July 08, 2003
Notes: Blanchard on Transition

Olivier Blanchard's view on the transition from communism to capitalism as of the mid-1990s. If I read his Economics of Post-Communist Transition right, the key problem was the absence of a Marshall Plan to keep demand high and employment high during transition. In the immediate aftermath of World War II in Western Europe, the Marshall Plan allowed countries to maintain high aggregate demand without worrying about balance-of-payments constraints. There was no similar inflow of hard currency in the early 1990s to allow transition governments to create the demand to rapidly reemploy those laid off from state industries. The Bush I Administration had, because of the Reagan deficits, "more will than wallet." As a result, Blanchard argues, high unemployment led to a fear of reallocation and restructuring, and the slowing of the entire process of reform down to a glacial pace. If only demand and employment could have been kept high during the initial stages of transition... And since the mid-1990s? Since Blanchard wrote his book, what has happened? If I read the data right, economic progress in Central Europe has been slow, in Eastern Europe has been very slow, and in the former Soviet Union (where there never was the...

Posted by DeLong at 03:28 PM

July 07, 2003
Books: Alan Furst: Dark Star

Alan Furst (1991), Dark Star (New York: Houghton Mifflin: 0006511317). When I talk to practically any of my undergraduates these days, I have a nearly impossible task to do when I try to convince them that the twentieth century has, after all, ended much better than it might have been. The half-full undergraduates talk of how wonderful and advanced our industrial civilization is, and how human progress to this point was nearly inevitable. The half-empty undergraduates talk about poverty in the developing world, inequality, and injustice, and seem deaf to the idea that the world we live in is much better than the world that we seemed headed for during the second quarter of this century. The Great Depression. Stalin's purges. World War II. Hitler's genocides--they have read about these, but they are not *real*, and the idea that for decades people thought that the forces headed by Stalin or by Hitler were the wave of the future (or the last chance to stop an even greater evil) does not penetrate below the surface. So the next time I teach a course on the entire politico-economic history of the twentieth century, I think I may assign Alan Furst's novel Dark...

Posted by DeLong at 09:49 PM

Better Futures that Might Have Been

There are many sad books on my bookshelf: books that whenever I open them cause tears to gather in the corner of my eyes, and cause my nose to sniffle. This is not because I am allergic to dust from old books (which I am), but because many old books seem to me to be markers of a better future that did not come to be. Of these, I think the saddest is an old, old book from 1911: Norman Angell's The Great Illusion: A Study of the Relation of Military Power in Nations to Their Economic and Social Advantage. Norman Angell's argument is simple: It is that in modern industrial warfare between great powers, everybody loses. Losers lose. And the winners lose. Many of their fathers, sons, and husbands are dead. Much of their wealth has been blown up. And it is next to impossible to claim that these sacrifices are counterbalanced by any positive economic advantages. Straightforward plunder of the conquered country yields little. Confiscation of property and the imposition of reparations burdens damages the rule of law on which modern industrial prosperity rests. And even if you do manage to get the conquered country to ship you...

Posted by DeLong at 03:58 PM

February 19, 2003
Sailing the Wine-Dark Sea

I last read this book two years ago, and I read it last weekend on yet another trip to Monterey. I found myself, once again, enthralled. I also found myself wishing that I had assigned it--or something similar to it--to my students. And then I thought that my reading lists are too long already, and that adding another two to three hours onto their weekly readings would not please them... I wrote the piece below two years ago... H.N. Turteltaub (2001), Over the Wine-Dark Sea: A Sea Adventure of the Ancient World (New York: Forge: 0312876602). I picked this book up from the Barnes and Noble front table on my way down to Monterey for vacation. I had been looking for something light. Instead, I found myself engaged in the book for perhaps four times as many hours as I would usually spend on a book this length. I was entranced because the subject was interesting, because the writing did not get in the way of the story, and because I found myself greatly admiring the project--the historical, educational project--that the author is engaged in. H.N. Turteltaub is also Harry Turtledove, the author of a large number of heroic fantasy...

Posted by DeLong at 07:46 PM