WITH ASIAN FINANCIAL MARKETS IN RUINS AND WALL STREET SPUTTERING, WE ASKED NINE EXPERTS TO RECOMMEND RECENT BOOKS THAT MAKE THE MOST SENSE OF ECONOMIC DISASTERS AND DYSPHORIA..

Richard Parker, senior fellow at Harvard University’s Kennedy School of Government and author of MIXED SIGNALS: THE PROSPECTS FOR GLOBAL TELEVISION NEWS (Twentieth Century Fund, 1995).

"Jeffrey Sachs’s recent confession in The Economist that global markets operate with neither the foresight nor the wisdom he once attributed to them reminds us why he should have paid closer attention to two of his greatest Harvard teachers. John Kenneth Galbraith’s recently reprinted classic GREAT CRASH 1929(Houghton Mifflin, 1972) remains the first book one should read in order to understand our current global mess. No reader can fail to benefit from the verve of Galbraith’s narrative as he recalls the 1929 debacle and the insights it yields into modern market crises. For an erudite explanation of the global power of Euro-American capitalism, and the role of modern orthodox trade theory in market destabilization, David Landes’s WEALTH AND POVERTY OF NATIONS: WHY SOME ARE SO RICH AND SOME SO POOR (Norton, 1998) is unsurpassed. This tome will alarm multiculturalists: Landes thinks the West is uniquely productive, in the tradition of Weber’s ‘Protestant capitalism’ argument. Nonetheless, his book offers so many insights about economic development since the sixteenth century that it can’t be ignored."

Doug Henwood, editor of Left Business Observer and author of WALL STREET: HOW IT WORKS AND FOR WHOM (Verso, 1997).

"Russia’s experience over the last ten years counts as one of the greatest economic disasters of all time. Sure, Soviet life fell well short of Utopia, whether measured against socialist or consumerist ideals, but there was a certain degree of security, even comfort. Now the population is shrinking and there’s fear of starvation this winter. What happened? Standard explanations blame the legacy of the Soviet economic system itself, but economist David Kotz and journalist Fred Weir show in REVOLUTION FROM ABOVE; THE DEMISE OF THE SOVIET SYSTEM(Routledge, 1997) that recent developments were planned by the party-state elite. Unlike Gorbachev, who apparently wanted to democratize Soviet socialism, the nomenklatura feared that doing so would threaten their privilege and power. They opted instead for a singularly brutal, unproductive form of capitalism. One can fault the authors for paying insufficient attention to international developments–the Reagan military buildup, for example–but their book makes its central point so well that I won’t complain."

James Surowiecki, a business columnist for New York magazine who writes the Moneybox column for Slate.

"There’s no place for economic disasters in traditional neoclassical economic theory, with its assumptions about the efficiency of markets and the rationality of investors. Yet bubbles and busts are perennial features of capitalist societies. In recent years, economists have started to think about these phenomena as more than just inexplicable aberrations, in no small part thanks to Charles Kindleberger, whose MANIAS, PANICS AND CRASHES: A HISTORY OF FINANCIAL CRISES , 3rd ed. (Wiley, 1996) remains the most comprehensive and rigorous look at the long history of financial hysteria. Kindleberger’s reflections on the importance of a ‘lender of last resort’ seem especially relevant, considering the recent debate over the proper role of the IMF and the World Bank. From a different angle, Peter Bernstein’s AGAINST THE GODS; THE REMARKABLE STORY OF RISK (Wiley, 1996), a history of the concept of risk, provides invaluable–and entertaining–insight into exactly why investors act the way they do and how ‘rationality,’ at least in the short term, remains such an elusive goal."

Thomas E. Hall, professor of economics at Miami University of Ohio and co-author, with J. David Ferguson, of GREAT DEPRESSION: AN INTERNATIONAL DISASTER OF PERVERSE ECONOMIC POLICIES (Michigan, 1998).

"During this century, two decades stand out in terms of poor economic performance: the 1930s and the 1970s.

During the 1930s, most economies experienced severe recession and deflation. The somewhat different German experience–important because of its connection to the rise of Hitler–is chronicled in NAZI ECONOMIC RECOVERY, 1932-1938, 1932—1938 (Cambridge, 1996) by R.J. Overy. This short, readable book chronicles economic conditions that existed in Germany from World War I to the depression that started in 1929, and then examines the recovery that began in 1932. During the 1970s, disaster struck the United States in the form of high inflation, a severe recession, and then even higher inflation. Many people were responsible for these problems, but chief among them was Richard Nixon. NIXON'S ECONOMY; BOOMS, BUSTS, DOLLARS, AND VOTES (Kansas, 1998) by Allen Matusow is a fascinating examination of the role politics played in shaping the perverse economic policies of the Nixon administration."

Kim Phillips-Fein, a New York—based freelance journalist who has written about labor and economics for The Nation, The American Prospect, and The Baffler.

"Economic disasters are, by definition, abnormalities–even in capitalist economies, where financial crises, recessions, and depressions appear to be regular features of the economic system. So it’s worth remembering that for workers even boom times can feel a lot like a crisis. Consider Bill Bamberger and Cathy Davidson’s CLOSING; THE LIFE AND DEATH OF AN AMERICAN FACTORY (Doubletake, 1998), which examines the human costs of deindustrialization via a lushly photographed case study of the closing of a Southern furniture factory. Unfortunately, despite the unusual view it provides into the lives of working-class Americans, Closing’s maudlin approach to class conflict blunts its analytic edge. A much more compelling take on deindustrialization is Robert Fitch’s The Assassination of New York (Verso, 1993), which argues that a small group of wealthy real estate moguls were instrumental in pushing industry out of New York, profiting mightily from the continuing crisis of the postindustrial city."

Jeffrey Madrick, editor of Challenge and author of END OF AFFLUENCE; THE CAUSES AND CONSEQUENCES OF AMERICA'S ECONOMIC DILEMMA (Random House, 1997).

"Most books about modern business moguls either sensationalize their achievements or demonize their foibles. ‘See how they lied to their girlfriends,’ we are told with shock. This is unfortunate, since understanding economic disasters involves grasping the complexity of both systemic forces and individual players. There is one book, however, so rich in pertinent detail that it conveys a mogul’s conniving and complex personality more comprehensively than any profile of a contemporary businessman I’ve read. It’s Edward Jay Epstein’s DOSSIER: THE SECRET HISTORY OF ARMAND HAMMER (Random House, 1996). Hammer–oil magnate, takeover artist, cad–built Occidental Petroleum into one of the nation’s largest companies through bribery and lies. Then he nearly destroyed it with his vain Russian diplomacy and a string of bad deals. For Epstein, character is indeed plot. Rather than moralizing, he provides readers with the facts, many of them dug out of newly available Russian archives and FBI files."

Nelson Lichtenstein, professor of history at the University of Virginia and author of WALTER REUTHER; THE MOST DANGEROUS MAN IN DETROIT (Illinois, 1997).

"In both politics and scholarship, American liberals have too often separated the fate of the economy and the fight against racial discrimination into distinct conceptual boxes. Judith Stein demonstrates the tragedy of this approach in her sweeping, powerful study of the collapse of an industry central to both African-American employment and American prosperity. RUNNING STEEL, RUNNING AMERICA; RACE, ECONOMIC POLICY, AND THE DECLINE OF LIBERALISM (North Carolina, 1998) offers a penetrating critique of postwar Keynesianism, Cold War foreign policy, and judicially mandated affirmative action in heavy industry. Stein’s single-industry study is contextualized on a vast scale by Robert Brenner, whose book-length essay ‘The Economics of Global Turbulence’ makes up the entire issue of a recent New Left Review (May/June 1998). Brenner’s ambition is staggering: He compares profits, productivity, wages, growth, and trade policy in Japan, Germany, and the United States over the last fifty years."

Stanley Aronowitz, professor of sociology at the CUNY Graduate Center and author of FROM THE ASHES OF THE OLD; AMERICAN LABOR AND AMERICA'S FUTURE (Houghton Mifflin, 1998).

"In SECRETS OF THE TEMPLE: HOW THE FEDERAL RESERVE RUNS THE COUNTRY (Simon & Schuster, 1987), William Greider, heir to the turn-of-the-century populists who fought against hard money, argues that the Federal Reserve Bank’s policies have been ruinous to farmers, workers, and many in the salaried middle class. His carefully documented case violates the conventional wisdom that moderate inflation is bad for most of us. Greider blames the Fed’s deflationary moves–high interest rates and rigid control of the money supply–for the epidemic of personal bankruptcy among small farmers, the steep manufacturing layoffs of the 1980s, and the chronic wage stagnation that still plagues the American economy. For Greider, it’s a cabal of big bankers along with the Fed itself who benefit from deflation. He has not told the whole story and his conspiracy theory may grate on liberal sensibilities, but that doesn’t mean he’s wrong."

Paul Davidson, professor of political economy at the University of Tennessee at Knoxville and author of POST KEYNESIAN MACROECONOMIC THEORY : A FOUNDATION FOR SUCCESSFUL ECONOMIC POLICIES FOR THE TWENTY-FIRST CENTURY (Edward Elgar, 1994).

"Since 1973, the global economy has stumbled from one economic crisis to another: stagflation in the 1970s, Latin American debt problems in the 1980s, and global financial problems today. In each instance, financiers have turned to the World Bank and the IMF for help. Critics contend that these organizations, controlled by the U.S. Treasury, have only exacerbated problems. The final volume of Robert Skidelsky’s three-volume biography JOHN MAYNARD KEYNES, VOLUME TWO: THE ECONOMIST AS SAVIOR, 1920-1937 (Viking, forthcoming), offers a glimpse of what the global economy might have looked like without the World Bank and IMF. The book’s central drama unfolds at Bretton Woods, where Keynes, as head of the British delegation, clashed with the U.S. delegation over policies for controlling postwar international payments. The adoption of the American proposal for an IMF and World Bank over Keynes’s ‘bancor’ plan–which was not tied to any national currency–was a victory of political power over enlightened thought."