Wednesday, March 20, 2013

Good Niall, Bad Niall. A Review of The Great Degneration: How Institutions Decay & Economies Die by Niall Ferguson

There seem to be two-- or perhaps more--Niall Fergusons out there. One is a very accomplished historian, who, starting with work on German inflation and a biography of the House of Rothschild and going on into The Cash Nexus, established his bona fides as a historian, especially in the financial realm. His The Pity of War and  The War of the World move into thoughtful considerations of the great upheavals of the 20th century. In addition to the books, he parlayed his work into television programs. More recently, his work has tended toward more popular, synthesizing works, such as The Ascent of Money and Civilization: The West and the Rest, neither of which break new ground but each addresses a wide scope of history that merits consideration. And finally, especially since his emigration to Harvard, he has become a commentator on the American political and economic scene. His endorsements of McCain and Romney (especially the later in a derided Newsweek cover story) were poorly received (and rightfully so). His forecasts of the economy that cried for austerity have missed the mark (and to his credit, he's admitted as much, even granting some grudging credit to Paul Krugman for getting it right). So here we have the (at least two) Fergusons: one an insightful and energetic historian, and the other, a rather predictable and off-putting conservative hack. (Perhaps a bit harsh, but he can be so predictable.) So which Niall Ferguson wrote this book?

Both. The Great Degeneration: How Institutions Decay and Economies Die is written on the basis of the Reith Lectures that Ferguson gave on BBC 4, a long running and venerable forum. Ferguson's book based on the lectures is at once topical and historically broad. Ferguson discusses four characteristics that distinguished the rise of the the modern industrial states and made them--especially the U.S. and U.K.--so successful. The list is neither unique nor controversial: democracy, capitalism, the rule of law, and civil society. But as Ferguson's title suggests, he perceives a decline in each attribute. The success or failure (or decline) of any of the institutions and cultures that support and promote the four characteristics will determine the well-being of a nation. Starting with democratic institutions, Ferguson argues, quoting Burke, that the social contract isn't between individuals, but between generations ,and that the current generation (we Baby Boomers) have saddled a burden of debt on posterity. Underlying the capitalism that has fostered our economic growth, we have placed too many restrictions in response to the "Little Depression" , thereby choking our institutions. The rule of law has become, he claims, the "rule of lawyers". And finally, civil society has been largely replaced by the state. Each of these arguments merits serious consideration.  When Ferguson takes a long view uses insights from a variety of fields, such as evolution, statistical thinking a la Nicholas Taleb, and the cliodynamics of Peter Turchin to buttress his insights he can prove quite engaging. On the other hand,his arguments about lawyers cites statistics that I suspect come from Chamber of Commerce types, such as the cost of "litigation" on manufacturing. Know this: when it comes to regulation or litigation, no one, but no one, outspends corporate America on whatever it takes to protect their interests.And so it  goes, for each insight it seems, we have a pat conservative analysis.

And so it is that Ferguson seems to cite problems and remedies that are all too "conservative", as in pro big business. (Ferguson is not a no-nothing on social issues.) Ferguson can't quite pull back from what seem to be quite pugilistic instincts in politics, a Thatcherite through and through, although Maggie and Ronnie are now long gone. And so Ferguson ends the book by quoting President Obama's "you didn't build that" remarks in the same light as other conservative hacks: Obama is promoting the State (always in caps for this crowd) against "civil society". The great irony here, of course, is that Obama cut his teeth in civil society as a community organizer, and his instincts are amazingly centrist and conciliatory even though the center has moved far right and the Republicans lack anyone with whom he can conciliate. Also, in the context of what Obama said, there is no glorification of the State, only the recognition that the government does provide a crucial avenue for collective action.

In the end, I'd have to say this is more "bad Niall" than "good Niall" but still with flashes of insight that you wish more of. We can only hope that the good Niall comes back.

NB: Niall Ferguson was a #JLF participant. 

No comments: