancroft Church in Norwich, having previously been the Canon Theologian at Chelmsford Cathedral, a parish priest in Oxfordshire, a Minor Canon at St George’s Windsor and a curate in Norwich. Prior to ordination he worked for small companies and ran his own business.

He chairs the Church Investors Group, an ecumenical body that represents over £10bn of church money, and which engages with a wide range of publicly listed companies on ethical issues. His research interests include the theology of enterprise and of competition, and his hobbies include board-games, volleyball and film-making. He is married to Sarah and they have two adult sons.





Richard Godden: “Platform Capitalism” by Nick Srnicek


Those who have studied modern technology based or enabled companies will doubtless consider Platform Capitalism to be superficial. Srnicek does not provide any worked through suggestions that will be useful either to the makers of public policy or to those involved in the management of business and many of his conclusions are contentious and appear to be based more on his prior left-wing accelerationist philosophical position than on the evidence presented in this book.

And yet: the book is interesting and thought provoking. Leaving aside the eccentric use (or, rather, minimal use) of paragraphing, Srnicek has an engaging style and presents a readable and helpful overview of the impact of technology on economic activity and of the strategy of technology companies. The book is short (l29 small pages) and can easily be read carefully in a couple of evenings. It is worth devoting this time to it.

Srnicek’s subject is the effect of digital technology on capitalism. He claims that “the platform” has emerged as a new business model and his aim is “to set these platforms in the context of a larger economic history, understand them as a means to generate profit, and outline some tendencies they produce as a result” (page 6). After a reasonably orthodox (if very obviously left-wing) review of economic and business trends since the 1970’s (primarily focussed on the USA and UK), he moves on to consider the emergence of “platforms”, which he defines as “digital infrastructures that enable two or more groups to interact” (page 43). He distinguishes five types of these: advertising platforms (e.g. the Google search engine), which allow their owners to extract information on users, undertake analysis, and use the product of this to sell advertising space; cloud platforms (e.g. Amazon Web Services), which comprise hardware and software that is rented out to digital-dependent businesses; industrial platforms (e.g. that of GE), which comprise the hardware and software necessary to transform traditional manufacturing; product platforms (e.g. that of Rolls Royce), which transform a traditional good into a service; and lean platforms (e.g. that of Uber), which are like product platforms but whose owners attempt to reduce their ownership of assets to a minimum.

The analysis of each of these business models is much the most interesting part of Platform Capitalism. Srnicek concludes, perhaps surprisingly, that lean platforms “seem likely to fall apart in coming years” (page 88) but he recognises that the other types of platform are here to stay. He sees some benefits in this (e.g. better products for customers) but his main focus is on the concerns to which the emergence of platforms gives rise.

His biggest concern is the perceived monopolistic tendency of platform capitalism. He returns to this on a number of occasions and asks “Will competition survive in the digital era, or are we headed for a new monopoly capitalism?” (page 94). This is certainly a question that needs to be addressed but, Srnicek’s analysis points to various factors that suggest that there will continue to be significant competition among the platform providers. Nonetheless, his prognosis is bleak. “Let us be clear,” he says, “this is ….. the concentration of ownership” and, he continues, “Far from being mere owners of information, these companies are becoming owners of the infrastructures of society” (page 92). This is surely unduly apocalyptic.

Srnicek’s other major concern relates to labour. It is here that his left-wing philosophy is most apparent. He points to some real concerns (e.g. the mis-labelling of employees as independent contractors with a view to avoiding employment protections) and he dismisses the absurd idea that user-created data comprises the exploiting of free labour. However, he makes many statements that rely on assumptions that are at best dubious. For example, his suggestion that “In a healthy economy [people such as Uber drivers] would have no need to be micro-tasking, as they would have proper jobs” (page 82) seems to be based on the assumption that the job market of, perhaps, 50 to 70 years ago is the only acceptable model and smacks of left-wing nostalgia for the days of manufacturing-based factory capitalism. Likewise, his suggestion that companies such as Airbnb have “off-loaded costs from their balance sheet and shifted them to their workers” (page 83) suggests preference for the rigidities of integrated corporate monoliths over the more flexible models permitted by modern technology.

The book also suffers in some places from loose use of terminology. For example, Srnicek several times mentions (with apparent disapproval) the “cross-subsidisation” that he believes is inherent in some platform business models (e.g. Googles) that involve providing a free service that enables advertising space to be sold. This use of the term is eccentric. Google is no more involved in cross-subsidisation than are the owners of commercial television stations or free local newspapers that have historically survived by selling advertising space. It is hard to see what is wrong with the Google “cross-subsidisation” model from a competitive or any other point of view.

