Brilliant insights, well-chosen statistics and thoughtful writing combine in this book to stand common-place thinking on its head. Economics weaves together seven authors' myriad articles into a coherent summary of the current situation in markets and technology. The main premise of the book is that, even though tremendous technological advances have taken place, economic progress has not been as dramatic as daily headlines would suggest.

Two key ratios drive this point home. First, the ratio of trade to world output today is less than it was a century ago. That is, while output has expanded astronomically, the amount of trade between countries is less. Second, the amount of human migration--those economic agents out seeking a better life--is again less today than it was 100 years ago. The book explains these seemingly paradoxical factors. The culprit is government intervention in the form of, for example, trade barriers and migration restrictions. Another fascinating concept is that despite all the huge investment in computers, productivity gains have not yet occurred. The apparent answer is just to wait. The advent of electricity took 40 years to take hold.

The main themes of the first section include globalisation, popular myths and economic facts, technology, the pull between governments and markets and the role of the government in the future and the outcome of the East Asian economies. The second section of the book is devoted to the misuse of economic thinking. Any ageing economist will remember the topics from his or her university days; for those who did not read economics, the book provides an easy-to-read summary of mainstream economic thought.

Economics is richly filled, but not overburdened, with well-chosen statistics. Each article stands alone and the entire book will cause readers to consider today's key economic events in a new light. --Bruce McWilliams

Enlightenment on the issues surrounding the capital markets, 05 Oct 2007
Whilst I slightly disagree with the back cover comment that the book is written in a "jargon-free" style (a basic knowledge of Economic theory would be useful), I thought the book was highly useful in unravelling the mysteries surrounding the 'Northern Rock Crisis'. I studied Economics as part of an MBA course and this book improved my understanding of the dismal science. The book is article based which I wasn't aware of when I bought it, so if you're looking for a beginners guide, I recommend you look elsewhere. Try Sloman's Essential Economics or 'Free Lunch' by David Smith.

Enlightenment on the issues surrounding the capital markets, 05 Oct 2007
Whilst I slightly disagree with the back cover comment that the book is written in a "jargon-free" style (a basic knowledge of Economic theory would be useful), I thought the book was highly useful in unravelling the mysteries surrounding the 'Northern Rock Crisis'. I studied Economics as part of an MBA course and this book improved my understanding of the dismal science. The book is article based which I wasn't aware of when I bought it, so if you're looking for a beginners guide, I recommend you look elsewhere. Try Sloman's Essential Economics or 'Free Lunch' by David Smith.

Prophetic economic analysis, 12 Nov 2008
Subsequent events have proven this book to be somewhat prophetic. Richard Duncan offers a very good, although somewhat dry, exposition of the international financial structures that emerged in the wake of the failure of the Bretton Woods system. The author is reasonably evenhanded in his assessment of these structures, noting that they made extremely rapid development possible, but at the great risk of economic crisis. In the wake of the subprime mortgage setbacks of 2007 and 2008, few well-informed people would argue with the author's indictment of excessive credit expansion. Still, many might argue with his conclusions, especially with his support of a global central bank and a global minimum wage. For those seeking a clear, informed exposition of the systemic vulnerabilities that culminated in the global credit crisis of 2008, getAbstract suggests this book as an excellent starting point.

compelling, enjoyable and brilliantly analysed, 22 Mar 2004
Every day we are barraged by so much raw data on GDP, borrowing, exchange rates and trade deficits etc. The 'facts' we see on business news TV and in learned economic journals are plentiful. Sadly, long lists of facts aren't particularly useful if, like most people, you don't know how to analyse them usefully. This book makes sense of the economic forces that underpin the dollar and the US stock market, putting today's precarious situation into historical perspective and explaining why the dollar must fall. Lucid explanations abound along with plenty of charts and recaps of all the important points exactly when you were about to let something slip from the front of your mind. Brilliant on the qualitative arguments but even more impressive on the quantitative stuff. This is a far more serious work than most of its competition like "Financial Reckoning Day" which I read on the same day. If you're into having your thoughts and opinions backed up with meaningful fact based analysis then this is the book for you.

