One small consolation for the current economic pantaraxia is that many very helpful, intelligible and readable books on economics are being written and, it even appears, read. Whether or not you agree with me that we the democratic public have an outright duty to try to understand the economic issues we are invited to vote on, there is no denying that we are being given the opportunity. Ruchir Sharma comes with impressive credentials as the head of Emerging Market Equities at Morgan Stanley. That makes him knowledgeable, in addition to which he is a practising journalist, most publicly in Newsweek, and that has made his writing a model of clarity. What this book is about is economic growth. It is not about the question whether such growth is a good idea, although I suppose it is assumed to be some kind of good thing for the most part. Spurts of growth funded with easy money are not commended, but Brazilian-style constipation with growth opportunities neglected and postponed gets the thumbs-down as well. Subject to rational limits like these, the nations that Sharma inspects are assessed by their growth potential. Growth is also never asked to justify itself as an alternative to, say, freedom or social justice, and this approach at least makes for simplicity.
This is not to say that Sharma makes the mistake of trying to view economics in isolation from politics. For me, economics is a form of sociology - the study of how people behave en masse in the financial sphere. I can't foist this view on Sharma, but he says nothing that leads me to change it. Indeed, his political attitudes are a breath of fresh air in that stifling miasma of prejudice. You can see what I mean from the economies that get the best ratings from him. South Korea comes off best, and I suppose that is nothing surprising. China is another of his prizewinners, and before you say that that is nothing surprising either please be aware that Sharma repeatedly refuses to give any dutiful bonus-marks to democratic forms of government. On the contrary, he says that China proves that a command economy can do the economic thing just as well as democracy can. In this he is not airing some personal political prejudice - Vietnam by contrast is paraded as a miserable instance of how not to do things in a statist and authoritarian way. Back to China for a moment, let me say again that Sharma keeps his blinkers on, and in my opinion rightly. He is strictly talking about economic growth. China has not got round to a welfare state for one thing, which is a basic requirement of western democratic socialism. Deng's priority was - get the economic growth bit right first. That gets him high marks from Mr Sharma, and human rights are not even mentioned.
Of the emerging markets discussed, China happens to be one of the three that I have visited. Three weeks there in 2009, even in three widely different environments, only left me wishing I had world enough and time to know China better but grateful that I had been spared to see it at all. However on my way there I stopped off for a couple of days in Dubai, and I have a story about that which might interest you. This was late May 2009, and I had no wish to gawp at a bunch of hotels in Dubai City but rather to see the country, which after all is only about 100 miles wide. Bear in mind Sharma's context here, which is the role of rumour and (dis)information in creating economic reality, even temporarily. (All economic reality is only temporary, and that is another theme running through this book). My hotel driver's route out of Dubai City was via the `back door' and the sight I saw took my breath away, especially after the ruling sheikh had just assured us that all was well. It was like a scene out of The Day the World Stood Still. The overhead power cables were the biggest I ever saw, and so were the construction vehicles. Except that the vehicles were drawn up in inert lines along the roadside. We passed villages with rows of shops obviously put up to cater for the construction crews, and these were deserted. How I might have affected the world's stock exchanges if I had actually taken the photos I wanted to take and given them to the press I shall never know. Caution reminded me that my driver might report me to heaven knows whom, but I knew the truth about Dubai a few days before the world in general did.
The discussion of Brazil is thoughtful but I missed one element in it. I have family there these days and I can certainly endorse what Sharma says about the rise in living costs since 2006. The story comes down to - Brazil is uniquely self-sufficient in commodities but lacks a proper transport infrastructure. Even a visitor knows that, but what will be the effect of the World Cup in 2014 and the Olympics in 2016? They have to do SOMETHING to improve mobility, but even if it is not all it might be, will it unstop the Brazilian Blockage?
The other interesting discussion concerns Turkey. Erdogan's government is slowly unpicking the secular constitution and recognising the plain fact that they have an Islamic population. Cue panic in certain western quarters, and this chapter, even more than the one on China with its placid recognition that democracy is not some be-all or end-all, is a major contribution to rational thought and debate that should be compulsory reading.
Just one oddity: is Sharma really crediting American growth between 1929 and 1950 to Hayek? I thought there had been some New Deal and a World War in that time. Nor was I aware that Japan's support for tottering firms was Keynesian. Perhaps I misread those sentences. Otherwise great stuff.