J. Pulton

Cartoonish global conspiracy

Revisado: 10-16-24

Jason Hickel’s The Divide is one of those books that grabs you with righteous indignation, drags you through a morality play of good vs. evil, and then leaves you with… well, nothing. Not a blueprint, not a suggestion, not even a half-baked idea for how to fix the colossal problems he spends so much time railing against. It’s all pitchforks and torches, but nobody’s bothering to think about how to rebuild the village after the mob burns it down

Consider: Explanation 1: Poverty is driven by an intricate web of historical legacies, governance failures, global economic systems, and a bunch of other boring-sounding but critically important factors.

Or, Explanation 2: Poverty is the result of a nefarious plot by the IMF, World Bank, and shadowy multinational corporations, who are all twirling their mustaches and deliberately keeping poor countries down to line their own pockets.

Hickel, predictably, runs with Explanation 2 because, well, why wrestle with complexity when you can just slap a black hat on a bunch of faceless bureaucrats and call it a day? It's easier, and frankly, a lot more satisfying for readers who want someone to blame. But anyone who’s seriously studied economics—from Milton Friedman to Karl Marx—knows the world doesn’t work like that. Structural forces, incentives, and historical quirks play a far bigger role than some cartoonish global conspiracy.

And just a heads up—you might want to keep Google open as you read. A quick search will show that some of Hickel’s facts buckle under the slightest pressure. If something feels a little too perfectly packaged, odds are it is.

Next, consider his discussion of regenerative farming, which is a perfect illustration of where The Divide falters—not in factual accuracy, but in offering real solutions. Hickel rightly points out that regenerative agriculture has great potential for reducing carbon dioxide emissions and restoring ecosystems. Fantastic! But instead of proposing real policies that could encourage farmers to adopt these practices, he simply contrasts this "ethic of care and healing" (yes, really) with the "other schemes that got us into this mess in the first place." And that’s it. No actionable ideas, no roadmap—just vague moral posturing. Because apparently, all farmers need is a little cosmic guidance, not financial incentives, to adopt regenerative practices.

Meanwhile, in the real world, where people understand that moral lectures don’t pay the bills, farmers need incentives to adopt practices like regenerative agriculture. Every economic system—capitalism, socialism, and everything in between—struggles with how to align incentives with desired outcomes. It’s a tough problem, but one Hickel seems uninterested in solving.

Where he does propose solutions, they are half-baked. After bemoaning the power of global institutions, he suggests implementing a global minimum wage but without detailing the carrots and sticks needed to ensure countries adhere to it. Even if we imagine a world where countries actually obey this UN-mandated wage, Hickel conveniently sidesteps a critical issue: the informal labor market. How does he plan to ensure compliance with this policy in economies where informal work is already rampant, and would likely increase under such pressure? He doesn't say.

Similarly, his proposal for democratic elections to international organizations—replacing the Ministers of Finance and Trade who typically fill these roles—sounds bold, but it lacks real-world grounding. He fails to explore why direct elections for these roles would produce better results than the current system, where (in democratic countries) people elect presidents who then appoint these ministers. Are we really to believe that voters, already disillusioned with national elections, will somehow elect more effective global technocrats?

Rallying against villains is easy; wrestling with the messy realities of global systems? That’s where Hickel leaves you hanging. If you're after real-world solutions, you won’t find them here.

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Insightful, but bounces through time

Revisado: 07-09-21

The author is clearly knowledgeable about a broad swath of history. Throughout the book, he makes connections and draws parallels to very different historical periods. I found the digressions insightful when I was paying close attention. But, if was distracted for even a moment, I found myself wondering why the book had jumped one hundred years in time.

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Good info for beginners and experts alike

Revisado: 07-08-21

This podcast provides concise, sophisticated answers to important questions of WW2 history by a respected historian.

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Imperfect, but worth reading

Revisado: 07-07-21

Bastani envisions a future where automation liberates humanity from labor. In this hopeful vision, humans no longer must work to survive, but instead leave endless toil to machines, which produce enough that everyone can live a life free from scarcity.

Left unaddressed are arguments about the dignity of work, that work gives life meaning, and that the number one cause of death is retirement. As an economist, I share the author's desire for consumer abundance with minimal work, so I don't object to the omission. But there will be readers who think the book misses the entire point of work.

Bastani shares with Karl Marx a faith that competition between capitalists does drive technological progress and economic growth, which makes his vision conceivable. Much of the book describes technologies - from solar panels to asteroid mining to vat-grown meat to DNA editing - that he assures us will soon make all of our problems of scarcity disappear.

