5 comments about Mr. China: A Memoir.

1. Although he certainly never intended it as such (MR.CHINA is subtitled "A Memoir" and has a target audience of gung ho, wanna-get-rich-investing-in-China business types) this is probably the most accurate and the most devastating portrayal of authentic Chinese culture since Bo Yang's THE UGLY CHINAMAN. For those looking at becoming better aquainted with Chinese business culure, or more precisely: Chinese business ethics, here's a free starter lesson:
   
   There aren't any.
   
   Foreigners shouldn't take this personally. The Chinese have been cheating each other as a matter of course for centuries. What's more, they have been so poor and so oppressed for so long that they will go to nearly any extent in order to make their bundle and head for the hills. In Taipei, Taiwan, in which I live and in which there is a free press, there are an immoderate number of newspaper articles that mirror the anecdotes conveyed by Tim Clissord in what is a very enthralling book. Scheming, swindling, duplicity, and general dishonesty are deeply, deeply ingrained aspects of the national psyche in China. And so, when some hopelessly niave Westerner waltzes into town with a suitcase full of cash and a bunch lofty ideas concerning efficiency and profit sharing, then, well, if the stars didn't just align.
   
   "Nonsense," cries the next Mr. China (a sentiment echoed in some of these reviews) "I'm a trained lawyer." Fine, but you'll have to bribe the anti-corruption officials just to open up dialogue. "If I got suspicious of my Chinese partner, I'd have funds frozen." Great, if the bank manager (who might very well be your partner's cousin) hasn't emptied the vaults and flown to Hawaii. "My factory in Guangzhou is humming along just fine." For now, but are you sure the land title hasn't been transferred, or the managers haven't used your money to build an identical plant across town? "My business partner is a man of integrity." Read the book.
   
   There's a hitch to getting rich in China. Each and every one of the people you will have to deal with has the exact same idea.
   
   Troy Parfitt, author



2. Tim Clissold's Mr. China provides an excellent view of how business was done in China in the nineties, and how rapidly China was building out through that period. It also provides background on common business and negotiating strategies used by Chinese JV partners in the period before China joined the WTO (World Trade Organization) in 2001 at the Doha round.
   
   Tim provides one view of the deals, while Jack Perkowski's book, Managing the Dragon: How I'm Building a Billion-Dollar Business in China, provides a different perspective. Perkowski is the Wall Street investment banker mentioned in Mr. China.
   
   As someone who lives and works in China, I can attest to the truth of the many frustrations mentioned in the book. The trouble comes when westerners try to force change on the Chinese at a pace of the westerners' choosing. The change is picking up speed, but only because the change is coming from within the China, and not being forced by external pressure.
   
   Through it all, the author comes through as someone who although occasionally frustrated with his Chinese business associates, has a deep respect and affection for the Chinese people. This comes through in the final paragraph of the book:
   
   "If by writing this book I can make the Chinese people seem more human, less mysterious or threatening, just flawed and beautiful like us, then the troubles of the past ten years have been worthwhile."



3. This is a highly entertaining story of the early days of investing in China when every entrepreneur was trying to make as fast a buck as possible. Those were truely wild west days and they have largely passed but they make very useful reading for anyone investing there as it was not that long ago.



4. Mr. China, with great humor, is what happens when direct investors become infatuated with (1) the 'development potential' of a stable, intelligent, resource-laden emerging market country (particularly a communist one) and (2) their own messiah-like potential to bequeath prosperity to the country's impoverned people. With a terribly poor understanding of Chinese law enforcement, politics/communism, culture and very limited Chinese relationships, they begin rapidly investing in China eager to beat others to the punch. Inevitably they learn that (1) 'controlling investor' entails more than 51% equity ownership, (2) only enforceable rules count, (3) rules aren't enforceable unless you're better connected to the CCP, (4) communism isn't just a theory; it's a lifestyle, (5) if you are a well-intentioned humanist on the inside but look/act like a reincarnated imperialist, guess what people see, and (6) yes, all the normal precautions of private equity investing in fact cannot be ignored for the sake of speed, culture or quasi-charity.
   
   Great read for anyone interested in direct investing / business management in China or simply emerging markets in general.



5. "Mr. China" is a collection of vignettes of real-life misadventures by Wall Street in its drive to invest and profit from China's production abilities in the 1990's; attempts to make profit from investing in the "one billion three." Here, the author is the first person protagonist as he tries to supervise his many venture factories.
   
