Book Reviews

Progress in Political Economy

Michael Mandelbaum

The Road to Global Prosperity

Simon & Schuster, New York, 2014, 272 pp., $28.00 (cloth).

Globalization—greater connectedness, to be more precise—dominates in our era, and making sense of its virtues and vices may be the central question. Most politicians try a practical approach—as the old saw goes, “The only thing worse than being exploited by multinational capitalism is not being exploited by multinational capitalism.” Yet the literature on globalization has been much more polarized between enthusiasts, who consider free trade, open capital markets, and the free flow of people the great engines of human progress, and critics who blame those forces for wrecking communities and the environment.

Michael Mandelbaum is in the first camp. His new book is breezy, accessible, and peppered with facts. It tries to restate the optimist’s position while calibrating enthusiasm down a few notches to fit the post-financial-crisis mood. His central argument is simple: if economics is the solution, politics is the problem. The “global economy, when it is working successfully—indeed because it is working successfully—cannot help but provoke opposition to its workings, which in turn produces political conflicts.”

After the obligatory canter through free trade theory, and a quick gallop through the headlines of recent economic history, the book hits its stride with its description of how politics obstructs rational economics, particularly in the so-called BRICS (Brazil, Russia, India, China, South Africa). India will be let down by its messy, corrupt democratic politics. But will it be a greater disrupter than China, whose ability to compete in services will threaten far more than the West’s manufacturing workforce? Russia must cope with bribery—20 percent of GDP in 2005. It also suffers from an unhealthy mix of populism, authoritarianism, and inefficiency, with “energy revenues high enough to generate widespread corruption and prevent robust growth, but not high enough to sustain the standard of living to which Russians aspire.” Brazil is also vulnerable to populism: 13 percent of its GDP goes for pensions, and proponents of greater public expenditure are likely to defeat “those favouring prudence who have economic history on their side.”

Mandelbaum nearly always blames the people or, more precisely, the way democracy mobilizes populist sentiment to defy economic...