BACK OF THE BOOK

If you're a loyal reader and fan of The Economist, like this reviewer is, a new book by its Editor Bill Emmott is bound to raise expectations. For one, the magazine that he edits rarely disappoints. Well, there is that regular dose of Brit superciliousness and sometimes too many tired bits of wry humour, but discount those and the magazine is usually a pleasurable read-insightful, on-the-ball and lucid. Everything you'd want from contemporary journalism. In 20:21 Vision-The Lessons Of The 20th Century For The 21st, Emmott, like his magazine, grapples with questions about the future of the world. Two questions really. One deals with the future of capitalism, whether it will survive and maintain the pace of its spread and dominance across the world. And the second with whether the US, the world's omnipotent superpower, will continue to dominate the world's affairs, keeping peace and helping the spread of capitalism.

20:21 Vision By Bill Emmott Farrar Straus & Giroux PP: 384 Price: Rs 1,242.50

In his book, the two questions are pre-answered in the affirmative. So if you're looking for Emmott to surprise you, don't. The questions are also the two most important challenges that face us today. Will capitalism continue to spread? Will the US dominate?

Yet, it could result in a bit of a let-down if you look for great insights into the future. Emmott's gaze into the crystal ball cannot be prophetic. And, as everyone writing about the future does, he too delves into the past and the contemporary.

Take capitalism. True, there are unsettling aspects of capitalism, like sharp inequalities in incomes, particularly during the initial phases when an economy opens up, and the rise of globalisation. Both continue to be pet causes for the critics of capitalism, but theirs is hardly a thriving breed. Simply because there's no real alternative. "Governments that run their economies as though they can be certain about the outcomes... have been mostly proved wrong." Even the anti-globalisation movement, which opposes the spread of capitalism, doesn't proffer alternatives to markets and liberal democracy. Adds Emmott: "Although it will never be loved, capitalism is already a lot better regulated in all the rich countries than it was a hundred years ago and in an increasing number of poor ones, making it less likely that periods of instability, inequality or even environmental damage will be devastating."

Emmott doesn't naively ask-unlike economists and journalists in the 1980s and 1990s-whether capitalism will survive. Instead, he asks whether the world, particularly the developing world, will be able to overcome its mistrust (or at least ambivalence) towards capitalism and share in the prosperity it brings.

Likewise, for the other geopolitical question. It isn't really whether the US will dominate-it's a superpower many times over, so that's already answered. In the aftermath of the Iraq war, many nations may worry about US dominance and its overt tendency to throw its weight around. But Emmott is clearly not worried. He sees America as a hand that steers the world to prosperity. US leadership, combined with technological advances are what, he notes, have been responsible for the progress of much of the world since after the Second World War.

Still, one need not share Emmott's bullishness to empathise with his final chapter, which calls for "paranoid optimism" about the future of the world. A tip: read this book's chapters as discrete essays and not necessarily in sequence.

Saving Capitalism From Capitalists By Raghuram G. Rajan & Luigi Zingales Crown Publishing PP: 384 Price: Rs 1,081

The first thing to be said about a book that's thought to have given one of its co-authors (and academic colleagues at the University of Chicago's B-school) the coveted job of IMF's Chief Economist, is simple. It deserves a read.

The second thing is more complex, and more important: the book is indeed relevant, as the eyepatch on the cover's dollar bill would suggest.

The authors do an effective job of jolting supporters of the 'free market system' (a term preferred over the slightly anachronistic 'capitalism') out of their 'end of history' sense of complacency. They argue that while capitalism is the worst economic system except for all that have been tried, it is also "fragile"- and woefully vulnerable to subversion by competition-fearing crony capitalists operating in cohoots with market-bashing policymakers.

The authors remind us that market freedom didn't just descend upon the West, it was hard fought-against rapacious authoritarianism. And even long after the Rule of Law took hold, markets suffered severe political containment for half a century, till about 1980. It can happen again, they warn.

The self-corrective nature of markets is under question again. "If Socialism is fundamentally flawed in its belief in the perfectibility of man, in its belief that man will overcome his narrow individualism and become an expansive social being, is Capitalism also not fundamentally flawed in its belief in the perfectibility of markets, in its belief that markets will overcome the narrow interests of their participants and survive free?" No, they write, because much can be done to keep Capitalism from degenerating into "a system of the incumbents, by the incumbents, for the incumbents".

The end of the book is prescriptive, and this is where the authors give the "very visible hand of the government" a recommended role: in safeguarding institutions, in reducing the incentive of incumbents to oppose competition, in reducing their crony power to do so, in creating safety nets for those in distress, and finally, in raising public awareness of the dangers of a hijacked market system.

In conclusion, this book is interesting because it refuses to treat the free market's 'invisible hand' as some quasi-mystical force, inevitably victorious. Instead, it treats it with agnostic realism, for it is as mortal as the ideals that sustain it.