Enlightenment on the issues surrounding the capital markets, 05 Oct 2007
Whilst I slightly disagree with the back cover comment that the book is written in a "jargon-free" style (a basic knowledge of Economic theory would be useful), I thought the book was highly useful in unravelling the mysteries surrounding the 'Northern Rock Crisis'. I studied Economics as part of an MBA course and this book improved my understanding of the dismal science. The book is article based which I wasn't aware of when I bought it, so if you're looking for a beginners guide, I recommend you look elsewhere. Try Sloman's Essential Economics or 'Free Lunch' by David Smith.

Prophetic economic analysis, 12 Nov 2008
Subsequent events have proven this book to be somewhat prophetic. Richard Duncan offers a very good, although somewhat dry, exposition of the international financial structures that emerged in the wake of the failure of the Bretton Woods system. The author is reasonably evenhanded in his assessment of these structures, noting that they made extremely rapid development possible, but at the great risk of economic crisis. In the wake of the subprime mortgage setbacks of 2007 and 2008, few well-informed people would argue with the author's indictment of excessive credit expansion. Still, many might argue with his conclusions, especially with his support of a global central bank and a global minimum wage. For those seeking a clear, informed exposition of the systemic vulnerabilities that culminated in the global credit crisis of 2008, getAbstract suggests this book as an excellent starting point.

compelling, enjoyable and brilliantly analysed, 22 Mar 2004
Every day we are barraged by so much raw data on GDP, borrowing, exchange rates and trade deficits etc. The 'facts' we see on business news TV and in learned economic journals are plentiful. Sadly, long lists of facts aren't particularly useful if, like most people, you don't know how to analyse them usefully. This book makes sense of the economic forces that underpin the dollar and the US stock market, putting today's precarious situation into historical perspective and explaining why the dollar must fall. Lucid explanations abound along with plenty of charts and recaps of all the important points exactly when you were about to let something slip from the front of your mind. Brilliant on the qualitative arguments but even more impressive on the quantitative stuff. This is a far more serious work than most of its competition like "Financial Reckoning Day" which I read on the same day. If you're into having your thoughts and opinions backed up with meaningful fact based analysis then this is the book for you.

Highly Recommended!, 21 Oct 2005
Although author Benjamin M. Friedman teaches economics at Harvard, this book is not mainly about economics; it is mainly about morality. Friedman goes beyond traditional academic boundaries to propose that the moral tone of various Western democratic societies is connected to their economic growth. This impressive effort may introduce you to potential connections you might otherwise have ignored. However, Friedman offers both sides of the picture. Although economic growth correlates with social progress and stronger democracy, the correlation is not exact. There are some interesting counterexamples. Moreover, the question of how to define social moral progress is very much open. The author, for example, equates racial preferences in college admissions with moral progress, though that is a controversial issue. We find that this good, thought-provoking book offers a great deal of valuable insight into a seldom-considered aspect of economic growth.

Enlightenment on the issues surrounding the capital markets, 05 Oct 2007
Whilst I slightly disagree with the back cover comment that the book is written in a "jargon-free" style (a basic knowledge of Economic theory would be useful), I thought the book was highly useful in unravelling the mysteries surrounding the 'Northern Rock Crisis'. I studied Economics as part of an MBA course and this book improved my understanding of the dismal science. The book is article based which I wasn't aware of when I bought it, so if you're looking for a beginners guide, I recommend you look elsewhere. Try Sloman's Essential Economics or 'Free Lunch' by David Smith.