   Every possible disaster ensued: flooding; national economic downturns; international incidents. Personnel problems topped the list. The Chinese directors manage to do everything possible to sink their own ships perhaps while making new ones: resist modern efficiency; embezzle; set up competing businesses; spend millions on fruitless unauthorized enterprises and to play the government and the courts against their foreign partners. The disasters drove the author, via stress, to near death.
   
   The book is an effort to convey and to understand what happened. The surprising conclusion of the book is that the author believes the business mismatch of East and West, when looked at from the Chinese perspective, shows, in fact, the strength of the Chinese character: in times of trouble, to look to the short term and seize advantage when offered. In the end the author became life long friends with many of his adversaries.
   
   The book seemed long on disasters and short on solid insight. But the book can serve well as a cautionary tale to today's investors in China's industries.

No comments about The Power of Sustainable Thinking: How to Create a Positive Future for the Climate, the Planet, Your Organization and Your Life.

No comments about Sustainable Fashion and Textiles: Design Journeys.

2 comments about Falling Behind: Explaining the Development Gap Between Latin America and the United States.

1. Great writter amazing book,
   You go thru this book as he was talking to you.
   I have read most of his books and he always keeps amazing me,amazing knowleadge, great writter.



2. Falling Behind contains nine excellent essays exploring different aspects of why Latin America and the United States have different income levels. The key points in those nine essays are nicely summarized in Francis Fukuyama's conclusion, the tenth essay. The authors were well chosen to reflect both Latin American and U.S. perspectives.
   
   I found that some of the arguments were more persuasive than others, especially the time series work that showed much of the loss of relative economic performance occurring during the time when Latin American countries were establishing their governments. That evidence seemed to be the smoking gun that shows that economic development requires stable, effective government.
   
   Of equal interest were the investigations of the factors that don't seem to explain the differences, including religious culture, tropical climate, and disease.
   
   The book is short on prescriptions. But Latin America seems likely to profit from improved government policies for economic development, better educational results, more inclusive two-party politics in democracies, improving security of property rights, making entrepreneurship easier, and avoiding regime changes.
   
   Historical data make it hard to test everything, but I did wonder if geography might not have played a bigger role in falling behind the United States than this book suggests. A lot of the economic development of the U.S. in the early industrial revolution depended on having lots of cotton growing and the raw materials to make steel-based goods that could be inexpensively shipped across the North Atlantic to Europe. Latin America mostly lacked those same resources and access to the European markets at the same time.
   
   I'm sure the debate over what went wrong in Latin America will continue as long as Latin America's prosperity lags behind the United States. It's a subject well worth considering to provide guidance for other developing regions, especially in Africa.

5 comments about Kicking Away the Ladder: Development Strategy in Historical Perspective.

1. This is a book I intend to reread a year from now. I believe it has changed my perspective regarding international politics and developmental issues, so from now on I'll try and interpret facts through the perspective Chang provided. Meanwhile, I'll try and follow some of the bibliography he suggests to see if I can mitigate some of my doubts.
   
   If you believe you're a neoliberal, this book is for you. It will challenge some of your most basic beliefs - and what could be better? You might be able to disagree with him entirely, but I'm sure that reading this book will sophisticate your thoughts in the matter and throw some doubts where there was none. Too bad this is not the best-seller it could have been.



2. This book is a must read for all Ministers of finance and economic development in the third world. Policy makers in the third world should read this book over and over. Also all libraries in the research department of central banks in third world countries should have this book. Third world policy makers can definitely use this book as the starting antidote for the `developmental advice' that emanates form teams of economists who descend from the IFIs.
   
   This book would be required reading for my students (at New College of Florida) in development economics.



3. The author does an excellent job in showing that ,historically, the role of government spending(on infrastructure,public goods,public works,education and public health),import restrictions,tariffs,quotas,etc., has played a major role in the economic development of every single first world country over the last two hundred years.This fact directly refutes the claims of many,if not all,economists,especially those making policy decisions at the World Bank,International Monetary Fund,and World Trade Organization, who claim that free trade is the way a country reaches prosperity.Free Trade is interpreted in a neoliberal(libertarian anarchist)manner to mean that there is minimal government spending and no tariffs whatsoever.The author demonstrates that the historical record provides zero support for this approach.The author is certainly correct.
   My major criticism of the book is the author's apparent belief that Adam Smith supported the ideas of Laissez faire and free markets.This is simply incorrect.Adam Smith was a major SUPPORTER of both revenue tariffs and retaliatory tariffs if there was any chance greater than 0 that the retaliatory tariff would lead to the repeal of the original protective tariff that had been instituted by the offending country.This is all covered on pp.434-439 of the Modern Library(Cannan)edition of Smith's Wealth of Nations(1776).



