Book DetailAuthor/Editor(s): Richard S. Grossman
Publication Date: October 24, 2013
Publisher: Oxford University Press
Size: 1.01 MB
Book DescriptionIn recent years, the world has been rocked by major economic crises, most notably the devastating collapse of Lehman Brothers, the largest bankruptcy in American history, which triggered the breathtakingly destructive sub-prime disaster. What sparks these vast economic calamities? Why do our economic policy makers fail to protect us from such upheavals?
In Wrong, economist Richard Grossman addresses such questions, shining a light on the poor thinking behind nine of the worst economic policy mistakes of the past 200 years, missteps whose outcomes ranged from appalling to tragic. Grossman tells the story behind each misconceived economic move, explaining why the policy was adopted, how it was implemented, and its short- and long-term consequences. In each case, he shows that the main culprits were policy makers who were guided by ideology rather than economics. For instance, Wrong looks at how America's unfounded fear of a centralized monetary authority caused them to reject two central banks, condemning the nation to wave after wave of financial panics. He describes how Britain's blind commitment to free markets, rather than to assisting the starving in Ireland, led to one of the nineteenth century's worst humanitarian tragedies- the Irish famine. And he shows how Britain's reestablishment of the gold standard after World War I, fuelled largely by a desire to recapture its pre-war dominance, helped to turn what would otherwise have been a normal recession into the Great Depression. Grossman also explores the Smoot-Hawley Tariff of 1930, Japan's lost decade of the 1990s, the American subprime crisis, and the present European sovereign debt crisis.
Economic policy should be based on cold, hard economic analysis, Grossman concludes, not on an unquestioning commitment to a particular ideology. Wrong shows what happens when this sensible advice is ignored.
His writing is every bit as clear as his title...the author piques our interest with spicy historical detail...he has written a lovely tour, admirably brief, through centuries of economic folly.
--Roger Lowenstein, Wall Street Journal
Grossman does an excellent job in picking up the most severe economic policy mistakes, providing a thorough description and analysis of them, and giving us anecdotes linked to the described events. Wrong is a very eloquently written book that leaves the reader with many new insights.
--LSE Review of Books
A splendid book about the history of economic policy making...unlike the efforts of some popular writers to draw lessons from economic history, Grossman has mastered the scholarly literature for the cases he chooses...I have great admiration for this book. Grossman addresses an important question and his judgments are uniformly well reasoned and balanced. He is also an outstanding teacher of economics.
--Hugh Rockoff, EH.net
Engaging... a welcome publication.
--Jim McAloon, Victoria University of Wellington, Australian Economic History Review
Those who do not learn from the past are doomed to, well, not learn from the past. In an age when ideology rather than economic reasoning increasingly drives public policy, Richard Grossman's provocative and entertaining review of historical experience reminds us of how ideology has led us astray before.
--Barry Eichengreen, George C. Pardee and Helen N. Pardee Professor of Economics and Political Science, University of California, Berkeley
The best way to get economic policy right in the future is for aspiring journalists, economists, and policy wonks to read WRONG, a brilliantly concise and entertaining guide to learning from one's mistakes. It's going straight onto my business journalism students' reading list.
--Sylvia Nasar, author of Grand Pursuit and A Beautiful Mind
This is a fascinating book about great economic policy mistakes. If you do not want to be the one who triggers the Great Depression on your watch, or who loses an entire colonial empire because of a small tax, this is the book to read. It even tells you about why we are in the mess we find ourselves in. Full of great vignettes, it is an enjoyable introduction to history's great economic bloopers.
--Raghuram Rajan, Eric J. Gleacher Distinguished Service Professor of Finance, Booth School of Business, University of Chicago and Chief Economic Advisor, Finance Ministry, Government of India
Millions of people have suffered greatly, nations have fallen, and wars have been fought because of economic policy blunders. Yet while statesman and generals constantly restudy and relearn the lessons of Pearl Harbor or Vietnam or Munich, economists too often fail to learn lessons from past failures. That makes this book both novel and important. It should be read by anyone taking up a significant economic policy position and anyone seeking to understand and influence economic policy.
--Larry Summers, Charles W. Eliot University Professor, John F. Kennedy School of Government, Harvard University and former President of Harvard University and Secretary of the U.S. Treasury