More seriously, Srnicek’s frequent attacks on “tax evasion” are mis-directed. Many people are rightly concerned about tax evasion but he confuses illegal evasion with legitimate tax minimisation. In particular, he seems unaware that, pursuant to express US law, US corporations may legally avoid the payment of US tax on foreign profits for so long as these are not repatriated. He may not like the relevant US legislation but there is logic behind it and, in any event, companies can hardly be criticised for making use of it. His statement that “The leaders of tax evasion have …… been tech companies” (page 59) followed by a list of well-known names, without any supporting evidence, is both disturbing and disappointing.

The final section of the book (relating to what the future may hold) is less disturbing but equally disappointing. One idea is piled on another. In less than two pages, there are suggestions of: co-operative platforms; anti-trust action; regulation of, or even the banning of, lean platforms; co-ordinated action on tax; the creation of “platforms owned and controlled by the people”, which must nonetheless be “independent of the surveillance State apparatus”; “post capitalist platforms” (whatever they might be); and the collectivisation of platforms (pages 127/8). None of these ideas is explored and one may doubt the realism of at least some of them and the practical benefits of others.

This is a pity because there are many issues arising from “platform capitalism” that should be explored by both policy makers and those involved in business. What are the implications for privacy and, indeed, personal freedom and how should we respond to these? What kind of protections for “workers” are practicable and appropriate in a digital world? Where do the responsibilities of the platform companies to employees, customers, suppliers and others begin and end and how can they best discharge them? What kinds of regulatory regimes (if any) are needed for this kind of company and how can they be imposed in a digital, cross-border world? Generally, what does responsible digital business look like?

Srnicek fails to offer any insights into these matters. None-the-less, his analysis of the platform companies is important because it should help others to do so. It should also help all of us to note the way in which the business world is moving and avoid suggesting outdated solutions to modern business problems.


“Platform Capitalism” was first published in 2017 by Polity Press (ISBN 1509504869, 9781509504862), 120pp.

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.

Ben Cooper: “The Spirit of Democratic Capitalism” by Michael Novak

Revd Dr Ben Cooper is Minister for Training at Christ Church Fulwood in Sheffield. He holds doctoral degrees in both Theology and Economics. Before training for ordained ministry, he was a post-doctoral research fellow in economic theory at Nuffield College, Oxford. He is married to Catherine and has three children.

Martin Novak is an American Catholic author, philosopher, and theologian. Born in 1933, he tells of how he took seriously Aristotle’s advice that a man cannot write well on ethics until he is at least fifty, and so waited until the late 1970s before starting work on what has become his most influential book, The Spirit of Democratic Capitalism. In the intervening years, he had become increasingly convinced that the actual practice of what he calls “democratic capitalism” is more consistent with the high ideals of Judaism and Christianity than the practice of any other system. This was a radical conclusion to reach. As he notes (page 242), it was generally assumed at the time that prominent thinkers like Paul Tillich were right to say, “Any serious Christian must be a socialist”. The term “capitalism” was used in many Christian circles, as it was by many in the academy, with contempt.

The Spirit of Democratic Capitalism was published in 1982 — just before Novak’s fiftieth year, as it happens, but it is nonetheless ethical writing on political economy of the highest quality. The book is divided into three parts, beginning with an enquiry into “the ideal of democratic capitalism”. The term “democratic capitalism” was not in wide usage at the time, and Novak appropriates it to describe a three-fold dynamic system: “a democratic polity, an economy based on markets and incentives, and a moral-cultural system which is pluralistic and, in the largest sense, liberal” (page 14). Novak challenges the negative stereotypes: “The spirit of democratic capitalism is the spirit of development, risk, experiment, adventure” (page 48). It is pluralistic: power and control is dispersed, countering any tendency to tyranny. It is relatively resilient to errors of unintended consequence. It doesn’t make the mistake of thinking economic decisions constitute a zero-sum game. It’s more conducive to community than you might think, especially in relation to the family. All this, Novak contrasts with socialism in the second part of the book, “The twilight of socialism”.  In the light of its practical failures, socialist thinkers have retreated into idealism and claims of moral vision, mostly centred around questions of equality and justice (page 207). Novak critiques these claims both at the level of ideals and, in one of the rare empirical sections of the book, in terms of real outcomes. In the final section, he then attempts “A theology of economics”, critiquing a number of approaches before outlining his own, rather limited, account of the theological doctrines underpinning democratic capitalism.

This is a lengthy book, requiring some perseverance to work through its 460 pages. I found myself on occasion yearning for a more orderly and concise argument. Other times, I felt in need of some more formal analysis or hard evidence. Nonetheless, The Spirit of Democratic Capitalism is essential reading for anyone interested in the ethics of political economy. The basic argument is, on the whole, satisfying and persuasive. Socialism claims, in part, that capitalism institutionalizes greed and selfishness (page 92), and positions itself as an antidote. But socialism cannot do away with greed and selfishness. Rather, these negative impulses survive to inflict enormous damage, because the rigidity of a centralised system means there are relatively few checks and balances to constrain them. Under capitalism, the constraints on the damaging social effects of greed and selfishness turn out to be superior, because success typically depends on doing something that will be of benefit to other people (although, as Novak and others have noted, this requires a democratic polity and strong moral cultural foundations to function well). Moreover, capitalism provides a setting within which some of the more positive aspects of human nature, such as creativity and invention, can flourish. In such a setting, many kinds of failure are actually part of the learning process through which innovations develop and improve, and cause economies to grow. Importantly, in none of this does Novak claim perfection for democratic capitalism. It “does not promise to eliminate sin” (page 85). His claim is a relative one: “all other known systems of political economy are worse” (page 28). It’s in democratic capitalism, he goes on to say, that our best chances lie: “Such hope as we have for alleviating poverty and removing oppressive tyranny — perhaps our last, best hope — lies in this much despised system”.

So successful is Novak’s basic argument that the question now is not so much whether one should be “for” democratic capitalism or “against”; rather, the question becomes what kind of democratic capitalism should we favour and promote? Given that “the democratic capitalist revolution is moral, or not at all” (page 439), Christian thinkers should have plenty to contribute on this question. Novak’s own attempt to do so in the final section of the book is perhaps its weakest and most undeveloped part. There is only the faintest glimpse of how democratic capitalism might fit with the wider plans and purposes of God in history across the nations. On such things Novak was very clear even as he wrote that there is much more to say.


 “The Spirit of Democratic Capitalism” was first published in 1982 by Simon & Schuster. This is a review of the revised edition, published in 1991 by Madison Books (ISBN-10: 0819178233), 460pp.

Revd Dr Ben Cooper is Minister for Training at Christ Church Fulwood in Sheffield. He holds doctoral degrees in both Theology and Economics. Before training for ordained ministry, he was a post-doctoral research fellow in economic theory at Nuffield College, Oxford. He is married to Catherine and has three children.



Richard Turnbull: “Good News for the Poor” by Theodore W. Jennings


John Wesley’s influence in the history of Christianity is indisputable. His movement for ‘scriptural holiness,’ his foundation of Methodism as both movement and denomination, his organisational prowess, his spiritual passion for the established church, all form part of his legacy. His Journals, letters and sermons are a goldmine of information and insight. Naturally this wealth of primary resources has also generated a history of interpretation. The fire in his parents’ Rectory at Epworth (‘a brand plucked from the flames’) came to form part of the providential history of Methodism, as indeed did his ‘conversion’ experience at a meeting of the Moravians in Aldersgate Street in London in May 1738. Wesley also was a political conservative, a supporter of the monarch, willing to pray against the French and resistant to the rebellion of the north American colonies.

So, a quest for Wesley’s economic and social ethic is an attractive possibility. Surely if there is an ‘evangelical economics,’ we will find Wesley an able exponent? The enormous strength of this book is that it gathers into one place Wesley’s writings and teachings on economic and social matters. The weakness lies in the interpretation in which we learn more about the author than we do the subject.

Professor Theodore Jennings is currently an affiliated Faculty member of Chicago Theological Seminary as Professor of Biblical and Constructive Theology. He has been a local pastor and also taught at the Methodist Seminary in Mexico City. He clearly stated aim is to re-interpret Wesley through the lens of liberation theology. So his starting point is a ‘demystification of wealth and power’ and a ‘preferential option for the poor’ (pp24-25). By ‘evangelical economics’ the author means ‘the criticism of wealth, the forms of solidarity with the poor, the notion of stewardship, and the vision of an economic practice based on the example of the Pentecostal community’ (p24). Intriguing though these themes are, they hardly form an adequate definition for ‘evangelical economics.’

The book is constructed around these key themes together with chapters on ‘The Theological Basis of Wesley’s Ethic,’ ‘Why did Wesley Fail?’ and ‘The Relevance of Wesley,’ together with an appendix on ‘Wesley on Politics.’ These chapters, forming the second half of the book, are essential to Jennings interpretative exercise – because he has, by his own admission, to deal with Wesley’s well-known conservatism, his swift abandonment of the Pentecostal ideal, Wesley’s own contra-writings to the liberation theology theme and the unwillingness of Methodism to embrace the apparent ideals of their founder.

Jennings powerfully brings out Wesley’s critique of wealth and excess. Wealth was a temptation and increasing riches increase the temptation and conformity to the world. Luxury leads to laziness and contempt for the poor. Jennings here draws upon Wesley’s Journal and his sermons, On Riches, The Danger of Riches, On the Danger of Increasing Riches. Wesley expounds the theme that all our riches and wealth are held on stewardship from God and with a purpose:

Do you not know that God entrusted you with that money (all above what buys necessaries for your families) to feed the hungry, to clothe the naked, to help the stranger, the widow, the fatherless; and, indeed, as far as it will go, to relieve the wants of all mankind (p102, quoting the sermon on ‘The Danger of Increasing Riches’).

Wesley’s most famous treatise on the matter was his well-known sermon on ‘The Use of Money,’ and the famous three-fold injunctions of ‘Earn all you can, save all you can, give all you can.’ Jennings does recognise the complexity of this sermon but we see also his own forced interpretation here by his description of this sermon as ‘the source of most of Wesley’s problems with the Methodists’ (p167). This is wholly inadequate by way of interpretation. Wesley refers to money as ‘an excellent gift of God’ and being of ‘unspeakable service to all civilised nations,’ whilst also arguing for ‘honest industry’ and for the avoidance of sinful trade or the undercutting of competitors. In reality there is little economics (evangelical or otherwise); the feel is very much that of a preacher.

There is also the vexed question of Wesley’s advocacy of the ‘community of goods,’ upon which Jennings places great store but about which two things are clear. First, that Wesley experimented intellectually (and hoped to do so practically) with the idea in the 1740s and, secondly, that he subsequently abandoned it either because he considered it to be unrealistic or because his thought had moved on, perhaps as he preached his sermon on “The Use of Money” (which he delivered on 23 occasions according to the sermon register, starting in 1744, and which was printed in 1760).

Despite his occasional radical thoughts Wesley stood in the mainstream tradition; he accepts the basic role of the market, offers strictures against excess and looks to the voluntary principle as a response to social need. However, for all that, we should not underestimate the power of his critique of wealth and money.

Ultimately, Jennings forces the material to his theme. He makes far too many pejorative interjections in his interpretation for the contemporary age.  That is not to say that there is nothing powerful about gathering together from their disparate sources Wesley’s economic and social thought. However, he does so partially. By separating those writings of Wesley which operate in the opposite direction we are left with two halves of a theological tradition without the necessary interpretation of the complexity. Wesley was not an economist and his writings on economics – claimed indeed by both ‘free-marketers’ and ‘socialists’ (which merely illustrates the complexity) –  simply cannot be garnered into some overarching economic strategy. As a preacher he certainly knew the challenges wealth brought; about business and market itself (the use of the word capitalism would be an anachronism) he was unquestionably equivocal.


“Good News to the Poor: John Wesley’s Evangelical Economics” was first published in 1990 by Abingdon Press (ISBN-10: 0687155282)

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Dr Richard Turnbull is the Director of the Centre for Enterprise, Markets & Ethics (CEME). For more information about Richard please click here.

Edward Carter: “Capital and the Kingdom – Theological Ethics and Economic Order” by Tim Gorringe

I first read this book shortly after it was published in 1994, at a time when I was starting to explore the interface between Christian ethics and economics. Re-reading it some twenty years later has been instructive, now that this field has been developed rather more and is taken seriously again by at least some of those involved in politics and public life.

The book is set out in four parts, preceded by a helpful introduction in which Tim Gorringe sets out his stall by explaining how he uses Karl Marx as a dialogue partner throughout. This gives a hint as to his own political leanings. Indeed, in his introduction he even locates Marx as standing within the tradition of prophecy (p. xi). This means that Gorringe works essentially with a structured view of society and of economics that draws on Marxist theories of power and domination, rather than something more dynamic or entrepreneurial, and this is the undergirding theme of Part One. However, the theme of ‘narrative’ and economic history is certainly also present here, as part of his general critique of a version of economics that is ‘at the mercy of abstract laws which only experts can fathom’ (p. 22).