4. Ha-Joon Chang argues that free trade and the principle of comparative advantage were used by advanced industrial countries to keep undeveloped countries on agriculture instead of developing their own manufactures (which would have made them competition for the industrialized nations). Similar to the way that those individuals who have accumulated much capital support a "free" contract between themselves and wage-laborers, in order to employ them for labor and then sell the products of their labor back to them after taking a profit, those countries which have already industrialized prefer "free" trade between nations, in order to maintain a similar type of dependence of the undeveloped world upon the already developed world: with developed world capital employing the labor of citizens of undeveloped nations, then selling the products of their labor back to them through international trade (after taking a profit).
   
   If you are not already familiar with the early history of free trade (I'm referring to the pre-WWI period, when there was a push toward international economic integration that mirrored today's globalization but was shattered by the advent of the war), and of the intellectual arguments marshaled in support of it (by the economic theorists of *developed* nations, don't forget), such as David Ricardo's principle of comparative advantage or Adam Smith's theories about the supposedly even benefits of the division of labor, then as background to Kicking Away the Ladder I would suggest you read Global Capitalism: Its Fall and Rise in the 20th Century by Jeffry Frieden. That was my only background to these issues, but it was enough. Just the right amount in fact.
   
   Or alternatively you might just wiki a few concepts:
   -Comparative advantage
   -Primitive accumulation
   
   If you check out the Comparative Advantage wiki page and some of it looks familiar, I didn't plagiarize this review. I wrote that section of the wiki page. :)



5. In this pioneering book, Ha-Joon Chang, Assistant Director of Development Studies at Cambridge University, explores development strategies in theory and practice. First, he studies how the developed countries became developed using active industrial, trade and technological (ITT) policies. Then he looks at the role that social institutions play in economic development. Finally, he proposes some lessons for the present.
   
   He shows how Britain was the first country to perfect the art of infant industry promotion. Then he looks at the USA, which still has subsidies for its farmers, quotas for textiles, huge state spending on military R&D, trade sanctions against many other nations, and state funding for R&D in the pharmaceutical and biotechnology industries - all protectionist measures.
   
   All the developed economies used active ITT policies, yet they now promote free trade for all, claiming that it will benefit all. Renato Ruggiero, the first Director of the World Trade Organisation [WTO], said in 1998 that this world order has `the potential for eradicating global poverty in the early part of the next century'.
   
   But free trade policies have failed: they haven't delivered the promised growth. Free trade harms the less developed countries' national manufacturers and thus their prosperity in the long run.
   
   A study of 116 countries showed that their GDP per head grew 3.1% a year with 1960-80's interventionist policies, but only 1.4% with the post-1979 Thatcherite policies. This study also proved that the quality of a society's institutions is not the key to growth; so does the similar slowdown in the developed countries since 1979. The World Bank and the IMF impose conditions that they say will ensure that `good governance' aids economic growth, but good institutions are the result, not the cause, of economic development.
   
   Chang shows how the developed countries' states have vested interests in keeping poor countries as providers of cheap raw material and labour, in preventing them from emerging as rivals. The WTO restricts developing countries' ability to pursue active ITT policies. The WTO is a modern version of the unequal treaties that Britain and others imposed on China and other semi-independent countries in the 19th century.
   
   The developed countries' states are indeed kicking away the ladder to stop others climbing up after them. They say, `Do as I say, not do as I did'. But today we too need active ITT policies to get us out of the slump.

5 comments about A Contract with the Earth.

1. I have great respect for the intellect of Newt Gingrich - his take on "global warming" is interesting if for no other reason it suggests that a public/private partnership will really be the only way the issue will ever be effectively addressed.
   
   This book does drone on and on about what government is NOT doing. I mean ON and ON. Fine - I get it. What is the solution?
   
   All in all, it is a good book - but I wish I had borrowed it from the library and not paid good money for it.



2. The basic theme of conservation and recycling is valid. But the presumption that man made Carbon Loading a primary cause of Global climate change is a concern. A concern because of the potental harm to the human condition if we are to take radical actions to midigate this UNPROVEN theory. Radical actions as promoted by the Left wing radicals - including Al Gore - would cause a major decline in world economy, putting more people into poverty.
   The promotion of reforestation and managed forest land is good. But where to Human civilization meets nature, the answer cannot always be that nature trumps Human activity. Again that would cause a decline in the human condition. I agree there needs to be a balance and technology will certainly be our salvation.



3. A lot of rehash of old ideas and trite science. I was disappointed, especially since i have been a big fan of Newt's philosophies and politics.



4. 
   This is an interesting look at merging American conservative values with environmentalism. Using the concept of the Contract with America that ironically failed to have any of it points survive, but helped bring the conservatives to power making it a successful manifesto; Newt Gingrich and Terry L. Maple provide ten points to save the environment, but not at the cost of the economy. The key unlike the 1994 tenet is reconciliation with all sides moving past rhetoric into doing the right thing politically while encouraging "compatible partnerships" between business and environmentalists. However some of the hug the other side tone is lost when the authors condemn the "Inconvenient Truth" crowd as being the drivel of activist scientists (taken from the mantra of activist judges as if society would accept as professionals, inactive judges or inactive scientists). Well written and interesting as the writers make a concerned case for saving the planet without destroying business interests, CONTRACT WITH EARTH is an engaging treatise at how the economy and the environment can coexist in harmony, but the book lacks deep fecundity as Newt Gingrich and Terry L. Maple never drill past the surface mantle.
   
   Harriet Klausner



5. This was a refreshing and insightful book from a political figure with a bipartisan message for us all to appreciate. I got on to this book when listening to an interview of Gingrich on NPR. I am curious if it were not for the timing in fall of 2007, with rise to a high visibility political season, would the interview had taken place. In that interview Gingrich was asked if he is running for President. He said he was not, for the same reason Al Gore is not running. He feels he can accomplish more for the world with regard to the environment as a citizen than he could as President, being encumbered with politics.
   
   What is Gingrich's message? First is unity in the cause. Not just across national party lines but across international lines as well. Second is recognition that we do not have all the facts, in terms of the full balance of the ecosystems of our planet earth. Third is the facts should not be proprietary but rather universally shared. Fourth, is government at all levels and business need to come together with effective participation and policy, in a cooperative posture. Fifth is education of our youth and remedial education of our elders on the individual contributions through consumerism, philanthropy, voting, and life style changes that can lead to a cleaner environment. All this says a collective conscience with one unified goal is essential. The key yet silent word through out the book is balance.
   
   I was somewhat intrigued at a couple byproducts brought about with a collective conscience on the environment... to see the complete review do a keyword search on cigarroomofbooks

5 comments about In Spite of the Gods: The Strange Rise of Modern India.

1. Luce is very candid and honest about the good & bad of India. Good book to read for an "outsiders" (non-Indian) viewpoint.



2. This is a terrific, highly readable book on the many facets of political, cultural and economic systems in India and how they effect the well being of its people and India's international relations. I knew very little about India and this book was the perfect way to start learning. I highly recommend it. It is extremely interesting and a needed primer considering the growth of India's economy and potential world influence. The comparisions with China are particularly good.



3. I am halfway through the book as of now but I do see an overall bias in the book highlighting the negatives. For example the author spends a huge amount of time describing UP & Bihar the northern states and how corruption is common then just a couple of pages on the south progressing.
   
   When talking of the BJP rule the concentration remains on the right wing attitude and the development that happened during that time is completely ignored.
   
   If you ignore the negative bias that the author has against India and it's governance the book is very well written and has a lot of interesting facts. Definetely a good read.



4. ­­­­Wondering About India: Palimpsest or Pentimento?
   
   RAJESH C. OZA, Jun 12, 2007
   
   In Spite of the Gods: The Strange Rise of Modern India by Edward Luce. Doubleday, January, 2007. 383 pages. $[...].
   
