The central thesis of The Permanent Problem, by Brink Lindsey, is that we are living through an historic transition in which capitalism has delivered mass prosperity but has not yet worked out how to deliver mass flourishing (providing meaning, purpose, belonging, fulfilment). In addition, the author argues that the very forces that created mass abundance, are now undermining the social and cultural foundations that are required for a fulfilling life. So, in Lindsey’s view, capitalism has largely solved the problem of material scarcity, but it has not yet solved – and may be making harder – the deeper problem of human flourishing. In so doing, Lindsey sets out a series of epochs and epic transitions, from a world of scarcity to a modern world of mass abundance and a future world of mass flourishing. But Lindsey is not certain, or indeed confident, that the world of mass flourishing will be attained.

Throughout, Lindsey emphasises that capitalism has succeeded on multiple fronts historically, delivering unprecedented affluence, together with freedom, health, longevity and education. He readily acknowledges the extraordinary achievements of capitalism. But he then fears we have hit a wall, because he asserts that capitalism is not well designed to deliver meaning, status, identity and relationships. He argues that prosperity itself creates destabilising effects in the form of consumerism weakening deep relationships, individualism undermining social bonds, collapsing fertility, a deterioration in mental health and the fragmentation of communities.

In his view, this creates a mismatch between rising expectations and actual lived experience, as we move up the hierarchy of needs from material provision to deeper psychological desires. The knock-on effect of this mismatch is, according to Lindsey, essentially a triple crisis: (1) a crisis of dynamism – with slower productivity growth, innovation bottlenecks and regulatory and institutional drag; (2) a crisis of inclusion – a widening class divide, especially by education, entailing a breakdown of family, community and social cohesion; (3) a crisis of politics – falling trust in democracy, rising populism and institutional paralysis.

The problem becomes permanent in the sense that there will be no return to scarcity, but affluence continually generates new expectations, frustrations and forms of dissatisfaction. Lindsey argues that solving the material problem does not eliminate human problems, it merely transforms them. His broad conclusion is that we need to refocus (to restore dynamism and innovation and remove barriers to growth such as rent seeking and regulation) and restore (strengthen communities and shift some functions away from markets and the state, towards civil society and personal relationships) capitalism in order to translate material abundance into meaningful lives. Essentially, he is arguing that economic systems are good at producing means (wealth, goods and services) but human beings ultimately care about ends (purpose, belonging, identity, love).

This is a rich, and indeed powerful thesis, taking a broad conceptual sweep of history. But is it true, and how should one approach it from a Christian perspective? Lindsey acknowledges that he is not a believer. But his thesis might appeal to many Christians due to it: (a) placing deeper psychological and spiritual needs above material considerations; (b) asserting that materialism has undermined more important values; (c) focussing on inclusion and the fragmentation of society.

However, whilst recognising the many fascinating insights contained in the book, I’m deeply sceptical of the thesis of The Permanent Problem for a number of reasons:

First, because from the perspective of Christianity – and of other faiths too - the root problem is not material but spiritual. The challenges of the human condition were never primarily about prosperity and so that was never going to solve them. The Bible teaches us that human striving and achievement in the material world will fail to satisfy. That failure to satisfy is attributable to a God-shaped hole in people’s lives, and whilst it cannot be filled by material abundance, neither can it be filled by flourishing either, if that excludes God. Mass flourishing ultimately requires a great awakening. Secular flourishing will never be enough. In economic terms, there is an omitted variable in the permanent problem model, namely God.

Secondly, there is a need to focus on the ethical formation of individuals. Christians for example would express this by saying that human nature is distorted by the Fall. The problem therefore is not just a matter of institutions, such as capitalism. Instead of blaming the sinner, fallen man repeatedly blames the system. Whilst Lindsey clearly recognises capitalism’s role in prosperity, he ultimately still blames the system. But capitalism alone was never meant to deliver the flourishing that he seeks. That flourishing comes from placing wealth creation in its rightful context, seeking first His kingdom and His righteousness. That is the route to meaning, purpose, identity and fulfilment.

Thirdly, the problems it attributes to capitalism are more likely the fault of the state. The 1980s saw the Gordon Gecko ‘greed is good narrative’ take root in the media. But the idea that capitalism as a system is based on greed and rampant individualism is erroneous. Capitalism is a system of voluntary exchange to meet the need for goods and services. Without doubt, to the extent that the Judaeo-Christian ethic and worldview have been withdrawn from the public square, capitalism has become an uglier process, but the problem is surely too little God, not too much capitalism. Less inclusion and more fragmentation are more a consequence of secularisation, as the Leviathan state forces the good Samaritan off the road, and in so doing has undermined social capital.

Fourthly, the state is undermining the very prosperity Lindsey takes for granted. The idea that prosperity is done and dusted, and we can take it for granted, may prove a triumph of hope over experience. The economics literature clearly sets out negative trade-offs between the size of the state (measured in terms of tax and spend, regulation and public debt) and economic growth. Trend output growth – based on supply-side potential – in many of the advanced economies is around 1% less than that of only a few decades ago. Statism and an ageing population promise to reduce this growth rate even further over the coming decades, with the mother of all fiscal crises potentially waiting for us at the end. Lindsey correctly identifies, and argues well, the need for far greater dynamism. But I fear he understates the significance and scale of the required reduction in the size of the state in order to facilitate this dynamism.

The Permanent Problem is an excellent book. It is thought provoking and challenging throughout, but its fundamental flaw is the same for all such works – in attempting to represent reality without reference to God, it seeks an external solution to an internal problem. Lindsey recognises that secularisation has been part of the problem, but he seeks to find meaning and community within a secular society. He sees the problem as social and institutional, not spiritual, so his solution is worldly and pluralistic. Those of us who are committed to the Judaeo-Christian ethic will respond that it is the solution to the problem he identifies.

‘The Permanent Problem: The Uncertain Transition from Mass Plenty to Mass Flourishing’ by Brink Lindsey was published in 2026 by Oxford University Press (ISBN 978-0-197-80396-7). 240pp.

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Graeme Leach is former Chief Economist and Director of Policy at the Institute of Directors. He is launching a new macroeconomic and geopolitical advisory firm, Global4cast, in May 2026. He has also written a new book, The Invisible Hand - God’s Radical Free Market, to be published in 2026.

Review by Akin Akinbusoye

Introduction

The question of whether artificial intelligence will help or harm ordinary people sits at the centre of some of the most consequential policy debates of our time. In Algorithmic Harm, the authors, Oren Bar-Gill and Cass R. Sunstein bring both rigour and accessibility to a subject that too often generates more heat than light. The book is neither a celebration of algorithmic innovation nor a counsel of despair. Its ambition is analytic: to identify precisely when and why algorithms cause harm, and to propose regulatory responses proportionate to those specific conditions. In that sense, it is a timely and disciplined intervention in a debate that is frequently distorted by ideological excess at both ends of the spectrum.

Summary of Argument and Content

The book’s organising framework is a distinction between two types of consumer markets. ‘S markets’ are populated by sophisticated consumers – those with sufficient information and the rational capacity to use it effectively. ‘U markets’, by contrast, are populated by unsophisticated consumers who either lack relevant information or are subject to behavioural biases such as unrealistic optimism, present bias, or availability bias. The authors are careful to note that this is a shorthand: when they speak of S and U consumers, they should be understood as referring to the likelihood of mistakes rather than fixed categories of persons. Nevertheless, dividing the analysis in this way allows them to advance a clear overarching conclusion: ‘algorithmic differentiation is generally beneficial in S markets but often harmful in U markets.’

The book is structured in three parts. Part I focuses on algorithmic harm in consumer markets and is the analytical core of the work, comprising seven chapters. These cover algorithmic price discrimination and its extensions, algorithmic targeting, algorithmically enhanced misperceptions, algorithmic coordination, race and sex discrimination and consumer-side algorithms. Part II turns to policy and law, addressing how regulators might intervene through disclosure mandates, algorithmic transparency requirements and a combination of ex post policing and ex ante regulation. Part III extends the analysis beyond consumer markets to labour markets and political markets, closing with a warning that democracy and self-government are also at risk and that the same framework of analysis applies.

The treatment of price discrimination is among the most sustained in the book. The authors demonstrate that where consumers are sophisticated, algorithmic price discrimination reduces consumer surplus while increasing overall efficiency. In U markets, however, the analysis shifts: the willingness to pay of unsophisticated consumers includes a misperception component, meaning that pricing algorithms trained on behavioural data may exploit distorted signals rather than genuine preferences. The Facebook example the authors cite is instructive here – a leaked internal document reportedly showed the platform identifying when young users felt stressed, defeated or anxious, and using those emotional states to micro-target advertising. This is algorithmic targeting at its most troubling: not merely personalisation, but the deliberate exploitation of psychological vulnerability.

The dynamic dimension of the argument is also significant. Over time, as sellers accumulate more data about consumers’ past behaviour, the degree of price discrimination increases. The authors flag the case of behaviour-based pricing (BBP), noting that consumers with lower willingness to pay – who are likely to be poorer – may, in some respects, benefit from BBP because lower prices allow them to enter markets they would otherwise be excluded from. The labour market chapter draws the parallel explicitly: employers, like sellers, are increasingly using AI to make or assist in hiring and wage-setting decisions, and the asymmetry of sophistication between employer and employee maps closely onto the seller-consumer dynamic explored in Part I.

On the regulatory side, the authors propose that policing algorithms – tools developed by regulators to monitor sellers’ pricing algorithms – could play an important role, noting that the actual number of commercially deployed algorithms is smaller than it might appear, with a handful of large technology firms and a small number of developers supplying the market. They also argue that regulatory approaches should be designed to remain relevant as technology evolves, rather than becoming obsolete with the next wave of innovation.

Critical Assessment

Bar-Gill and Sunstein’s analytical framework is genuinely valuable, and the S/U market distinction gives the book a clarity of argument that some of the writings I have read on AI and regulation lack. The progression from consumer markets through to labour and political markets is coherent, and the policy prescriptions – disclosure mandates, algorithmic transparency, and the development of regulatory policing algorithms – are grounded and reasonable.

Yet the framework has vulnerabilities that the authors do not fully reckon with. The binary of sophisticated and unsophisticated consumers, however carefully the authors caveat it, risks masking important gradations within the ