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Money, Blood and Revolution: How Darwin and the doctor of King Charles I could turn economics into a science

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Economics is a broken science, living in a kind of Alice in Wonderland state believing in multiple, inconsistent, things at the same time. Prior to the financial crisis, mainstream economics argued simultaneously for small government on taxation, regulation and spending, but big government on monetary policy. After the financial crisis, economics is now arguing for more go Economics is a broken science, living in a kind of Alice in Wonderland state believing in multiple, inconsistent, things at the same time. Prior to the financial crisis, mainstream economics argued simultaneously for small government on taxation, regulation and spending, but big government on monetary policy. After the financial crisis, economics is now arguing for more government spending and for less government spending. The premise of this book is that the internal inconsistencies between economic theories - the apparently unresolvable debates between leading economists and the incoherent policies of our governments - are symptomatic of economics being in a crisis. Specifically, in a scientific crisis. The good news is that, thanks to the work of scientist and philosopher Thomas Kuhn, we know what needs to be done to fix a scientific crisis. Moreover, there are two scientists in particular whose ideas could show how to do this for economics: Charles Darwin, the man who discovered evolution, and William Harvey, doctor to King Charles I and the first man to understand blood flow and the workings of the human heart. In Money, Blood and Revolution, bestselling financial writer George Cooper explains how the ideas of Darwin and Harvey could revolutionise economics, making it more scientific and understandable, and might even reveal the true origin of economic growth and inequality. Taking readers on a gripping tour of scientific revolution, social upheaval and the secrets of money and debt, this is an unmissable read for anyone curious to understand how the world really works - and the amazing future of economics. #autoshambles


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Economics is a broken science, living in a kind of Alice in Wonderland state believing in multiple, inconsistent, things at the same time. Prior to the financial crisis, mainstream economics argued simultaneously for small government on taxation, regulation and spending, but big government on monetary policy. After the financial crisis, economics is now arguing for more go Economics is a broken science, living in a kind of Alice in Wonderland state believing in multiple, inconsistent, things at the same time. Prior to the financial crisis, mainstream economics argued simultaneously for small government on taxation, regulation and spending, but big government on monetary policy. After the financial crisis, economics is now arguing for more government spending and for less government spending. The premise of this book is that the internal inconsistencies between economic theories - the apparently unresolvable debates between leading economists and the incoherent policies of our governments - are symptomatic of economics being in a crisis. Specifically, in a scientific crisis. The good news is that, thanks to the work of scientist and philosopher Thomas Kuhn, we know what needs to be done to fix a scientific crisis. Moreover, there are two scientists in particular whose ideas could show how to do this for economics: Charles Darwin, the man who discovered evolution, and William Harvey, doctor to King Charles I and the first man to understand blood flow and the workings of the human heart. In Money, Blood and Revolution, bestselling financial writer George Cooper explains how the ideas of Darwin and Harvey could revolutionise economics, making it more scientific and understandable, and might even reveal the true origin of economic growth and inequality. Taking readers on a gripping tour of scientific revolution, social upheaval and the secrets of money and debt, this is an unmissable read for anyone curious to understand how the world really works - and the amazing future of economics. #autoshambles

30 review for Money, Blood and Revolution: How Darwin and the doctor of King Charles I could turn economics into a science

  1. 5 out of 5

    John

    As economies have stagnated since the crash of 2008, economists have bickered over diagnoses and prescriptions. This council of confusion has dented economics’ claim to be a wertfrei science; after all, astronomers no longer argue over whether the earth orbits the sun, that argument was settled in favour of the heliocentric model centuries ago. Current economic debates, by contrast, seem little advanced from Keynes and Hayek in the 1930s, or the argument over gluts between Malthus on the one han As economies have stagnated since the crash of 2008, economists have bickered over diagnoses and prescriptions. This council of confusion has dented economics’ claim to be a wertfrei science; after all, astronomers no longer argue over whether the earth orbits the sun, that argument was settled in favour of the heliocentric model centuries ago. Current economic debates, by contrast, seem little advanced from Keynes and Hayek in the 1930s, or the argument over gluts between Malthus on the one hand, and Ricardo and Say on the other, a century before that. According to fund manager George Cooper in his new book Money, Blood and Revolution, this is a result of economics being in the ‘crisis’ period of a Kuhnian scientific revolution. The past few years have confronted the dominant ‘neoclassical’ paradigm with a series of observations it is increasingly unable to accommodate, and the search is on for the new paradigm. There is nothing new in applying Kuhn's apparatus to economics. It is a fruitful approach; Peter Hall used it to investigate the shift in British economic policymaking from Keynesianism to monetarism, and Murray Rothbard used it to explore the history of economics more generally. But it is not clear how much of this confusion rests with Cooper himself rather than the discipline of economics. In his review of the contending schools Cooper admits that he cannot but give his ‘own personal definitions’ of each school and acknowledges that ‘almost every reader will disagree with some elements of how I have characterised, or perhaps caricatured, each school’ (p. 83). True, but Cooper says that the Austrian School ‘makes no effort to integrate government into its core paradigm’ (p. 91). This of a school one of whose founders produced works titled Nation, State, and Economy, Critique of Interventionism, Omnipotent Government, and Bureaucracy, and one of whose great expositions is titled Man, Economy, and State. Saying that the Austrian School ‘makes no effort to integrate government into its core paradigm’ is not a characterisation or caricature; it is wrong. Cooper might be unaware of these efforts, but that does not mean they have not been made. Other schools fare little better. Adam Smith's famous observation that ‘People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public, or in some contrivance to raise prices’ is presented as the same thing as Marxism’s belief in capitalism’s ‘tendency towards monopoly’. This is logically wrong; if there is a monopoly there aren’t different people of the same trade to meet and conspire; conversely, if there are people of the same trade to conspire there isn’t a monopoly. Out of this confusion Cooper conjures the statement that ‘capitalism does suffer an inherent tendency toward monopoly and wealth polarisation’ (p. 109). In 1900 the 12 largest US corporations were American Cotton Oil, American Steel, American Sugar Refining, Continental Tobacco, Federal Steel, General Electric, National Lead, Pacific Mail, People’s Gas, Tennessee Coal & Iron, US Leather, and US Rubber. Now consider that 98 years later just one of these corporations was still among the US top 12, namely General Electric, accompanied by General Motors,Walmart, Exxon, Ford, IBM, Citigroup, AT&T, Philip Morris, Boeing, Bank America, and SBC Communications. The giants of 1900 were swept aside, not by antitrust law but by the ‘creative destruction’ of the capitalist system. (Cooper erroneously applies Schumpeter's famous description of the entrepreneurial process to the liquidation phase in an Austrian business cycle.) The point on wealth polarisation demonstrates a myopia common in economic policy debate.While income inequality might have risen in recent decades within rich countries, globally, according to recent research from the World Bank’s Christoph Lakner and Branko Milanovic from the Luxembourg Income Study Center, inequality has fallen. Cooper is little more persuasive when he unveils his proposed new paradigm, supposedly derived from the work of William Harvey, physician to Charles I who first accurately described the circulatory system. There is, again, nothing new in taking economic inspiration from other sciences; Adam Smith and William Stanley Jevons both consciously aped the aims and techniques of contemporary physics, and Alfred Marshall made frequent reference to techniques of biology in his Principles, citing Darwin specifically. More recently, behavioural economists have adopted the tools of psychology. Cooper’s model is a pyramid with poor at the bottom and rich at the top, and government, somewhere outside, taking money from the rich and giving it to the poor. The neoclassical paradigm, which utilises monetary policy and increased debt to manage economies, has allegedly failed because that debt is typically taken on by poorer households, and the repayments flow up to the rich. This has reached saturation point and widened inequality, Cooper argues. Recent attempts to repeat this manoeuvre have seen central banks stuff the commercial banks (which in Cooper’s model are simply the pockets of the rich) with cash, which they have held on to. Much more effective as stimulus, Cooper suggests, would be to hand the money to the poor, who will spend it. But again, there is nothing new here; it is simply Keynes’s notion of differing marginal propensities to consume in a relabelled circular flow model. Neither is there any discussion of the reason the banks might have sat on their cash infusion, such as a desire, quite reasonable given recent events, to hold greater reserves against their assets. Fresh ways of looking at economics are to be welcomed, as Cooper rightly says, now more than ever. But this book is not introducing new insights from fresh perspectives; it is simply serving up standard, textbook Keynesianism arrived at via a more circuitous path than usual. That might be perfectly fine, but the case for Keynesian policies has been made better and more economically elsewhere. This book charts not so much an untrodden path to a new paradigm, but a well-worn scenic route back to an old one.

  2. 5 out of 5

    Athan Tolis

    In a paradigm shift inspired by Thomas Kuhn, author George Cooper, sorry, Dr George Cooper of Goldman Sachs, Deutsche Bank, JP Morgan and BlueCrest follows in the steps of Copernicus, William Harvey, Darwin and Wegener, but sadly not Einstein, to look at the hitherto confused science of Economics through the prism of evolution and strikes gold: "The paradigm shift I have suggested involves thinking of economic growth as being generated by a circulatory flow of wealth through society. In this mode In a paradigm shift inspired by Thomas Kuhn, author George Cooper, sorry, Dr George Cooper of Goldman Sachs, Deutsche Bank, JP Morgan and BlueCrest follows in the steps of Copernicus, William Harvey, Darwin and Wegener, but sadly not Einstein, to look at the hitherto confused science of Economics through the prism of evolution and strikes gold: "The paradigm shift I have suggested involves thinking of economic growth as being generated by a circulatory flow of wealth through society. In this model, wealth is moved up through the social pyramid by the activity of the private sector and is then recirculated back downward via the activity of the state sector. Viewed in this way, it becomes possible to reconcile the apparently conflicting agendas of the state and private sectors. The state and private sectors are indeed antagonistic to one another but it is a creative antagonism and this antagonism is necessary to power the hedonic treadmill which, in turn, is responsible for generating economic growth. Like the biceps and the triceps, neither the state nor the private sector can operate usefully without being both in balance and in opposition with one another." What are the policy recommendations of this theory? Well, let's see. We need to get rid of student debt. And the state needs to borrow more and invest in infrastructure because it will earn a higher return on the infrastructure than it costs to borrow. So I'm thinking perhaps Larry Summers invented this author, since he cannot possibly get that article published a fifth time in the FT, can he? Richard Koo might have his hand in it too. Don't know. But on further reflection, I think I recognize the true author. It's most evidently Stanley Kubrik. Here's something he wrote earlier: General Jack D. Ripper: Mandrake, do you recall what Clemenceau once said about war? Group Capt. Lionel Mandrake: No, I don't think I do, sir, no. General Jack D. Ripper: He said war was too important to be left to the generals. When he said that, 50 years ago, he might have been right. But today, war is too important to be left to politicians. They have neither the time, the training, nor the inclination for strategic thought. I can no longer sit back and allow Communist infiltration, Communist indoctrination, Communist subversion and the international Communist conspiracy to sap and impurify all of our precious bodily fluids. Or perhaps it was Forrest Gump. I'm not sure, to be honest. ----------------------------------------------------------- August 15, 2014: I've had to dock this book a star because I've just read the entire argument about what's wrong with economics, much better put, and with pretty much the same examples (including the "epicycles" of Ptolemaic astronomers!) in Mancur Olson's "Rise and Decline of Nations" which was published in 1982. Not citing one's sources tsk tsk tsk. Look at page 190 of Olson's book for those epicycles, btw.

  3. 5 out of 5

    Bilal Hafeez

    Another great book by George Cooper. He has a knack of approaching familiar economics problems from a completely new angle. This time he goes through scientific paradigmatic changes and applies this to economics. He argues that current thinking in Economics is stuck in a rut of everyone seeing what they want to see. Instead, he introduces a new "circular" way of looking at economies that houses all economic schools of thoughts. This allows one to see the effects of different policy choices on th Another great book by George Cooper. He has a knack of approaching familiar economics problems from a completely new angle. This time he goes through scientific paradigmatic changes and applies this to economics. He argues that current thinking in Economics is stuck in a rut of everyone seeing what they want to see. Instead, he introduces a new "circular" way of looking at economies that houses all economic schools of thoughts. This allows one to see the effects of different policy choices on the economic pyramid. Well worth reading

  4. 5 out of 5

    M.R. Raghu

    A good book for economic students to understand neo classical economics and Keynesian economics. A practical book on how economic theories are struggling to go mainstream. What i like about this book is that it offers some solution to the problem as well. Overall, a useful book.

  5. 4 out of 5

    Sim Eu Jin

    Required reading for central bankers and politicians Succinct and more relevant today. We can only hope that central banks and governments are onto these ideas for us.

  6. 5 out of 5

    Nick

    I have slightly mixed feelings about this book. In parts I think it is excellent. As a scientist by background who also sold his soul to the devil and worked in investment banking and hedge funds, I completely agree with the overall tone. Economics is so far from being a science it is laughable. The many economics graduates I used to work with were so utterly unaware of the limitations, flawed axioms and erroneous conclusions that it was, frankly, scary. We all know how their lack of critical th I have slightly mixed feelings about this book. In parts I think it is excellent. As a scientist by background who also sold his soul to the devil and worked in investment banking and hedge funds, I completely agree with the overall tone. Economics is so far from being a science it is laughable. The many economics graduates I used to work with were so utterly unaware of the limitations, flawed axioms and erroneous conclusions that it was, frankly, scary. We all know how their lack of critical thinking and questioning affected the global financial markets. In many ways this is a book that mirrors the many discussions (arguments) I have had down the years. The expose of the weaknesses in the thoughts of the leading economic camps is much needed. The way that science often progresses with lateral jumps, new thinking based on existing evidence is probably less well known by readers without a science background, but I also enjoyed those chapters. The part I found less convincing was around the causal relationship between democracy, capitalism and economic growth in the 18th century. Did we get growth because of democracy? Was it the rule of law, (property rights)? My very strong suspicion is that it was science, and that the timing is more or less coincidental - but that coincidence can lead to difficulties in untangling the causality. Pumps to remove water from mines, better steam engines by Watt, then the revolution in textiles. Trains, hence communication. These changes greatly affected the way that business could work. Was science a beneficiary of the other changes at that time (democracy)? Possibly, very hard to say. I'm not making any grand claims here, and certainly can't substantiate any of this but I do think that the rapid expansion in GDP was mainly due to scientific and engineering progress. Moving to the application of the ideas of Darwin et al to the economy. I did like this part, but did feel that some of the analogies were slightly stretched. The work on behavioural economics, the crossover between psychology and economic theory is fascinating but I'm not sure that trying to draw comparisons with the flow of blood around the body aids our understanding. It was engaging, I raced through in in two days. Interesting but not wholeheartedly convincing. We certainly need more original thinkers and sceptics involved in the City.

  7. 5 out of 5

    Federico Carballo

    Interesting book, very original. Reviews the state of the science of economics and compares it to other sciences, like astronomy, biology, physics, etc. Good points, interesting comparison, but a bit shallow. The strong part of the book is when he describes the different schools of thought and how they differ, and where they fail. For me that was the most rewarding part. Finally it look at how the different schools failed to predict all major crisis, come up with its own model which is very inte Interesting book, very original. Reviews the state of the science of economics and compares it to other sciences, like astronomy, biology, physics, etc. Good points, interesting comparison, but a bit shallow. The strong part of the book is when he describes the different schools of thought and how they differ, and where they fail. For me that was the most rewarding part. Finally it look at how the different schools failed to predict all major crisis, come up with its own model which is very interesting and original, and shows how the model will fit to explain the 2008 crisis. Worth reading.

  8. 4 out of 5

    Arjun

    Much to criticise but still without doubt one of the best books on the subject. I liked his approach very much and the book makes for insightful reading. Still, his understanding of quantitative easing is at best limited and he is a wee bit too US-centric for my liking. A couple of years down the road and I'm gonna read this book once again :-) Much to criticise but still without doubt one of the best books on the subject. I liked his approach very much and the book makes for insightful reading. Still, his understanding of quantitative easing is at best limited and he is a wee bit too US-centric for my liking. A couple of years down the road and I'm gonna read this book once again :-)

  9. 5 out of 5

    Kevin

    Money Blood and Revolution by George Cooper summarised here: http://greatesthitsblog.com/money-blo... Money Blood and Revolution by George Cooper summarised here: http://greatesthitsblog.com/money-blo...

  10. 4 out of 5

    Horst Walther

    An excellent writing - and the author might be even right.

  11. 4 out of 5

    Cat

    interesting ideas well presented

  12. 4 out of 5

    Mike Scialom

    Please read my review at http://georgecooper.org/ Please read my review at http://georgecooper.org/

  13. 5 out of 5

    Nick

  14. 5 out of 5

    Jeff Brown

  15. 5 out of 5

    Kirsten

  16. 5 out of 5

    Asnanda Wardono

  17. 4 out of 5

    Terence J

  18. 4 out of 5

    William Quinn

  19. 5 out of 5

    YT

  20. 5 out of 5

    John Crary

  21. 4 out of 5

    Will

  22. 4 out of 5

    Ridham

  23. 4 out of 5

    Kris Muylaert

  24. 4 out of 5

    Victoria Friend

  25. 5 out of 5

    Isabelle Crosby

  26. 5 out of 5

    Hamilton Carvalho

  27. 5 out of 5

    Rogelio Serrano

  28. 5 out of 5

    Chr

  29. 4 out of 5

    Eduardo Daniel

  30. 4 out of 5

    Dj Southlove

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