Luis Rubio

Holy Week is a good time to reflect on my recent readings. Here are some of those that made me think and change my points of view.

Conrad Black is a worldwide press magnate who ended up in jail in the U.S. In A Matter of Principle he offers an intelligent –and coarse- analysis of the accusations and sentence that he underwent with special emphasis on the U.S. penal system where, in the interest of accelerating processes, a person considered innocent very frequently has to accept being guilty of a lesser charge to avoid the punitive costs of a trial. The extraordinary value of the book lies in the way that it strips down the criminal system of that country, which is considered an example for the world. It’s one of those books that moreover leave one troubled.

Carlos Elizondo devotes With or Without Money to the dilemmas of government spending. He explains with an extraordinary clear mind the dynamics of spending, with particular emphasis on two criteria; what is government spending good for, and why it is not just a matter of raising more taxes. He dwells on the consequences of taxation, their impact on economic growth and the problem of a weak State that cannot even enforce the law. If you read only one book about Mexico or budgets and taxes this year, this should be it.

Luigi Zingales is a particular case. Professor of Finance at the University of Chicago, he has written a seminal book. In A Capitalism for the People, Zingales argues that capitalism was designed to benefit the citizen and the consumer, but that the growth of lobbyists and lawyers of special interests has ended up distorting everything: from taxes to spending, passing through businesses and the government’s favorite causes. Although the book refers to the U.S., the message could not be timelier: when opportunities for individual development, which are the essence of capitalism, stop being available because the playing field is not flat, capitalism stops being functional.

Anne Applebaum describes the way that the Soviet regime little by little placed the population of Eastern Europe in submission. At the beginning, the Russian Communists, believers in their system, supposed that Europeans who had been left under their yoke at the end of the war would join forces with Communism without a whimper. Although the process in each country was distinct, the State soon controlled all aspects of the economy, the police, the press and the State apparatus. For this author of Iron Curtain, the Soviet error resides in wanting to control everything: the schools, the social organizations, the unions, the churches. Thus, any conflict or difficulty translated into a source of illegitimacy for the system in its entirety. Repression became inevitable and, accompanying this, any pretension of democracy or popularity disappeared. The book is particularly interesting when one contrasts it with the PRIist system. Although hard-nosed, the PRI never came to dominate the whole society nor did it attempt to do so. That perhaps is one part of the explanation for their capacity of adaptation and survival.

The Dictator’s Handbook is a fascinating book devoted to explaining how a leader (in any activity or sector) will do whatever’s necessary to stay in power. Bruce Bueno de Mesquita and Alastair Smith pose critical questions such as why do leaders who wreck their countries keep their jobs for so long, or why do “natural disasters” disproportionately strike poorer nations? Their analysis concludes that a leader is leader because he is always dedicated to satisfying the coalition that maintains him or her in power.

The human being is, according to Aristotle, a “political animal”. Many would remark that in these recent years of crisis worldwide the former part has had dominion over the latter. In a great history about politics, On Politics: A History of Political Philosophy from Herodotus to the Present, Alan Ryan affirms that politics is fundamentally a philosophical matter and then goes on to elucidate towering questions such as the source of State authority over the citizens, individual rights and the order of the collective, and the limits of individuals as well as of the State. A good book written to think over matters of the here and now.

The most fascinating book that I read in this period is about a new industrial revolution. In Makers, Chris Anderson says that the next stage of industrial development will come in the conjunction of open design models that permit, via the Internet, the improvement of products, all from a desk. His argument is that the new revolution will be as important as that of personal computers and will change the entire concept of production because it will allow for flexibility and a capacity for adaptation to client and market needs that are inconceivable under the current manufacturing model. Employing three-dimensional printers and access to financing, the new revolution will espouse the rise of a new entrepreneurship based on micromanufacturing that will terminate the mass manufacturing monopoly, in the same way that the Internet did away with that of the traditional mass media.

Two contrasting books present the panorama of options facing Western countries. In When Markets Collide, Mohamed El-Erian addresses the collapse of the Western economies after the 2007 debt crises, the beginning of an era of “new normal” that, unless governments massively reduce their debts and deficits, will be distinct from what existed formerly, more like Japan’s last two decades, with paltry economic growth levels. For his part, in Capitalism 4.0, Anatole Kaletsky takes the opposite line: for this author the future is promising and a good combination of economic stimulus and governmental leadership could create a new era of generation of wealth. Both arguments are persuasive and whoever is right will determine what happens in the world economy for years to come.

In closing, Plutocrats, by Chrystia Freeland, is an interesting book because it explains a little understood phenomenon in recent years. Instead of focusing on the famous 1% of the richest people in the world, her focus is on the 1% of the 1%. For this author, the true phenomenon of our era resides in the concentration of new wealth above all deriving from the development of technology and in the financial sector. The book foresees difficult time of adaptation due to the imbalances that the new wealth generates as well as to the impact of these new wealth sources on the job markets.