Charles recommended to me the 1974 Nobel Prize lecture by Austrian economist Friedrich von Hayek. Hayek is always worth consulting to firm up our footings — and this lecture is an efficient way to access the founder of the Austrian school:
(…) as a profession we have made a mess of things.
After reading the Hayek lecture I recommend you read “This Time is Different: A Panoramic View of Eight Centuries of Financial Crises“, one of the papers that laid the foundation for Rogoff and Reinhart’s 2009 book This Time is Different: Eight Centuries of Financial Folly. Amazon readers really liked this review:
Rogoff and Reinhart, two very substantive (and, I might add, earnest) economists, have produced a prodigious work which will be read and studied for years. They have gathered mountains of data from primary and secondary sources and reduced it to dozens of charts and graphs, a heroic work in its own right. Their intention, God bless ‘em, is to lay out the follies that have led to economic/financial crises over the last eight centuries. Their findings: humans have not learned from past mistakes. The title is ironic and is worthy of Peter DeVries.
The authors say it is “almost comical” that no governments reveal their true financial condition today, nor have they done so in the past. The lack of transparency and the shenanigans that go on behind the curtains contribute, of course, to the human suffering that ensues in crisis after crisis.
One needs to find this book comical if one is not to slip into a permanent depression about the utter failure of national leaders to address shortcomings in national domestic and foreign economic policies in order to avoid systemic crises. No one has, from the 13th century onward, anywhere in the world.
The authors persist in saying that they hope their monumental effort will lead to an examination by policymakers of past mistakes and help them avoid future mistakes. I say, “Good luck with that.” In my opinion, this book ranks with the complete works of Shakespeare in illuminating the human condition. Or Bruegel, or Beethoven. It will not bring about change, but it will entertain in a deeply satisfying way.
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