Nov 7, 2014 15:58 UTC
Guest Contributor

Review: The secret cause of economic crises

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By Edward Chancellor

The author is a guest columnist. The opinions expressed are his own.

What is the glue which holds an economy together? Disciples of Adam Smith would argue that self-interest serves as the organising principle. The problem with this way of thinking is that it overlooks the fact that man is not an island unto himself. He is a social animal, who must have constant dealings with other people. Besides, according to John Maynard Keynes, it is impossible to pursue our self-interest rationally, because we don’t have enough information to make probabilistic judgments about the future. Instead, we must rely on irrational animal spirits as a spur to action.

Trust, as Geoffrey Hosking points out in his engaging book, “Trust: A History” (OUP), provides a substitute for prescience. The unchecked pursuit of self-interest can undermine trust. The financial crisis which followed the 2008 bankruptcy of Lehman Brothers reminds us that when trust evaporates, the financial system ceases to function and the economic activity shrinks.

COMMENT

There seems to be an unsatisfying tautology embedded in the proposition. The argument seems to be unlimited self-interest leads to breakdown in trust, breakdown in trust leads to financial disruption. But why not vice versa – financial disruption leads to increase in self-interest? I am not persuaded that the order of causation is correct or that the ultimate causal factor is broached by Hosking’s hypothesis.

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Oct 31, 2014 14:00 UTC
kateduguid

Review: No bets on Berkshire after Warren Buffett

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By Kate Duguid

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

The question facing Berkshire Hathaway is life after Warren Buffett. And it’s a quandary worth $330 billion, Berkshire’s market value.

Oct 24, 2014 16:32 UTC

Review: World needs agreed ground rules for peace

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By Martin Hutchinson

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

Henry Kissinger argues in “World Order” that the world needs agreed ground rules as a precondition for achieving peace. The prevailing approach in the West, derived from the 1648 Treaty of Westphalia, of nation states with limited conflicts isn’t reflected in the traditions of emerging nations like China or India. However the 1814 Vienna Congress’s innovation of allowing intervention of great powers only to protect stability might work better.

Oct 17, 2014 19:54 UTC
Guest Contributor

Review: The worst of both Mao and markets

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By Edward Chancellor

The author is a financial historian, journalist and investment strategist. The opinions expressed are his own.

Has the impetus for economic reform in China ground to a halt? Many China-watchers think so, citing state banks’ favouritism of state-owned enterprises (SOEs), the continuing monopoly power of state-owned “national champions,” and the effects of the massive fiscal and credit stimulus launched after the 2008 collapse of Lehman Brothers. Nicholas Lardy will have none of this.

Sep 22, 2014 21:32 UTC

How Big Oil could grease invisible hand

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By Stephanie Rogan

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

The U.S. energy problem is very much due to a breakdown of the free market, contends the new documentary, “Pump.” Married co-directors Josh Tickell and Rebecca Harrell Tickell show how Big Oil’s monopoly on transportation fuels hurts Americans more than they realize. If drivers had options when filling up their tanks, both country and consumers would benefit.

COMMENT

Gas competition would workt – Musk is a Paypal thief – another Obama lackey – Tesla is broke – zero GAAP profits in 10 years – Space X & Solar next – also dependent on tax $$

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Sep 19, 2014 14:52 UTC

VC bigwigs reveal Valley’s contradictions

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By Richard Beales

The author is a Reuters Breakingviews columnist. The opinions expressed are his own. 

A venture capitalist who can co-opt the opening lines of “Anna Karenina” to make a business point deserves attention. In Peter Thiel’s case, he also started PayPal and Palantir Technologies and invested early on in Facebook. His new book, “Zero to One,” describes possible features of the next peerless, world-changing startup – another Google, say.

Aug 29, 2014 10:20 UTC
Edward Hadas

Review: A pained call for radical financial reform

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By Edward Hadas

The author is a Reuters Breakingviews columnist. The opinions expressed are her own.

Martin Wolf is still recovering from the financial crisis. In his new book, the Financial Times economics commentator admits to being surprised at the depth, breadth and length of the economic malaise which followed the near collapse of the global financial system in 2008.

Aug 22, 2014 15:11 UTC

Review: Paul Ryan changes delivery but not direction

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By Stephanie Rogan

The author is a Reuters Breakingviews columnist. The opinions expressed are her own. 

Paul Ryan has written a book, just like Hillary Clinton and Barack Obama before him. Unlike those of his Democratic rivals, though, the U.S. congressman and former vice presidential candidate’s is less memoir than campaign manifesto. Ryan’s fiscal prescriptions are familiar, but it’s also obvious he is trying to find a broader audience for them. Though it’s tempting to dismiss “The Way Forward” as just the musings of another presidential wannabe, the book’s title probably accurately reflects the notion that its contents will guide the Republican strategy in the years to come.

Jul 11, 2014 06:08 UTC

Review: Putting a face on China’s vague ambition

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By Peter Thal Larsen

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

Can a large country be summed up in a single book? The notion may seem preposterous. When it comes to China, however, too many foreign writers seem determined to try to cram a state of more than 1.3 billion people into a few hundred pages. Few would dare attempt anything similar with the United States, which has a quarter of the population.

COMMENT

I will have to read this book, “Age of Ambition.” I see a lot of parallels with China and the U.S. I love this paragraph and I presume China talks about us the same way – ” It is either an economic powerhouse or a financial crisis waiting to happen. The Party has either come up with a better form of governance, or is in thrall to the corrupt elite, which is struggling to keep its grip on power. The country is either a belligerent military superpower preparing to impose its will on the rest of the globe, or run by a government that defensively stokes nationalist sentiments to give some sense of purpose to a restless population.” Thanks Peter.

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Jul 4, 2014 09:49 UTC
Edward Hadas

Review: An American-Chinese morality tale

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By Edward Hadas

The author is a Reuters Breakingviews columnist. The opinions expressed are his own.

The subtitle of Stephen Roach’s new book has an arresting image. “Unbalanced: the Codependency of America and China” describes two economies with mutually reinforcing dysfunctions. This approach is sometimes helpful, but the book’s strongest argument concerns the retired Morgan Stanley economist’s homeland. He makes a persuasive case that “most of America’s deep-seated economic problems…are of its own making.”

COMMENT

As a chinese-american with american heart and knowledge of the china, I will say the falling of the usa and the west nations, there are 2 reason, number, the globalization, the west CEOs just think make quick money, do not look at the long way, so, they just ship the jobs and technology to china without the trade balance, number two, china is one party with a few top leaders without election and with corruption. so, everything is not real business, every is the plan of the communist party, so, the plan of the communist party, is , use all power to make china stronger and weaker the west, for the reason of the value. china was and still is nz-mafia-communist nation, china was not and is not a real communist nation,china is controlled by afew people, with the goal to control the world

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