Within Part One I enjoyed finding at least two sharp criticisms of Brian Griffiths, Chairman of CEME, and having heard Lord Griffiths’ more recent reflections my sense is that he might now yield a little ground to Gorringe when it comes to the place for Christianity within public policy (see p. 13), while holding fast against the Marxist view on equality and liberty (p. 54). In certain respects, the world that Gorringe describes has changed. I particularly noticed this in his discussion of a living wage, which has now been embraced across the political spectrum in the UK.

Part Two of the book has four chapters that address more focused subjects. The first of these, ‘Work, Leisure, and Human Fulfillment’, sets out a valuable survey of Christian thinking through history on this theme, with the conclusion that ‘true leisure is not utilitarian’ (p. 77), and that both work and leisure are about human realisation. As a stand-alone section this would make good reading for anyone wanting a critique of a self-contained neo-classical economic world-view. However, the other three chapters in Part Two resonate more strongly with Gorringe’s Marxist theme, as they tackle the subjects of alienation, solidarity, resistance, and social justice. Gorringe looks for a ‘rejection of the individualism which divides people and sets them against each other, affirmation that humanity consists in working together’ (p. 102). While this is indeed a hopeful broad vision to set forth, as I read these words I found myself wondering whether it takes seriously enough the way in which entrepreneurial energies operate within the economy.

Part Three is given the over-arching heading ‘The Common Treasury’, in which Gorringe explores the subjects of personal property, inequality, planning and ecology. His general approach is one that advocates a socialist ‘control’ of the economy, and at one point he states that ‘some kind of global planning is needed’ (p. 140). Part Four then consists of a single final chapter, entitled ‘Two Ways’, in which Gorringe mounts a strong attack on global capitalism. It was here that I was surprised but pleased to stumble across a reference to the economist Joseph Schumpeter. His work had been used as ammunition within a 1980s debate between the Roman Catholic bishops of the USA and some prominent Catholic lay people. Reading this section carefully, my impression was that Gorringe brackets Schumpeter with a more general neo-classical take on economic theory, and then summarily lambasts them both. However, I would argue that he has missed something here, and that a more careful look at the contrast between Schumpeterian economics and the neo-classical approach would have been fruitful. In fact, Schumpeter has been taken in a Marxist direction, notably by Paul Sweezy, and I wondered if Gorringe might have changed his line if he had been aware of this.

On almost the last page of the book I then found this sentence: ‘There is nothing intrinsically wrong with enterprise, initiative and ownership. What is wrong is when these are harnessed to profit, power, self-aggrandisement, and inequality.’ (p. 166) As a programmatic statement this felt promising to me, but I struggled to see how large parts of the book itself could be taken to support or develop it. Rather, for Gorringe any sense of enterprise or initiative seems essentially to be subsumed within a Marxist superstructure, and the need for human cooperation to be played out in a society marked by planning and control. In the end, therefore, I found this book to be a helpful foil against which I wanted to put forward different ideas connected to human enterprise. However, as a major contribution in the field of theological ethics and economic theory its importance cannot be doubted.


“Capital and the Kingdom: Theological Ethics and Economic Order” was published in 1994 by SPCK/Orbis Books (ISBN 10: 0-281-04773-1)

Edward Carter is Vicar of St Peter Mancroft Church in Norwich, having previously been the Canon Theologian at Chelmsford Cathedral, a parish priest in Oxfordshire, a Minor Canon at St George’s Windsor and a curate in Norwich. Prior to ordination he worked for small companies and ran his own business.

He chairs the Church Investors Group, an ecumenical body that represents over £10bn of church money, and which engages with a wide range of publicly listed companies on ethical issues. His research interests include the theology of enterprise and of competition, and his hobbies include board-games, volleyball and film-making. He is married to Sarah and they have two adult sons.

Richard Godden: “With Liberty & Justice for Whom?” by Craig M Gay


With Liberty & Justice for Whom? is an analysis of the views of conservative Protestants about capitalism. It was written a quarter of a century ago and its focus is on U.S. writers. It is thus dated in parts and, in any event, many outside the U.S.A. will feel that Gay’s analysis is not wholly applicable to their context. Some will also find tiresome its almost obsessive quoting of other scholars, which betrays its origin as a doctoral dissertation. Nonetheless, the issues raised by it are of long-term general significance and, whilst Anglo-Saxon evangelicals are likely to benefit most from reading it, it could be read with profit by other Christians, those of other faiths and, indeed, anyone who wishes to consider the reasons why people who apparently share a common religious or philosophical starting point disagree so vehemently about economic and societal issues.

Gay divides evangelical intellectuals into three groups: the left (which, he suggests, essentially regards capitalism as oppression); the right (which, he suggests, has primarily engaged in the defence of capitalism against the critics of the left); and the centre (comprising those “whose appraisals of capitalism are neither wholly negative nor entirely positive” but who regard capitalism as a “cause for concern”; page 116). He examines the views of many people within each group, considering the essentials of their economic and political views as well as the way in which they use the Bible to support these views.

The first two-thirds of the book is largely descriptive, albeit interwoven with comment and evaluation. Gay then moves on to analysis. He believes that it is “clear that capitalism as such is not the only thing at issue in this debate but that the various evangelical factions are contending for entirely different socio-cultural visions of American society” (page 161). However, he points out that the difference between the competing views “is not a matter of competing moral and ethical paradigms but of disagreement on the question of whether capitalism promotes or prevents the realisation of the norms and values they hold in common” (page 166).

Gay attempts to use the “new class” theory of the Austrian born American sociologist Peter Berger in his analysis. He argues that those on the evangelical left are reflecting their membership of this new class (broadly those engaged in what he calls the “knowledge industry”) whilst those on the right reflect the attitudes and interests of the old middle class (occupied in the production and distribution of goods and services). He suggests that both evangelical groups have engaged in a process of “cognitive bargaining” with the secular world and, in particular, in their analyses, have compromised the more transcendent, or “other worldly”, elements of evangelical faith. He also asserts that “Both the evangelical left and right have succumbed to an ideological abuse of Scripture and a de facto (and occasionally explicit) confession of the ultimacy of economic life” (page 203).

Many of Gay’s assertions and suggestions are contentious. For example, he admits that his use of the new class theory is “provocative, to say the least” (page 203). Furthermore, one may question whether his categorisation of evangelical views (which he admits is arbitrary) is helpful. Is the analysis assisted by lumping Theonomists and Christian Reconstructionists together with Brian Griffiths and Peter Hill? Do those in what Gay terms the “evangelical mainstream” (whose views are moderately right of centre) really have much in common with the views of what he terms “progressive evangelicals” (whose views fit much more comfortably with the left wing analysis)? Gay observes that the “evangelical centre” has no economic programme, which suggests that it is not a real category worth examining. It might have been better had he examined the extreme right, the moderate right and the left (which Gay recognises is a more coherent group than the others).

Gay was doubtless conscious of the danger of being accused of criticising everyone else’s views without offering a view of his own but he wisely avoids entering into the detail of the economic and theological debate. Instead, he offers suggestions as to a way forward in the debate, which are set out in a 33 page “Epilogue”. Unfortunately, this part of the book is disappointing There is little to object to in what he says but the language used, particularly in the first part of the Epilogue, is less clear than might be desired and, overall, his suggestions do not add much to the debate. Furthermore, although he seeks to avoid taking sides, those on the evangelical left are likely to feel that he is in fact laying the foundations of an essentially right of centre viewpoint without fully justifying his position.

These are significant failings but they should not put anyone off reading this book. It provides a wealth of food for thought and challenges: Why is it that evangelical economic debate so closely mirrors the corresponding secular debate, albeit with the addition of Biblical analysis? How much of the evangelical contributions to economic debate derives from the Bible, how much from secular assumptions and how much the compromise with the groups in which the relevant authors move or a reaction against these groups? To what extent are arguments caused by a disagreement as to whether criticism of the existing economic order is to be based on a comparison with an ideal or a comparison with practically available alternatives? Should the debate focus on the detail of capitalist economics or will progress only be made if the underlying assumptions and issues relating to our concept of society are addressed? Specifically, are those debating capitalism and other economic models guilty of a failure to examine whether terms like “liberty” and “justice” are being used by everyone in the same sense?

These questions are well worth considering and, by raising them in the context of a detailed analysis of the spectrum of evangelical opinion, Gay provided and, 25 years on from his book’s original publication, continues to provide an excellent foundation for further thinking.

“With Liberty and Justice for Whom?” was reprinted in 2000 by Regent College Publishing (ISBN 10 1573831328).

Richard Godden is a Lawyer and has been a Partner with Linklaters for over 25 years during which time he has advised on a wide range of transactions and issues in various parts of the world. 

Richard’s experience includes his time as Secretary at the UK Takeover Panel and a secondment to Linklaters’ Hong Kong office. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of the Global Executive Committee.