Tag: Michael Spence

Book Review by Bhaskar Parichha

Title: Permacrisis: A Plan to Fix a Fractured World 

Authors: Gordon Brown, Mohamed El-Erian, Michael Spence, Reid Lidow 

Publisher: Simon & Schuster UK

A nation or region’s success depends on three things: growth, economic management, and governance. The three dimensions are interconnected and affect each other. Growing an economy is a fundamental part of economic development. Factors like productivity, technological innovation, and sector expansion are all part of it. Infrastructure, education, and research and development are key to sustainable growth. Strong growth can create jobs, raise incomes, and improve living standards.

Governments and institutions take policies and decisions to maintain the economy’s stability and effectiveness. Setting fiscal policies, regulating financial markets, and overseeing trade and investment are tasks involved. The goal of effective economic management is to promote stability, increase competitiveness, and grow the economy. For macroeconomic stability and progress, it takes inflation, budget deficits, and exchange rates into account.

Countries and regions are governed by rules and structures. It includes political institutions, legal systems, and decision-making processes. By promoting transparency, accountability, and participation, sound governance ensures power is exercised fairly and justly. Decisions are made keeping in view society’s most beneficial interests, and citizens’ rights are protected. Maintaining stability, attracting investment, and promoting economic development requires strong governance.

Growth, economic management, and governance reinforce each other. Sustainable economic growth requires effective economic management, ensuring resources are allocated efficiently and policies support it. Effective governance promotes stability and attracts foreign investment through efficient economic management. A well-functioning governance system ensures that economic growth benefits are distributed equitably. After the recent pandemic, economists are worried about a prolonged crisis. Could we be experiencing a permacrisis? It is likely that the current state of the world will lead to anxiety, and that is what this book tells us in splendid detail.

Permacrisis: A Plan to Fix a Fractured World by Gordon Brown, Reid Low, Mohamed A. El-Erian and Michael Spence looks at the economic downturn the world is struggling through right now.

After holding the office of Chancellor of the Exchequer for over a decade, Gordon Brown became Prime Minister. During the 2009 London G20 summit, he mobilised global leaders to walk the world back from the brink of a second Great Depression. He is currently serving as the UN Special Envoy for Global Education, spearheading efforts to ensure quality, inclusive education for all children. He is also a Global Health Finance Ambassador for the World Health Organization. Brown holds a PhD in history from Edinburgh University.

Mohamed A. El-Erian is President of Queens’ College Cambridge. As Chief Economic Advisor at Allianz, he formerly served as Co-Chief Investment Officer and Chief Executive of PIMCO. Besides columnising for Bloomberg Opinion, he’s also a Financial Times contributor. He is a Senior Global Fellow at the Lauder Institute and Rene M. Kern Practice Professor at Wharton School. Before joining Harvard Management Company, he was a managing director at Solomon Smith Barney/Citigroup. His books When Markets Collide and The Only Game in Town were New York Times bestsellers.

Michael Spence is Emeritus Professor of Management at Stanford University. He is a Senior Fellow at Stanford’s Hoover Institution, and a Council on Foreign Relations Distinguished Visiting Fellow. He is an adjunct professor at Bocconi University and an honorary fellow at Magdalen College. He authored The Future of Economic Growth in a Multispeed World. He was Dean of the Stanford Business School from 1990 to 1999, and Dean of the Harvard Faculty of Arts and Sciences from 1984 to 1990. His awards include the John Kenneth Galbraith Prize for teaching excellence and the John Bates Clark Medal. He won the Nobel Prize in Economic Sciences for his work in information economics in 2001.

Reid Lidow served as Los Angeles Mayor’s Executive Officer. Reid worked on Gordon Brown’s campaigns before. During his undergraduate studies at USC, Reid double majored in International Relations and Political Science. He received a Gates Cambridge Scholarship and an MPhil in Development Studies from Queens’ College, Cambridge. 

As some of the most highly respected and experienced thinkers of our time, these friends found that their pandemic zooms increasingly focused on a cascade of crises: sputtering growth, surging inflation, poor policy responses, an escalating climate emergency, increasing inequality, a rise in nationalism, and a decline in international cooperation. They shared their fears and frustrations with each other. The more they talked, the more they realised that, despite past mistakes that set the world on this bumpy path, there is a better path to a brighter future. Their varied perspectives contributed to their pursuit of a common goal: attainable solutions to the world’s fractures. Those thoughts are reflected in this book.

According to the authors, our current permacrisis is a result of broken approaches to growth, economic management, and governance. Even though these approaches are flawed, they can be repaired. A provocative, inspiring plan to change the world is the need of the hour. The book illustrates how we can prevent crises and improve the future for the benefit of the many and the few. According to the book, problems that remain unresolved for a prolonged period of time will only worsen; this is what happens in a permacrisis, which is why we must act quickly.

This instructive book provides a sensible plan of reform that can be used to create a world that is fairer and more equitable.

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Bhaskar Parichha is a journalist and author of Unbiased, No Strings Attached: Writings on Odisha and Biju Patnaik – A Political Biography. He lives in Bhubaneswar and writes bilingually. Besides writing for newspapers, he also reviews books on various media platforms.

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