Ringing false is his repeated assertion that society suffers from “capitalist realism”—​the feeling that it is impossible to imagine an alternative to the current system. There are plenty of reformers and revolutionaries dreaming up improvements. But the broadly capitalist systems - from Sweden to the United States - have produced a lifestyle (for many but admittedly not all people) that is desirable compared to historical and international alternatives. Given that the bold social experimentation of 20th century largely led to famine and war, it is understandable that people today are cautious before experimenting with dreams of utopia.

Bastani does an excellent job of laying out one problem with the existing "capitalist" system. He points out that value of goods increasingly derives more from technology (that is, embedded information) rather than physical materials. Technology and ideas can be reproduced at zero cost, thus many goods can be produced at lower and lower marginal cost. But of course such goods require an upfront "fixed" cost, that is, investment in research and development.

A condition for economic efficiency is that price equal marginal cost. The marginal cost of "information goods" - music, films, academic papers, pharmaceutical drugs, designs for industrial robots - is near zero. And this holds true for ever broader swaths of the economy. Bastani points out that, if information goods are to be distributed at their marginal costs of production, they cannot be created and produced by entrepreneurial firms that use revenues from sales to cover their costs.

Though there is nothing intrinsically capitalist about it, our current system resolves this by creating artificial scarcity through copyright, patents and closed voluntary architectures (eg. Apple products). Such promotion of temporary monopolies generates profits as the reward needed to spur innovation.

Bastani then goes on to argue that no one has thought of a system to better resolve this problem, finishing chapter 3 with an emphatic "Until now!". He seems to imagine this is a self-explanatory "mic drop" moment since the following chapter moves on to completely different topics. As far as I can tell, the book says nothing about how to incentivize innovation. This might not be a problem if he was arguing that there was no need for further technological development or economic growth, but that's clearly not his argument: The book goes on to describe magnificent technologies which may appear in the near future, but clearly do not exist today.

Bastani describes a society where we all enjoy luxurious goods for free, but does not explain how we get there from here. His three policy prescriptions seem unrelated to the issues discussed in the book.
1. He goes on at length about the "Preston Model," a type of municipal protectionism which involves limiting competition to local business, rather than competing widely for the best price. While this may be an effective model to getting wealth to remain in rust belt towns, it was unclear how it addresses the key issues of the book - incentivizing technological progress while distributing the resulting abundance.
2. Bastani advocates socializing financial markets, or in his words "political banking." But how will "information" industries repay loans if they are distributing products at near-zero marginal costs. The problem presented in the book is that the optimal price for such products is intrinsically unprofitable.
3. Creation of universal basic services - education, housing, health care, transport, legal services, and information. He says that, a few decades from now, receiving a bill to pay for internet, public transport, or a home will feel as strange as paying for an email account or Wikipedia today.

Bastani dismisses universal income (UBI), arguing that an affordable UBI is inadequate; an adequate UBI is unaffordable. But if an adequate UBI is unaffordable, how can universal basic services be affordable. How is it cheaper for the government to pay for people's housing, transport, education, and health care?

For writers looking to expand on Bastani's concept, below are some questions they might consider.

The book leaves unexplored how abundant information gets turned into new products. Are universal basic services going to include the most information-abundant products. Do we really want government to produce the music, movies and novels? The smart phones? Is there any evidence that government can create the next product as revolutionary as a smart phone? How likely is it that government would create something as disruptive as the Uber app?

The book laments declining population without asking whether resulting labor shortages might cancel out automation-induced labor surpluses. Following this line of thought, might automation combined with existing social security pension programs lead to fully automated luxury communism for the elderly? Perhaps youth will continue to work as before, but working years will be an ever diminishing share of increasing lifespans. Would this be a glide path to a world approximated what Bastani envisions?

Will combatting climate change require labor - installing solar panels and whatnot - that partially negates the reduced labor demand from automation? How will this delay the timeframe before humanity can be liberated from work?

Scattered throughout the book are seemingly half-baked ideas unrelated to the book's theses. The author has strong opinions on an astounding array of topics. His thoughts on monetary policy: Central banks should increase their acceptable rate of inflation to benefit debtors, but also target zero house price inflation? He repeats the elementary school myth that Henry Ford raised the wages of assembly line workers so they could afford to buy his cars (despite the obvious reality that Ford received only a tiny fraction of those wages back in the form of car sales). The book frequently laments low productivity and economic growth rates; a strange emphasis for a book whose overarching argument is that scarcity will soon be a thing of the past.

Despite the many flaws I've outlined above, I do recommend the book because it takes seriously the implications of technological progress, and lays out a hopeful destination.

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Great summary of an underappreciated economist

Revisado: 06-29-21

Joseph Schumpeter doesn't get the appreciation of Keynes, Marx, Hayek, or Friedman, but he had as strong an influence on my understanding of economics. For people less familiar with Schumpeter's ideas than other great economists, this is a great introduction.