Prophetic economic analysis, 12 Nov 2008
Subsequent events have proven this book to be somewhat prophetic. Richard Duncan offers a very good, although somewhat dry, exposition of the international financial structures that emerged in the wake of the failure of the Bretton Woods system. The author is reasonably evenhanded in his assessment of these structures, noting that they made extremely rapid development possible, but at the great risk of economic crisis. In the wake of the subprime mortgage setbacks of 2007 and 2008, few well-informed people would argue with the author's indictment of excessive credit expansion. Still, many might argue with his conclusions, especially with his support of a global central bank and a global minimum wage. For those seeking a clear, informed exposition of the systemic vulnerabilities that culminated in the global credit crisis of 2008, getAbstract suggests this book as an excellent starting point.

compelling, enjoyable and brilliantly analysed, 22 Mar 2004
Every day we are barraged by so much raw data on GDP, borrowing, exchange rates and trade deficits etc. The 'facts' we see on business news TV and in learned economic journals are plentiful. Sadly, long lists of facts aren't particularly useful if, like most people, you don't know how to analyse them usefully. This book makes sense of the economic forces that underpin the dollar and the US stock market, putting today's precarious situation into historical perspective and explaining why the dollar must fall. Lucid explanations abound along with plenty of charts and recaps of all the important points exactly when you were about to let something slip from the front of your mind. Brilliant on the qualitative arguments but even more impressive on the quantitative stuff. This is a far more serious work than most of its competition like "Financial Reckoning Day" which I read on the same day. If you're into having your thoughts and opinions backed up with meaningful fact based analysis then this is the book for you.

Highly Recommended!, 21 Oct 2005
Although author Benjamin M. Friedman teaches economics at Harvard, this book is not mainly about economics; it is mainly about morality. Friedman goes beyond traditional academic boundaries to propose that the moral tone of various Western democratic societies is connected to their economic growth. This impressive effort may introduce you to potential connections you might otherwise have ignored. However, Friedman offers both sides of the picture. Although economic growth correlates with social progress and stronger democracy, the correlation is not exact. There are some interesting counterexamples. Moreover, the question of how to define social moral progress is very much open. The author, for example, equates racial preferences in college admissions with moral progress, though that is a controversial issue. We find that this good, thought-provoking book offers a great deal of valuable insight into a seldom-considered aspect of economic growth.

Don't be misled by the publisher's synopsis, 27 May 2008
This isn't just another rant about the evils of the corporations. It's a very cool and sharp analysis that's worth buying, reading, and re-reading just for the chapter on the imperatives of technology.

Enlightenment on the issues surrounding the capital markets, 05 Oct 2007
Whilst I slightly disagree with the back cover comment that the book is written in a "jargon-free" style (a basic knowledge of Economic theory would be useful), I thought the book was highly useful in unravelling the mysteries surrounding the 'Northern Rock Crisis'. I studied Economics as part of an MBA course and this book improved my understanding of the dismal science. The book is article based which I wasn't aware of when I bought it, so if you're looking for a beginners guide, I recommend you look elsewhere. Try Sloman's Essential Economics or 'Free Lunch' by David Smith.

Prophetic economic analysis, 12 Nov 2008
Subsequent events have proven this book to be somewhat prophetic. Richard Duncan offers a very good, although somewhat dry, exposition of the international financial structures that emerged in the wake of the failure of the Bretton Woods system. The author is reasonably evenhanded in his assessment of these structures, noting that they made extremely rapid development possible, but at the great risk of economic crisis. In the wake of the subprime mortgage setbacks of 2007 and 2008, few well-informed people would argue with the author's indictment of excessive credit expansion. Still, many might argue with his conclusions, especially with his support of a global central bank and a global minimum wage. For those seeking a clear, informed exposition of the systemic vulnerabilities that culminated in the global credit crisis of 2008, getAbstract suggests this book as an excellent starting point.

