Business

Saturday July 25, 2009

Knowledge gained on hard work

Review by ABBY WONG


False Economy: A Surprising Economic History of the World
Author: Alan Beattie
Publisher: Penguin Books

I HAVE mixed feelings about this book, False Economy, a Surprising Economic History of the World. Although I did learn a great deal from it, I did not have an easy time reading it.

Written by Alan Beattie, False Economy is a clever book presented interestingly in nine chapters with each addressing an economic issue, and each asking a thought-provoking question in the beginning of each chapter. Not surprisingly, the chapter on corruption takes on the question, “Why did Indonesia prosper under a crooked ruler and Tanzania stay poor under an honest one?”

Unlike most of the economic books that illuminate on economic policies and theories, this book delves deeply into economic history. A former economist for the Bank of England and now a world trade editor of the Financial Times, Beattie uses extraordinary stories to examine the many factors that have helped shape nations and their economies. He also revisits the social and economic history of a number of countries, and recounts a confluence of historic events that got them to where they are now in terms of growth and prosperity.

The book starts off well with a gripping first chapter about making choices. As he interestingly does for every chapter, Beattie uses Argentina and the United States as examples in this chapter to illustrate how choices made by policy-makers determine economic development of their nations.

In this case, Beattie argues that Argentina could have prospered the way the United States had had it not made all the wrong choices at the dawn of the 20th century. And it was the United States that took off and flew because it wisely chose to unite its colonies (states as they are now called), attract immigrants, import farming technology from Europe, open up land ownership, encourage savings and form a flexible democratic government.

Argentina, on the contrary, consistently repeated mistakes due to a bad economic model inherited from an autocratic ruler. By the time Argentina wanted to learn from the United States, the Americans had already leapt into industrialisation, leaving its counterpart behind to flounder economically throughout the century.

Swift and crisp, Beattie is cohesive in presenting his ideas in that chapter. I could not stop reading and was guffawing away at his British humour.

Unfortunately, he begins to drift slightly away from the next chapter onwards, chilling my enthusiasm and boring me at times. But it is not that Beattie’s assessment is unconvincing, nor his material lacking. The fact that he darts from one topic to another across a chapter makes his analysis perplexing to understand and his direction somewhat confusing to follow. Moreover, the plethora of examples that he generously gives and the obsession that he has with details weigh down the flow of the book, making it heavy and trying to read.

To his credit, however, Beattie’s exceptional knowledge in trade and world economics is evident throughout the book. He is consistently compelling in his analysis and is astounding in his accounts of the events that took place as far back as the 12th century.

As I weathered through some of the bumpy chapters, bits and pieces of his powerful insights began to take shape to help me understand the political, historical, religious and cultural forces behind the economic policies that are affecting us today.

In the more interesting chapter titled Religion, it is uplifting to know Islamic rulers of the Ottoman empire did not let religiosity get in the way of their trades with the Jews and Christians across the Middle East and Europe. According to Beattie, the empire reached its zenith militarily and economically in the 16th century only to become static in the 17th century. On its decline, I wonder if any reader will concur or dare to concur on Beattie’s claim that the major impediment for the empire’s growth might have been the ossification of Islamic regimes.

Reading on but refusing yet to take any stance on Beattie’ provocative claims, I sail into another powerful chapter where the meaning of corruption is glaringly defined and economic impact of corruption between nations is compared. Beattie, as you would suspect, stamped his verdict that corruption is guilty of undermining a country’s growth. It is ironic to know that Indonesia prospered under the corrupt regime of Suharto while Tanzania stayed poor under the honest Nyerere. But you have to read further into the chapter to recognise the underpinning of Suharto’s triumphs and the underlying factors behind Nyerere’s failures. You will be better acquainted with the negative effects corruption has on Korea, the Philippines, India, China and wonder where Malaysia lies in this regard.

Few authors are able to turn the complexity of a scholarly discipline into mass market anecdotes; Beattie is indubitably one of them. Though the organization of his writing needs improvement, I am glad to have persevered and read on until the end. A profound field of study, Economic History, naturally, can only be gained with hard work.

Note: Formerly a book merchandising manager, Abby Wong is now residing in Sydney Australia and pursuing her master degree in economics.

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