   Decades ago A.L. Basham wrote an academic tome titled The Wonder That Was India. I happened across a pristine copy in a second-hand bookshop near the University of Chicago, where Indologists were doing first-class scholarship about the Indian subcontinent. My way of belonging to that community was to acquire the books that those scholars wrote and read. While I have read most of the books that I've purchased, Basham's book has remained pristinely unread on my bookshelf. In part, I was intimidated by its size (568 pages). And then there was the weighty title written in the past tense. Every time that I have lifted the book off of its shelf, I've groaned at its heft and silently complained, "But my India is a wonder."
   
   Edward Luce's In Spite of the Gods: The Strange Rise of Modern India is an antidote to books that suggest that the vitality of Indian civilization expired sometime between the Mughal Period and British Imperialism. Luce shares the following anecdotal gem to support his case that Indian culture has an unparalleled thread of continuity: "When A.L. Basham, the British classical historian, wrote his still widely admired book The Wonder That Was India in 1954, he tried to persuade his American publishers to make a minor alteration in the title .... Professor Basham said that in India's case the `was' should be changed to `is,' since the country's civilizational story was unbroken." The publishers were unmoved by the professor's argument.
   
   Happily, Luce's readers will be moved by the lively writing and provocative arguments in In Spite of the Gods . Page after page is filled with quote-worthy insight. The careful reader is rewarded by questions that these insights raise. For example, Luce notes that "in India the modern lifestyle is just another layer on the country's ancient palimpsest ... Most Europeans tend to think of modernity as the triumph of a secular way of life: church attendance gradually dwindles and religion becomes a minority pastime confined to worshipers' private lives ... In Europe the past is the past. But in India, the past is in many ways also the future."
   
   But is India a palimpsest, a layering of old, religious ways onto the new? Do tradition and modernity coexist like a grandparent and grandchild in an extended family? How far below the hip-hop-happening surface of agnostic call centers does one need to scratch to discover Aryans galloping on horseback to their Hindu homeland? Or witness Ashoka's conversion to Buddhism? Or experience Akbar's ecumenical Islam?
   
   If the metaphor of palimpsest hides more than it illuminates, is India instead a pentimento? Is it like those layered canvases where earlier images show through as the top layer of the painting becomes transparent with age? Simply put, is India's post-Independence democracy vanishing into some imagined Hindutva past? Isn't this what the Hindu fundamentalists rally around when they wave their saffron flags and their Shiva-inspired tridents? India as pentimento has Bal Thackeray, the Shiv Sena supremo, menacing minorities with dreams of a "Hindustan of Hindus" that would bring "Islam in this country down to its knees."
   
   Luce rejects Thackeray's sectarian vision. A scan of his chapter titles suggests that modern India is an aggregation of its diverse, multi-layered past: "Global and Medieval," "The Burra Sahibs," "Battles of the Righteous," "Long Live the Sycophants," "Many Crescents," and "A Triangular Dance." The most forceful argument for the past living in the present is made in the penultimate chapter--"New India, Old India: The Many-Layered Character of Indian Modernity." This is the only chapter where the now commonplace observations of call centers and software sectors are discussed. However, they are presented in the context of the book's overall premise that India is a wonder because of her many religions, her dozen-plus languages, her thousands of dialects which merge as a kind of dialectic within and between cities and villages. Echoing V.S. Naipaul's prescient observation that India has a "million mutinies now," Luce forcefully raises the palimpsest argument for pluralism.
   
   But as hinted at in the book's title and discussed in detail in a chapter titled "The Imaginary Horse: The Continuing Threat of Hindu Nationalism," Luce is anxious that the pentimento theory is gaining currency. He takes issue with powerful Hindu politicians who seek to maintain the centuries-old status quo and remain in control by manipulating the illiterate masses (quite often low-caste Hindus or Muslims). Luce supports his arguments with a mix of meticulous journalistic reporting, personal anecdote, and reference to well-accepted (at least in the West) scholarship.
   
   The closing chapter illustrates how this book of advocacy journalism works. Luce, who is a reporter for the Financial Times, is unabashedly a future-oriented Indophile; he makes clear that he would like to see India's trajectory toward superpower status continue. He asserts that if India is to achieve this desired state, the following four constraints must be overcome: (1) 300 million impoverished citizens, (2) environmental degradation, (3) HIV-AIDS epidemic, and (4) challenges to liberal democracy.
   