compelling, enjoyable and brilliantly analysed, 22 Mar 2004
Every day we are barraged by so much raw data on GDP, borrowing, exchange rates and trade deficits etc. The 'facts' we see on business news TV and in learned economic journals are plentiful. Sadly, long lists of facts aren't particularly useful if, like most people, you don't know how to analyse them usefully. This book makes sense of the economic forces that underpin the dollar and the US stock market, putting today's precarious situation into historical perspective and explaining why the dollar must fall. Lucid explanations abound along with plenty of charts and recaps of all the important points exactly when you were about to let something slip from the front of your mind. Brilliant on the qualitative arguments but even more impressive on the quantitative stuff. This is a far more serious work than most of its competition like "Financial Reckoning Day" which I read on the same day. If you're into having your thoughts and opinions backed up with meaningful fact based analysis then this is the book for you.

Highly Recommended!, 21 Oct 2005
Although author Benjamin M. Friedman teaches economics at Harvard, this book is not mainly about economics; it is mainly about morality. Friedman goes beyond traditional academic boundaries to propose that the moral tone of various Western democratic societies is connected to their economic growth. This impressive effort may introduce you to potential connections you might otherwise have ignored. However, Friedman offers both sides of the picture. Although economic growth correlates with social progress and stronger democracy, the correlation is not exact. There are some interesting counterexamples. Moreover, the question of how to define social moral progress is very much open. The author, for example, equates racial preferences in college admissions with moral progress, though that is a controversial issue. We find that this good, thought-provoking book offers a great deal of valuable insight into a seldom-considered aspect of economic growth.

Don't be misled by the publisher's synopsis, 27 May 2008
This isn't just another rant about the evils of the corporations. It's a very cool and sharp analysis that's worth buying, reading, and re-reading just for the chapter on the imperatives of technology.

The UK Economy, 28 Jan 2003
This is a comprehensive introduction to Economics suitable for university first year students or anyone without formal training in the subject. Mr. Sawyer/R.L. Harrington covers almost every aspect of the UK economy, highlighting how Economics could be applied to the current UK economic scenarios in this newest 15th edition. Diagrams and charts used are also easy to understand and illustrative. The book is relatively short and is an easy read. I will definately recommend this book to all Economics students whether at university or at college.

Enlightenment on the issues surrounding the capital markets, 05 Oct 2007
Whilst I slightly disagree with the back cover comment that the book is written in a "jargon-free" style (a basic knowledge of Economic theory would be useful), I thought the book was highly useful in unravelling the mysteries surrounding the 'Northern Rock Crisis'. I studied Economics as part of an MBA course and this book improved my understanding of the dismal science. The book is article based which I wasn't aware of when I bought it, so if you're looking for a beginners guide, I recommend you look elsewhere. Try Sloman's Essential Economics or 'Free Lunch' by David Smith.

Prophetic economic analysis, 12 Nov 2008
Subsequent events have proven this book to be somewhat prophetic. Richard Duncan offers a very good, although somewhat dry, exposition of the international financial structures that emerged in the wake of the failure of the Bretton Woods system. The author is reasonably evenhanded in his assessment of these structures, noting that they made extremely rapid development possible, but at the great risk of economic crisis. In the wake of the subprime mortgage setbacks of 2007 and 2008, few well-informed people would argue with the author's indictment of excessive credit expansion. Still, many might argue with his conclusions, especially with his support of a global central bank and a global minimum wage. For those seeking a clear, informed exposition of the systemic vulnerabilities that culminated in the global credit crisis of 2008, getAbstract suggests this book as an excellent starting point.

compelling, enjoyable and brilliantly analysed, 22 Mar 2004
Every day we are barraged by so much raw data on GDP, borrowing, exchange rates and trade deficits etc. The 'facts' we see on business news TV and in learned economic journals are plentiful. Sadly, long lists of facts aren't particularly useful if, like most people, you don't know how to analyse them usefully. This book makes sense of the economic forces that underpin the dollar and the US stock market, putting today's precarious situation into historical perspective and explaining why the dollar must fall. Lucid explanations abound along with plenty of charts and recaps of all the important points exactly when you were about to let something slip from the front of your mind. Brilliant on the qualitative arguments but even more impressive on the quantitative stuff. This is a far more serious work than most of its competition like "Financial Reckoning Day" which I read on the same day. If you're into having your thoughts and opinions backed up with meaningful fact based analysis then this is the book for you.

Highly Recommended!, 21 Oct 2005
Although author Benjamin M. Friedman teaches economics at Harvard, this book is not mainly about economics; it is mainly about morality. Friedman goes beyond traditional academic boundaries to propose that the moral tone of various Western democratic societies is connected to their economic growth. This impressive effort may introduce you to potential connections you might otherwise have ignored. However, Friedman offers both sides of the picture. Although economic growth correlates with social progress and stronger democracy, the correlation is not exact. There are some interesting counterexamples. Moreover, the question of how to define social moral progress is very much open. The author, for example, equates racial preferences in college admissions with moral progress, though that is a controversial issue. We find that this good, thought-provoking book offers a great deal of valuable insight into a seldom-considered aspect of economic growth.

Don't be misled by the publisher's synopsis, 27 May 2008
This isn't just another rant about the evils of the corporations. It's a very cool and sharp analysis that's worth buying, reading, and re-reading just for the chapter on the imperatives of technology.

The UK Economy, 28 Jan 2003
This is a comprehensive introduction to Economics suitable for university first year students or anyone without formal training in the subject. Mr. Sawyer/R.L. Harrington covers almost every aspect of the UK economy, highlighting how Economics could be applied to the current UK economic scenarios in this newest 15th edition. Diagrams and charts used are also easy to understand and illustrative. The book is relatively short and is an easy read. I will definately recommend this book to all Economics students whether at university or at college.

Fascinating account of recent Japanese economic history, 06 Feb 2005
Werner's book is a fascinating insight into recent Japanese economic history - written by a long-time student of the Japanese economy and one of the few "gaijin" who entered the inner circle of Japanese decision-makers. While most foreign observers have always considered the Ministry of Finance or MITI behind much of Japanese economic policy, Werner shows that the gravity of power has shifted to an institution that has received barely passing attention by outside analysts: the central bank. Neo-classicial economists largely disregard the role that money and credit play in an economy. Terms such as "money illusion" serve to distract attention from the important and fundamental impact that money and credit creation play in any economy. Using the Japanese economy is a case study, Werner recounts a story that almost reads like a crime novel. The fact that his story smells like intrigue and conspiracy to some commentators does not suprise: the fact that Japan's famous "Mr. Yen" (the former Vice-Minister of Finance) basically attests to its accuracy leaves little doubt as to the sustance of Werner's story. For one, an economics books that will keep you awake at night!

Conjecture, conspiracy theory, and few facts, 27 Aug 2004
"Princes of the Yen" is not a book that a reader with a casual interest in Japan should contemplate. This is not because the writing style is inaccessible - tabloid economics sums it up. Nor is it because the topic is obscure (though, frankly, central banking is not normally a mainstream subject). The risk is that a casual reader might think that Mr Werner offers arguments are in anyway plausible.

The central tenet of Mr Werner's thesis is that something akin to a giant conspiracy has been worked on the world, orchestrated by a small group within the Bank of Japan (the eponymous "princes" of the title). This group does not include all of the governors of the BoJ, of course (too many say and do things that do not fit in with the central ideas of this book). In the shady twilight of Japanese economics, as constructed in Mr Werner's active imagination, any BoJ governor who is not a "prince" is automatically a puppet.

The purpose of this group of "princes" is simple; they wish to achieve BoJ independence. What they do with that independence, or why they have so burning and destructive a desire for independence, is not explained anywhere in the text - independence at any cost is simply assumed as a sufficient objective in its own right. Everything in Japan can be rationalised by this, according to Mr Werner. The lost decade of the 1990s? A deliberate attempt to undermine the Ministry of Finance, orchestrated by the "Princes". The preceding boom? Part of the master plan, to create the recession of the 1990s, orchestrated by the "Princes".

The reader gets some warning of the nature of this theory, of course. Fully 10% of the bibliography is Mr Werner's own works (if you are going to be this "radical", it is hard to find supporting evidence other than that which you yourself have manufactured). Conjecture forms a large part of Mr Werner's evidence - "perhaps" the Ministry of Finance thought that foreign exchange intervention in the mid 1990s would be left unsterilised, for instance (it never had been in the preceding fifty years. Mr Werner does not suggest why the Ministry of Finance would have assumed so seismic a change in BoJ policy).

Where official statistics do not support the evidence (the money supply just will not co-operate), Mr Werner comes up with the neat trick of disregarding them and offering his own proxies that are tailored to fit. Qualified economists call this sort of activity "data mining".

Other objections to the central theory are ignored. Just how did the "Princes" managed to conceal their true intent from generations of academics, journalists, financial analysts, politicians, and not a few governors of the BoJ? Has the world really had to wait for someone of Mr Werner's intellectual prowess before the veil of ignorance can lift?

Mr Werner has a single, simple solution to the problem of an all-powerful BoJ. Nominal GDP targets will solve everything. Never mind that the quality of Japanese statistics is so poor even their own statisticians do not trust them. Never mind the fact that GDP is published with an impossibly long lag, and that monetary policy leads economic activity. Never mind that GDP is so frequently revised that what initially looks like strong growth can easily morph into recession when the statisticians have had a chance to review everything from a couple of years perspective. This, Mr Werner believes, will solve everything. The solution is as ludicrous as the premise on which the problem is constructed.

So why should this book be given shelf space in any library? It serves one useful purpose that I can think of. Japanese political and economic analysis has always been tainted by a certain extremism - fringe views that strive to exaggerate the uniqueness of Japan (to make Japan "more unique" than other countries). This work serves to remind seasoned Japanese observers of just how lunatic the "lunatic fringe" of Japanese analysis can be, when it sets its mind to it.

Enlightenment on the issues surrounding the capital markets, 05 Oct 2007
Whilst I slightly disagree with the back cover comment that the book is written in a "jargon-free" style (a basic knowledge of Economic theory would be useful), I thought the book was highly useful in unravelling the mysteries surrounding the 'Northern Rock Crisis'. I studied Economics as part of an MBA course and this book improved my understanding of the dismal science. The book is article based which I wasn't aware of when I bought it, so if you're looking for a beginners guide, I recommend you look elsewhere. Try Sloman's Essential Economics or 'Free Lunch' by David Smith.

Prophetic economic analysis, 12 Nov 2008
Subsequent events have proven this book to be somewhat prophetic. Richard Duncan offers a very good, although somewhat dry, exposition of the international financial structures that emerged in the wake of the failure of the Bretton Woods system. The author is reasonably evenhanded in his assessment of these structures, noting that they made extremely rapid development possible, but at the great risk of economic crisis. In the wake of the subprime mortgage setbacks of 2007 and 2008, few well-informed people would argue with the author's indictment of excessive credit expansion. Still, many might argue with his conclusions, especially with his support of a global central bank and a global minimum wage. For those seeking a clear, informed exposition of the systemic vulnerabilities that culminated in the global credit crisis of 2008, getAbstract suggests this book as an excellent starting point.

compelling, enjoyable and brilliantly analysed, 22 Mar 2004
Every day we are barraged by so much raw data on GDP, borrowing, exchange rates and trade deficits etc. The 'facts' we see on business news TV and in learned economic journals are plentiful. Sadly, long lists of facts aren't particularly useful if, like most people, you don't know how to analyse them usefully. This book makes sense of the economic forces that underpin the dollar and the US stock market, putting today's precarious situation into historical perspective and explaining why the dollar must fall. Lucid explanations abound along with plenty of charts and recaps of all the important points exactly when you were about to let something slip from the front of your mind. Brilliant on the qualitative arguments but even more impressive on the quantitative stuff. This is a far more serious work than most of its competition like "Financial Reckoning Day" which I read on the same day. If you're into having your thoughts and opinions backed up with meaningful fact based analysis then this is the book for you.