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Admirably concise and honest

Revisado: 06-28-21

While I don't agree with everything in this book, I give the book 5 stars for not wasting his reader's time. This book achieves what it sets out to do, demonstrating that life isn't as bad as doomsayer politicians make out. While prosperity may be increasing at a slower rate than in previous generations, absolute standards of living are better than at any time in history.

The author admirably turned the book over to competent ideological opponents - standing in for skeptical readers - who present the vigorous counterarguments. Finally, the author makes honest attempts to address this issues raised by the critiques.

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book suffers from a split personality

Revisado: 06-28-21

This book suffers from a split personality. On one side is a fascinating anthropology and history of debt and related economic subjects. On the other side are somewhat random political opinions which don't relate to the anthropological thesis of the book.

The history of debt before the existence of money described in this book is a society that few modern readers will find desirable. People lived in small communities and "borrowed" things from each other, creating a interlocking system of mutual obligation. In this world, you want your neighbor to owe you, so you can get what you need when the time comes. From a modern perspective, this is extremely limiting because it is not possible to do business with strangers, severely constraining the size and scope of the economy and condemning pre-modern peoples to material poverty.

I'm sure there are modern people who wax nostalgic about village social live, but I think most people appreciate the independence and privacy that today's anonymous economic transactions make possible. Presumably the author finds the village life desirable, but he is honest about a number of tribal practices that anyone concerned with women's or human rights would find barbarous.

From here, the book describes the formalization of debt arrangements, and eventually the invention of money. For the early modern era, the book describes debt peonage and other arrangements which resemble slavery. The book acknowledges slavery and near-slavery among tribal cultures, but describes how slavery and near-slavery of the early modern era is more offensive.

The book expresses excessive offence at teaching conveniences of economics 101, in particular elucidating the usefulness of money by describing a hypothetical barter economy as an inconvenient alternative. The book seems to think that by discrediting this hypothetical scenario, he has dealt a devastating blow to his nemesis, the profession of economics. I don't think many economists put much thought into barter economies, and I imagine if any economics 101 textbook writer listens to this book, they will remove the offending sentence from their introductory chapter.

The book doesn't attempt make a coherent case for its core policy recommendation of debt jubilee for everyone. Its impacts on people's future ability to take loans is unaddressed. Nor does the book consider that the biggest beneficiaries of such a policy are wealthy - after all the poor can't take on nearly as much debt as the rich. I was quite surprised that such a detailed look at the history and anthropology of debt would casually propose a radical economic experiment without even a cursory examination of the pros and cons.

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More cold-war history than analysis of current aid

Revisado: 06-28-21

I had high expectations for this book. Identifying unintended consequences of America's efforts to improve the world is one of the most important efforts of the post WW2 era. This book - as a work of history - offers a decent summary of Indonesia, El Salvador, and Korea, but little that is new. And as a critique of current aid policies, the book offers little substance.

The idea that food aid can prolong conflict, and that budget support is fungible and thus can free resources for security services, was widely established in past decades. Of course, it is fine to write yet another book on these topics, but to be forward looking, a new book should look at aid practices of today. Direct food aid has been drastically scaled back, and is largely used in the more defensible context of natural disasters rather than conflict situations. Budget support is now extremely rare. And aid agencies have a trigger finger when it comes to withdrawing aid in countries with democratic backsliding. Finally, a lot of aid irritates authoritarian host governments because it is directed to civil society groups advocating for democratic, environmental, or economic reforms.

All of these reforms to US aid policy reduce the concerns described in Aiding and Abetting while having their own downsides. Irritating host governments with support to civil society in the ex-Soviet sphere of influence hurts U.S. relations with host governments and infuriates Russia. Withholding food aid from conflict zones results in immediate starvation, though hopefully at the long term benefit of shortening civil conflict. Directing health and education funds to NGOs is less cost-effective than providing budget support, and complicates the host government task of coordinating health and education policy. Chapter 6 makes passing reference to some contemporary debates, but 90% of the book is focused on the three cold war case studies. In particular, I would have appreciated more than a few minutes exploring what went wrong in South Sudan.

I also would have been interested in some analysis of 21st century aid to Indonesia and El Salvador. What effect do modern aid practices in the absence of civil conflict have on human rights practices? Presumably, the modest aid packages the U.S. provides to troubled, but not failed, states (which is the situation of most aid beneficiaries today) have different impacts than massive aid packages to countries at war.

Ultimately, this book frames the familiar, troubled history of cold-war Indonesia, El Salvador, and South Korea in terms of correlations with U.S. aid. The argument for causation is plausibly implied, but not proven. The book failed to address forward looking questions. Do 21st century reforms of U.S. aid policy indeed improve the concerns expressed in this book, as well as the number of books from the 1980s and 1990s which inspired the reforms? If not, why have they failed? If they do improve on these issues, how do the benefits compare to the costs outlined in my 3rd paragraph?