   Luce's recommendations to overcome these problems are specific and helpful, if at times a bit overbearing. He does not mince words. At first the prescriptive approach is refreshingly candid and concrete. But page after page of statistically supported prescription begins to take on the feel of a hectoring doctor who doesn't appreciate that the patient is in control of her own destiny. Those in the Indian government (and especially those members of the BJP party out of government) might consider In Spite of the Gods a harangue. Indeed, Luce repeatedly compares India unfavorably to China, repeating the following mantra: "The problem is neither money nor technology. It is about the inefficiency of government .... Corruption is the only possible explanation ..."
   
   The harangue is spiced with pithy quotes: "In Africa poverty is a tragedy, in India it is a scandal;" "It is time for India's VIPs to follow the people who get no pay for no work;" "India never misses an opportunity to miss an opportunity;" "The 21st century is India's to lose."
   
   But just as the reader tires of the smart statistics and the smart-aleck quotes, Luce delivers a brilliantly personal closing story. He relates a night journey in the first-class cabin of an Indian train. One of his fellow passengers is a 10-year-old Sikh boy who cheerfully and sleeplessly implores Luce, "Tell me some interesting things." This is a good frame of mind for all of Luce's readers-cum-companions on his journey through modern India. He does tell us some interesting things. In Spite of the Gods stirs the reader out of sleepy indifference about the dreams and nightmares of the palimpsest that is India--living at once in the past, present, and future.



5. One of the books about India that I've really enjoyed reading is Edward Luce's "In Spite of the Gods: The Rise of Modern India." One point Luce, a foreign correspondent in India for the Financial Times, makes very clear is that India has bypassed the industrial revolution by advancing directly from an agriculture economy to technology.
   
   Luce also correctly points out that one of India's greatest challenges is that it is governed by a multi-party coalition which breeds both inefficiency and corruption. Luce does a good job of telling you where India is today and how it got there but he does not choose to speculate on India's future.
   
   Luce's contribution is a holistic view of India that is insightful, well informed, and investigative. In this volume the reader gets a good look at India's untapped potential and what India needs to do to insure its future growth.
   
   And Luce, an Oxford scholar, makes the argument that it is in America's interest to promote better ties with India as a way of counterbalancing China's emerging dominance in the global economy. Luce stresses, even if change continues to move at its current slow pace, India still will become an extremely important player in the 21st Century -- in spite of the gods!
   
   By Gunjan Bagla
   Author of Doing Business in 21st Century India

5 comments about Development, Geography, and Economic Theory (Ohlin Lectures).

1. Trade theory and economic geography are two subjects that are as interesting as they are tough to lay out. This book would probably be an utter disaster in anyone but Krugman's hands. This book is not really for anyone unfamiliar with economics, but the majority of it could probably by understood by a reasonably bright high school student with some familiarity in the area. Krugman has a breezy style which runs over all the intriging upshots without becoming bogged down in fetishistic details. Admirably his clear rhetoric is supplemented by by many examples, analogies and "intuition pumps."

   As far as an introduction to geography and trade go, it is less than thorough, but these are mostly props for Professor Krugman's views on economic theory, which are sensible and unpretentious. He deflates and delineates the worse practices of his profession without resulting to the stock complaints (i.e. that Economists generally think they are physicists -- nonsense!). A good quick book on how to do economics.




2. This is an excellent critique of high development theory. Although good economists will know the main faults of their disapline, this text elegantly explains why development theory lost its direction. I will not divulge the main ideas, they are well worth the money to find out. - Economists consist of two groups, those that don't know, and those who don't know that they don't know.



3. It's a wonderful little piece, but a teeny little book for $40 bucks?! What's more, most of contents are/were actualy available at Krugman's own web site. Someone's sure making a lot of unearned money here off..... If money were no object, though, I'd surely rate this book much higher.



4. Paul Krugman is one of the few economists at home both in `high theory' and in public economic discourse. He thinks deeply, and he thinks brilliant thoughts. This little book - based on the Olin Lectures he gave in Stockholm - is proof of what his mind can yield, when it sets out to clarify issues.

   Development and economic geography, he argues, failed because they did not submit themselves to the discipline of model-building - what might look or even be at first sight downright silly in the end is preferable to the unconscious metaphors of the narrative economic discourse.

