False Economy
A Surprising Economic History of the World
By: Alan Beattie
Published: April 28, 2009
Format: Hardcover, 304 pages
ISBN 9780670068593
Publisher: Viking Canada/Penguin
"Countries have choices, and those choices have substantially determined whether they succeeded or failed", writes economist and economics writer Alan Beattie, in his important and insightful book False Economy: A Surprising Economic History of the World. The author provides a devastating critique of the many myths that have grown up regarding why some countries got rich and others got poor. Alan Beattie demonstrates that clear choices, made by a country's government and elites, can set a course for the nation either toward national wealth or to crippling poverty.
Alan Beattie does not believe that geography, natural resources, or religion predestine a country's future wealth or poverty. The author describes examples of resource rich countries achieving prosperity for its citizens, while other countries with similar resources, fall into political and economic chaos. Religion or national origin do not predict the success of a national economy either, despite well known and widely believed theories as to their crucial importance. Alan Beattie supports freer trade between nations, but at the same time recognizes the shortcomings of globalization and the many current international trade policies. The book is not one based on ideology, but rather on the reality that national governments make policy decisions, and very often those decisions are disastrous for a nation's economy.
Alan Beattie (photo left) provides powerful historical background to his concept that people today face a false economy of economic ideas. What is often thought and understood about national and global economics is very often wrong. At the same time, the reasons why many long held economic theories are incorrect, differ with each country, and at various times in history.
The most powerful example of different choices by government, presented in the book, is the comparison of Argentina and the United States. In 1900, both countries were seen as future economic powerhouses with unlimited opportunities for future growth. Alan Beattie describes that superficial analysis as missing the deeper nature of the two economies. While the United States went on to become the leading economy in the world, Argentina slipped back into isolation and became an economic backwater status. Both countries were changed forever by the economic choices made by their respective governments.
For me, the power of the book is the depth of economic analysis, both contemporary and historical provided by the author. The examples of successful and disastrous national economic policies provided, build the book's case and destroy the usual myths surrounding economic development. Alan Beattie recognizes the importance of comparative advantage in the global economy, but he also points out that various national trade and tariff policies will often work against those natural advantages. Instead, a misguided choice by government can even harm a country's own advantage in other areas. While the author points out the importance of globalization, he doesn't see it as unstoppable, or always destined to grow in the future. Different choices can change the course of global trade and economics leading to an entirely different future, to the benefit of some nations, and harm to the economies of others.
I highly recommend the important and must read book False Economy: A Surprising Economic History of the World by Alan Beattie, to anyone seeking a deeper and more clear understanding of the real reasons why some countries become powerful economically, while others become bywords for national poverty. The author makes a strong case that there was never a certainty that countries who are wealthy, middle income, or poor were predestined to end up that way. Indeed, the crux of the book is that governments have many choices, and it's critical that they make the right ones.
Read the essential analysis of economic development in False Economy: A Surprising Economic History of the World by Alan Beattie, and learn the real reasons why countries develop as they do, and why nations of the past developed as they did and why some were successful and some were dramatic failures. The author provides hope that current governments, if given the right information and can be kept from steering down the wrong path, can help their countries and their people improve economically.
Alan Beattie also provides both contemporary and historical examples of how even some seemingly well meaning policy decisions set their nations on the road to poverty. By keeping vigilant of government policy, and understanding the true causes of wealth and poverty, perhaps more countries can become stronger economies to the benefit of everyone.
