In recent weeks I have felt pangs of sympathy for authors publishing books on today’s world that they wrote before Covid-19. The pandemic has turned our existence inside out. A striking quality to Angrynomics is that it could just as well have been written yesterday.
Everything it addresses — the causes of western democratic anger and how to fix it — has been magnified by the lockdown and the resulting economic deep freeze. Big companies drink deep from the hose of central bank liquidity, while their smaller counterparts fight over the trickles to survive.
Coronavirus has bought the roots of populist anger into sharper relief. This book is that rare pre-Covid-19 manuscript that has been made fortuitously more relevant by the virus. It would have been well worth reading anyway. Co-authors, Mark Blyth and Eric Lonergan, have studied populism for years. Lonergan is a macro hedge fund manager who writes about the philosophy of money. Blyth, who is a scholar at Brown University, is the author of Austerity: the History of a Dangerous Idea — a stinging rebuke of the response to the 2008 crisis that he calls “the greatest bait and switch in human history”.
The two authors engage in a series of dialogues to make sense of “what appears at first sight to be an incoherent outpouring of primitive emotion”. Most of us take it for granted that we live in an angry world. Their book makes an optimistic case for how we can escape it.
Key to their thesis is the distinction between tribal anger, which appeals to our primal instincts, and moral outrage, which protests against the wrongs done to us by inept and sometimes corrupt governments. Both are a reaction to the vacuum created by the failure of technocratic politics. Only the second form is healthy.
Between 1981 and 2017, Britain’s gross domestic product doubled, while the use of food banks rose by 1,000 per cent. At a rally in Sunderland,home to the Nissan auto plant, a pro-Remain politician said withdrawal from Europe would damage “our GDP”. To which someone yelled, “your GDP!”. As the authors write: “The disconnect between our experience of the world and the model used to explain it has come to a head . . . We cannot ‘nudge’ this system back to stability.”
Blyth and Lonergan say that cultural explanations for populist anger are circular. Explaining a rise in racism by a rise in the number of racists is both true and trivial. It is also a counsel of despair. “It is easier to chastise the poor for their racism than do anything about their poverty,” they write.
Focusing on our economic choices, and, specifically, on inequality, offers a road map out of the morass: keep it simple, make a difference and cut across political lines. Their biggest idea is to create a national wealth fund. Real negative interest rates are the equivalent of discovering oil. When the cost of borrowing is lower than GDP growth, governments should issue bonds and invest in diverse assets, much as sovereign wealth funds do. The gains over time should be distributed to people as investment trusts that can be used for education and health.
The idea is simple and ingenious. It is arithmetic lunacy to spurn the opportunity of lenders paying us to borrow from them. The proceeds of a national wealth fund would redistribute wealth without raising taxes on the rich, who have perfected a system of worldwide tax avoidance.
It would also generate good returns. In 1998, Hong Kong’s monetary authority put $15bn into the Hang Seng to prop up equity prices. It was initially pilloried for interfering in the markets, but won eventual praise after earning huge returns.
Other solutions include a data dividend in which the big technology companies, such as Amazon, Google and Apple, would be required to pay us for use of our private data. Again, this would be much easier politics than breaking up the tech giants — and far more lucrative for ordinary citizens.
In recent years, the toxic sense that people are voiceless and action is futile has paralysed our democracies. Angrynomics is a rebuke to that “failure of the mind”. If we would only take the trouble to look, many solutions are hidden in plain sight.
Ed Luce is the FT’s US national editor
Angrynomics, by Eric Lonergan and Mark Blyth, Agenda Publishing, Columbia University Press, $16.95
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