   For all its clarity, Krugman's argument is deeply flawed. Development and economic geography - together with income distribution - belong to the derelict class of economic problems that addresses the question of historical disparities of wealth in the economic tissue. Why have some countries or regions developed and others have staid behind, why are there poor and rich? Was it done by better use of the available resources, or by impoverishment of other nations or persons? A corollary to this question would be: does our quest for efficiency worsen or reduce disparities? Both Adam Smith and Karl Marx addressed this question, but their observations have been largely forgotten. Pareto and welfare economics picked up the thread, only to conclude platidinuously that the only `good' policies are those that benefit all.

   Should the model-building solutions that Krugman suggests be used in development and geography be any good, they might imply that a `big push' applies not just to economic growth, but also to concentration of income - consumer surplus playing the role of `economies of scale'. Interesting. Just as interesting as the metaphor that - as in the `big bang' theory of star formation - the smallest of initial income irregularities (e.g. first predatory capital accumulation) lead to the agglutination of wealth around capitalists. Which, of course, also implies that it is the 90% of dark (workers) matter that keeps the shiny capitalist `stars' in place in a well-ordered and expanding economy.

   Toys are useful provided they teach a child the `real thing'. Toy models are not useful when they fail to recognise (let alone address) fundamental issues like that of economic disparity. Models are downright bad when their incautious use leads to blind-sighting in economic policy. Every economist should be made to ponder Kenneth Arrow's Theory of Second Best. Partial optima are bad solutions in the search for an overall optimum.
   Can we expect models of income disparity soon? Paul Krugman might devote some of his intellectual powers to construct the simplest of models of income disparity and attempt to integrate it into a growth model - just to disprove (or prove) the widespread intuition that when governments pursue efficiency single-mindedly, the rich get rich and the poor poorer.

   Can we further expect a `grand unified theory of everything economic' that would bring together both concerns of efficiency and income distribution into a unified model for development? Don't hold your breath. As Koopmans famously proved, one cannot kill two birds with one stone. Until then, however, efficiency models should either be denied the Warrant Of Fitness for circulation in political circles, and/or carry the label: Efficiency may be harmful to income distribution.




5. Summarizing this book as '"The Self-Organizing Economy", only a bit more technical, filled with more citations to other economists, more navel-gazey, slightly more philosophical and with less of a focus on complex systems' gets you at least 95% of what you need when deciding whether to read this book. As the next step after "The Self-Organizing Economy", it leaves something to be desired: it overlaps too much to be really satisfying. In fact I think Krugman cut and pasted a lot from "Development, Geography, and Economic Theory" into "The Self-Organizing Economy", including particular graphs and particular lines (e.g., one about his love of "Micromotives and Macrobehavior", and Gertrude Stein's quote about L.A. that "there's no there there"). Which is fine: these are good ideas, and they deserve to be explored in some depth.
   
   In "The Self-Organizing Economy", Krugman explained why he thought that economic geography had died out sometime in the 1960's. Partly, he said, it was that the discipline lacked "microfoundations": it didn't explain high-level behaviors (in this case the existence of cities) from the unguided actions of individual economic actors. Instead it took the existence of cities as given, then derived conclusions about where people and businesses would locate. "The Self-Organizing Economy" painted some cute little models to try to build these microfoundations. Widely dispersed populations turned out in that book to be an unstable equilibrium: we get the microfoundations by assuming a "state of nature" in which everyone is spread out, then show that the state doesn't last. Krugman actually comes to a stronger conclusion from his toy model: cities end up being evenly spaced around the circular landscape. Any closer together and they start eating into each other's markets. Any further apart and they lose the benefits of closeness to customers and suppliers. This unifies a number of traditions in economics that have tried, over the years, to explain why cities exist in the shapes and sizes they do.
   
   "Development" assumes more economic knowledge than did "The Self-Organized Economy", though I could fumble along and get most of what he was saying. Understanding why cities concentrate at all, says Krugman, inevitably means understanding increasing returns to scale. My intuition is ill-formed here at the moment, but I think the idea is that with constant returns to scale, doubling the number of employees in a given factory only doubles your output -- so there's no reason to prefer one large factory to two small ones at two different locations.
   
   Hence understanding cities at all means understanding increasing returns to scale. But, says Krugman, increasing returns to scale is precisely what neoclassical economics doesn't know how to handle. My intuition here is even hazier. Krugman refers a few times to "unexploited economies of scale" causing problems for neoclassical economists, which suggests to me that there's some kind of arbitrage principle at work: in a perfectly competitive economy, the theory probably says somehow that factories would eventually scale up to the point that they're working in a constant-returns regime. Again, my intuition on this is hazy, but that's what the context of Krugman's writing suggests.
   