Highly Recommended!, 21 Oct 2005
Although author Benjamin M. Friedman teaches economics at Harvard, this book is not mainly about economics; it is mainly about morality. Friedman goes beyond traditional academic boundaries to propose that the moral tone of various Western democratic societies is connected to their economic growth. This impressive effort may introduce you to potential connections you might otherwise have ignored. However, Friedman offers both sides of the picture. Although economic growth correlates with social progress and stronger democracy, the correlation is not exact. There are some interesting counterexamples. Moreover, the question of how to define social moral progress is very much open. The author, for example, equates racial preferences in college admissions with moral progress, though that is a controversial issue. We find that this good, thought-provoking book offers a great deal of valuable insight into a seldom-considered aspect of economic growth.

Don't be misled by the publisher's synopsis, 27 May 2008
This isn't just another rant about the evils of the corporations. It's a very cool and sharp analysis that's worth buying, reading, and re-reading just for the chapter on the imperatives of technology.

The UK Economy, 28 Jan 2003
This is a comprehensive introduction to Economics suitable for university first year students or anyone without formal training in the subject. Mr. Sawyer/R.L. Harrington covers almost every aspect of the UK economy, highlighting how Economics could be applied to the current UK economic scenarios in this newest 15th edition. Diagrams and charts used are also easy to understand and illustrative. The book is relatively short and is an easy read. I will definately recommend this book to all Economics students whether at university or at college.

Fascinating account of recent Japanese economic history, 06 Feb 2005
Werner's book is a fascinating insight into recent Japanese economic history - written by a long-time student of the Japanese economy and one of the few "gaijin" who entered the inner circle of Japanese decision-makers. While most foreign observers have always considered the Ministry of Finance or MITI behind much of Japanese economic policy, Werner shows that the gravity of power has shifted to an institution that has received barely passing attention by outside analysts: the central bank. Neo-classicial economists largely disregard the role that money and credit play in an economy. Terms such as "money illusion" serve to distract attention from the important and fundamental impact that money and credit creation play in any economy. Using the Japanese economy is a case study, Werner recounts a story that almost reads like a crime novel. The fact that his story smells like intrigue and conspiracy to some commentators does not suprise: the fact that Japan's famous "Mr. Yen" (the former Vice-Minister of Finance) basically attests to its accuracy leaves little doubt as to the sustance of Werner's story. For one, an economics books that will keep you awake at night!

Conjecture, conspiracy theory, and few facts, 27 Aug 2004
"Princes of the Yen" is not a book that a reader with a casual interest in Japan should contemplate. This is not because the writing style is inaccessible - tabloid economics sums it up. Nor is it because the topic is obscure (though, frankly, central banking is not normally a mainstream subject). The risk is that a casual reader might think that Mr Werner offers arguments are in anyway plausible.

The central tenet of Mr Werner's thesis is that something akin to a giant conspiracy has been worked on the world, orchestrated by a small group within the Bank of Japan (the eponymous "princes" of the title). This group does not include all of the governors of the BoJ, of course (too many say and do things that do not fit in with the central ideas of this book). In the shady twilight of Japanese economics, as constructed in Mr Werner's active imagination, any BoJ governor who is not a "prince" is automatically a puppet.

The purpose of this group of "princes" is simple; they wish to achieve BoJ independence. What they do with that independence, or why they have so burning and destructive a desire for independence, is not explained anywhere in the text - independence at any cost is simply assumed as a sufficient objective in its own right. Everything in Japan can be rationalised by this, according to Mr Werner. The lost decade of the 1990s? A deliberate attempt to undermine the Ministry of Finance, orchestrated by the "Princes". The preceding boom? Part of the master plan, to create the recession of the 1990s, orchestrated by the "Princes".

