## Bugs in the System

## Source details

**Canonical URL:** [Bugs in the System](https://www.imf.org/-/media/files/publications/fandd/article/2020/september/book-review-angrynomics-lonergan-and-blyth.pdf)

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### Overview
- The book Angrynomics by Eric Lonergan and Mark Blyth is structured as three interrelated topics: a history of capitalism over the past 150 years, an analysis of current discontent (the anger), and a set of proposals for the future.
- The work is composed of short stories and “Platonic dialogues,” aimed at the broader public but grounded in academic research across multiple fields, including references to Michal Kalecki, John Keynes, Karl Polanyi, Aaron Beck, and Martha Nussbaum.
- The reviewer notes the book was written before the global pandemic but offers a framework useful for analyzing the effects of the COVID-19 crisis.

### Diagnosis of capitalism’s “bugs”
- The authors liken the capitalist system to a repeatedly crashing computer and argue that the system never successfully rebooted after the global financial crisis.
- Historical framing:
  - Capitalism 1.0: pre–Great Depression — successfully repaired in the past.
  - Capitalism 2.0: the Keynesian period — successfully repaired in the past.
  - Capitalism 3.0: the neoliberal period — was unable to reset after bugs crashed the system.
- Identified “software bugs” in the contemporary system:
  - Wage stagnation
  - Asset bubbles
  - Excessive bank leverage
  - Inequality

### Causes and character of public anger
- The authors distinguish “good” from “bad” public anger:
  - “Good” anger: stems from moral indignation against societal violators.
  - “Bad” anger: described as an irrational, tribal energy manipulated by populist politicians.
- Recent public anger is judged by the authors to have been (mostly) “good,” attributed to:
  - Macroeconomic trends such as wage stagnation and inequality
  - Asset bubbles
  - Indignation over biased responses to the global financial crisis a decade ago
- The reviewer suggests the book could have delved deeper into the changing political economy, noting that outcomes are products of both the economic system and events that changed the political landscape.
- The framework is considered useful for understanding how COVID-19 has added micro stressors on top of macro challenges.

### Proposed remedies and policy ideas
- The final section lists multiple proposals, many of which the reviewer notes have been proposed before and carry known drawbacks:
  - Helicopter money
  - Dual interest rates
  - Fiscal councils
  - Raising money from licensing
  - Sovereign wealth funds
  - Carbon taxes
- Highlighted proposal:
  - More aggressive use of sovereign wealth funds: governments harness low (or negative) interest rates on public bonds to invest in the stock market.
  - Rationale: The COVID-19 crisis presents an opportunity because interest rates on safe assets are even lower and stock prices are depressed.

### Assessment and implications
- The reviewer finds Angrynomics provides a good lens to understand current political events in a broader context.
- The book is described as remarkably prescient for outlining a conceptual framework of micro and macro stressors that may help understand the implications of the unprecedented COVID-19 crisis.
- Critical note: many proposed measures are not new and have well-known economic drawbacks; the reviewer would have liked deeper exploration of political economy drivers.

### Publication details and reviewer
- Eric Lonergan and Mark Blyth
- Angrynomics
- Columbia University Press, New York, NY, 2020, 192 pp., $30.00
- Review by ANTONIO SPILIMBERGO, deputy director, IMF Research Department

*September 2020 | FINANCE & DEVELOPMENT — Antonio Spilimbergo, deputy director, IMF Research Department.*

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_Source: https://www.imf.org/-/media/files/publications/fandd/article/2020/september/book-review-angrynomics-lonergan-and-blyth.pdf_