   So if you're going to model city development, you need to model increasing returns. And if you're going to model increasing returns, you can't be talking about a perfectly competitive market. Apparently you're forced into a monopolistic competition model. These are just the sort of models that economics has always had a hard time understanding, says Krugman.
   
   Krugman spends a good fraction of the book explaining this economic issue, so in a lot of ways "Development" turns into meta-economics: a study of why economics as a discipline behaves the way it does. Economics, says Krugman, ignored city development for so long because it didn't know how to model it; a certain standard of rigor has prevailed in economics since the 1960's, such that anyone who had nice ideas in prose but couldn't express them in mathematics was the proud owner of a dead letter.
   
   So "Development, Geography and Economic Theory" is three things: a collection of toy models, a unification and deepening of some earlier work in economic geography, and a meditation on the value of those very models.

4 comments about The Anti-Politics Machine: "Development," Depoliticization, and Bureaucratic Power in Lesotho.

1. Ferguson's study of development projects in Lesotho brings a much needed dose of reality to the subject of modernization and aid. While others might stress the need for appropriate technology or bog the reader down in economic formulae, Ferguson examines the ways in which local and global politics influence the success of even the most carefully planned and well-meaning of projects. A must-read for anyone interested in the development business.



2. I was referred to this book by my lecturer in applied athropology. Reading it caused me to rethink and rewrite my assignment. Fergusson can be a bit irritating but he certainly has researched his field well and shows a great insight into the politics of foreign aid and economic development in the 3rd World.



3. The book is in excellent condition and the delivery time was quite brief. Great service and great product!



4. Ferguson's book is a powerful analysis of the epistemological bottlenecks that plague development policy and the World Bank's approach in Africa. World Bank's economists usually put a discount upon rigorous social research requirements in the way they explain cause-effect relationships of the African economic deficits. With commanding persuasive force Ferguson shows how the peculiarities of the African context are dissolved in a (anti-contextual) cut-and-ready, illogical analytical framework, rendered 'logical' to best accommodate World Bank's internal bureaucratic rationality. One should not wonder why the policies born out of such an 'Anti-Politics Machine' by and large remain in de-phase with the very notion of development.
   
   By
   Cyril FEGUE

3 comments about Encountering Development.

1. Arturo Escobar critics the whole concept of development in theory and practice from an extremely unusual and original perspective. He steps back and views development as something exotic and almost non-sense. Inspired on the work of Foucault, the author examines the evolution of the discourse about development as a form of how the West keeps exerting power and influence on the Third World. The ethnocentric views of development and interventions that come with them - propagated by Western governments, multinational companies, development institutions and academia - puts Third World cultures and traditional populations as something that should be significantly changed to achieve the so-dreamed "development." Although the results of these western-driven interventions over decades have usually been catastrophic for Third World's populations and cultures, Western "experts" keep coming to the Third World and elaborating new forms of discourses on development, now addressing objects like sustainable development, women and development and poverty erradication - all ethnocentric and based on western values. This book should be read by anyone who wants to reunderstand development in the Third World (and reflect if it is needed at all!).



2. Arturo Escobar critics the whole concept of development in theory and practice from an extremely unusual and original perspective. He steps back and views development as something exotic and almost non-sense. Inspired on the work of Foucault, the author examines the evolution of the discourse about development as a form of how the West keeps exerting power and influence on the Third World. The ethnocentric views of development and interventions that come with them - propagated by Western governments, multinational companies, development institutions and academia - puts Third World cultures and traditional populations as something that should be significantly changed to achieve the so-dreamed "development." Although the results of these western-driven interventions over decades have usually been catastrophic for Third World's populations and cultures, Western "experts" keep coming to the Third World and elaborating new forms of discourses on development, now addressing objects like sustainable development, women and development and poverty erradication - all ethnocentric and based on western values. This book should be read by anyone who wants to reunderstand development in the Third World (and reflect if it is needed at all!).



3. This is a tract, not a thoughtful piece of scholarship. It is in the Latin American school of angry social science, but is little informed by fact. Much of what it says is correct, but is also well known. But the analysis is weak, based on incorrect or outdated data, and simply a regurgitation of stereotypes instead of a deductive grounded analysis based upon good ethnographic work. It is therefore often simply wrong. But anger sells books.....