The reader gets some warning of the nature of this theory, of course. Fully 10% of the bibliography is Mr Werner's own works (if you are going to be this "radical", it is hard to find supporting evidence other than that which you yourself have manufactured). Conjecture forms a large part of Mr Werner's evidence - "perhaps" the Ministry of Finance thought that foreign exchange intervention in the mid 1990s would be left unsterilised, for instance (it never had been in the preceding fifty years. Mr Werner does not suggest why the Ministry of Finance would have assumed so seismic a change in BoJ policy).

Where official statistics do not support the evidence (the money supply just will not co-operate), Mr Werner comes up with the neat trick of disregarding them and offering his own proxies that are tailored to fit. Qualified economists call this sort of activity "data mining".

Other objections to the central theory are ignored. Just how did the "Princes" managed to conceal their true intent from generations of academics, journalists, financial analysts, politicians, and not a few governors of the BoJ? Has the world really had to wait for someone of Mr Werner's intellectual prowess before the veil of ignorance can lift?

Mr Werner has a single, simple solution to the problem of an all-powerful BoJ. Nominal GDP targets will solve everything. Never mind that the quality of Japanese statistics is so poor even their own statisticians do not trust them. Never mind the fact that GDP is published with an impossibly long lag, and that monetary policy leads economic activity. Never mind that GDP is so frequently revised that what initially looks like strong growth can easily morph into recession when the statisticians have had a chance to review everything from a couple of years perspective. This, Mr Werner believes, will solve everything. The solution is as ludicrous as the premise on which the problem is constructed.

So why should this book be given shelf space in any library? It serves one useful purpose that I can think of. Japanese political and economic analysis has always been tainted by a certain extremism - fringe views that strive to exaggerate the uniqueness of Japan (to make Japan "more unique" than other countries). This work serves to remind seasoned Japanese observers of just how lunatic the "lunatic fringe" of Japanese analysis can be, when it sets its mind to it.



Packed with Knowledge!, 19 May 2004
This book should certainly be on every businessperson's reading list, and every legislator's, and every student's. It is a lucid, well-organized and admirably logical presentation of the role of innovation in capitalism, and the role of capitalism in innovation. Author William J. Baumol accomplishes something rare indeed by spanning the chasm between quantitative and qualitative economic writing. He has the verbal skill to write clearly and accessibly, explaining his points in plain if elevated and austere language, and illustrating them with interesting historical examples. His rigorous mathematical demonstration would satisfy the most demanding academic economist. Baumol's insight that capitalism's great achievement is to make innovation routine distinguishes this book from others on innovation, entrepreneurship and creativity. Although the lone inventor matters, ancient Rome and China had lone inventors and yet those empires did not produce economic growth on the scale that capitalism has produced it. Capitalism is distinctly productive because it makes innovation a self-sustaining and indispensable phenomenon, driving and driven by competition. We find this intriguing thesis well worth serious consideration.

Innovation - the important condition for industrial survival, 23 Jul 2002
Professor Baumol has written the definitive text upon the role of innovation in the economic process. Joseph Schumpeter wrote of waves of creative destruction that reshaped the face of industry - the spark of which is innovation. Clayton Christesen in the "The Innovators Dilemma" and Richard Foster and Sarah Kaplan in "Creative Destruction" built on those themes - in particular the vulnerability of incumbents to attack from outsiders.Baumol advances Schumpeter's cause by demonstrating that innovation rather than price competition is the central feature of the market process. He also highlights the present/future tension inherent in every business in that innovation is in itself a present cost to be weighed against uncertain future benefits. Innovation is, he argues, no longer undertaken as a means of securing extraordinary profits but as a means of preempting competition. In this way innovation becomes the most important condition for industrial survival.
The book is not pitched at the lay reader, nor however is it set in a snow storm of algebra.