Book Review: Angrynomics by Eric Lonergan and Mark Blyth – IMF F&D
Source details
- Canonical URL
- Book Review: Angrynomics by Eric Lonergan and Mark Blyth – IMF F&D
Other formats
Bibliographic details
- Authors: ANTONIO SPILIMBERGO
- Published: September 1, 2020
Review overview and purpose
- Reviewer: ANTONIO SPILIMBERGO, deputy director, IMF Research Department.
- Framing: Angrynomics is structured around three interrelated topics: a history of capitalism over the past 150 years, an analysis of the current discontent (the anger), and a set of proposals for the future.
- Audience: Designed for the broader public but grounded in academic research across economics, history, psychiatry, and philosophy.
Diagnosis of the problem ("the anger")
- Distinction between types of public anger:
- Good anger: moral indignation against societal violators.
- Bad anger: irrational, tribal energy manipulated for political ends by populist politicians.
- Authors’ assessment: recent public anger has been (mostly) good, driven by:
- wage stagnation
- inequality
- asset bubbles
- biased responses to the global financial crisis a decade ago
- Relevance to COVID-19: although written before the global pandemic, the book provides a framework to analyze COVID-19’s effects, which have further inflated micro stressors on top of macro challenges.
Historical and systemic analysis
- System metaphor: capitalism likened to a repeatedly crashing computer.
- Periodization:
- Capitalism 1.0 (pre–Great Depression): successfully repaired by governments in the past.
- Capitalism 2.0 (the Keynesian period): successfully repaired by governments in the past.
- Capitalism 3.0 (our neoliberal period): according to the authors, was unable to reset after bugs crashed the system following the global financial crisis.
- Identified "software bugs" underlying systemic failure:
- wage stagnation
- asset bubbles
- excessive bank leverage
- inequality
- Critique by reviewer: the book highlights these economic failures well but could have delved deeper into the changing political economy, since outcomes reflect both the economic system and political shifts.
Policy proposals and assessment
- Proposals presented in the book include:
- helicopter money
- dual interest rates
- fiscal councils
- raising money from licensing
- sovereign wealth funds
- carbon taxes
- Reviewer’s evaluation:
- Many measures have been proposed before and carry well-known economic drawbacks.
- The most intriguing idea: use sovereign wealth funds more aggressively by harnessing low (or negative) interest rates on public bonds to invest in the stock market.
- Rationale for sovereign wealth funds now: the COVID-19 crisis offers an opportunity because interest rates on safe assets are even lower and stock prices are depressed.
Overall judgment
- Angrynomics offers a useful 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 interpret the implications of the unprecedented COVID-19 crisis.
Antonio Spilimbergo, IMF Research Department — Opinions expressed in articles and other materials are those of the authors; they do not necessarily reflect IMF policy.
Content in this bundle
- Book Review: Angrynomics by Eric Lonergan and Mark Blyth – IMF F&D
- Country Report
- Notes de lecture