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Not an explanation of the financial crisis

Revisado: 05-04-21

This book does a good job of digging into the weeds of TARP oversight. I recommend the book with the caveat that it will not help you understand the big picture of the financial crisis.

This book doesn't do what some readers think it does, specifically make a case against Troubled Asset Relief Program TARP. The author is a prosecutor, not an economist or bank regulator.

The author comes across as well-intentioned at providing oversight of the Troubled Asset Relief Program. He earns 4-stars for his thoughtful identification of ways that fraudsters might game the program, and he shows that preventing such fraud was not the highest priority of the Treasury Department. But of course, the Treasury Department's priority was to prevent another great depression. He doesn't address the fact that TARP seems to have succeeded - the financial system didn't collapse. TARP was repaid, even earning some profit to the government. And the author's very legitimate fears of fraud seem not to have materialized, at least on any large scale.

Throughout the book, the author's antagonists argue that the author's proposals would have jeopardized the success of TARP without providing commensurate benefits at reducing fraud. Naturally, while listening to his book, we are inclined to take his side in these disagreements. But the book simply doesn't provide enough detail for the reader to make an informed judgement about who is right. The truth is that there are tradeoffs to empowered IGs; they reduce fraud at the expense of creating a more bureaucratic, CYA culture. And, by focusing on process and indicators, IG performance audits encourage what in "The Wire" was called "Juking the stats." Sometimes making government a little more sclerotic is a small price to pay for better accountability, but everything has tradeoffs. I wish the author had addressed the tradeoffs.

The author embraces the label "backseat driver" that was given to him by his antagonists. Yes, his job was to look back at mistakes made by government officials. But I found his big-picture policy critiques much less persuasive than his micro-level fraud prevention commentary. As the inspector general during the financial crises, he was like a the backseat driver of a car that swerves off the road to avoid hitting a semi truck. Now, imagine that backseat driver criticizes the damage done to the car by leaving the road without explaining how he would have avoided the semi truck.

The author makes an impassioned case for reducing the principle mortgage balance for people who bought houses they couldn't afford. He acknowledges that this was unpopular (such programs were the original inspiration for the tea party), but suggests homeowner bailouts were only fair in the context of the bailouts of too big to fail financial institutions. But fair has nothing to do with it. The unfortunate need to bailout financial institutions is in the name, "TOO BIG to fail". Underwater homeowners were, by contrast, clearly small enough to fail. One unfair policy that rescues the economy doesn't justify an additional unfair policy that is unrelated to economy-wide risks. The financial deregulation policies of the Reagan, Clinton and Bush administrations set us on a path that would eventually require the bank bailout. Once that path had been set in motion, the task was to save the economy at minimal cost, not create wide-ranging programs that didn't address the semi-truck in our headlights.

Bailing out homeowners (by reducing the mortgage principal) would be nice, but the author never presented a coherent alternative course of action that takes account of the consequences of imposing very large losses on the banks. To do so would have required hundreds of billions of dollars in additional bailout money. The government could have done this, but likely at the cost of the health care reform that was enacted around this time. Money and political capital are not unlimited. The bank bailouts, by contrast, were loans that were repaid in full, and even generated some profit for the government.

I recommend this book to readers who want a firsthand account of an IG and thoughtful discourse on preventing fraud in government financial sector programs. For a big-picture understanding of the financial crisis, I recommend "After the Music Stopped."

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Discredits Chomsky rather than rebut him

Revisado: 04-27-21

I hoped this book would lay out Chomsky's arguments in good faith and present counterarguments. Unfortunately, it does nothing of the sort. It devastatingly discredits him as an apologist for Cambodia's Khmer Rouge, among other examples that show Chomsky had horrifyingly bad judgement. If he were a candidate for office, this might be a useful exercise in ensuring that someone with such bad judgement isn't elected to a position of authority. But Chomsky is an intellectual. His influence is in his original ideas, not his bankrupt moral authority and despicable associations.

I have never been able to make much sense of Chomsky's arguments. I know Chomsky subscribes to an ideology of anarchism or libertarian-socialism, but that sounded more like a complaint about employer-employee power relationships than a proposal for making a better world. Perhaps the authors are equally mystified by Chomsky, because they merely mock the label libertarian-socialism without defining or discussing it. Perhaps Chomsky does spout pure nonsense, but given that generations of people have found Chomsky insightful, I think it is fair of me to expect of a book about Chomsky would at least explain why his adherents find Chomsky persuasive.

The strongest chapter of the book covers Chomsky's attacks on the "corporate" media. In the context of today's rightwing attacks on the American media, it was interesting to hear a full-throated conservative defense of the American media.

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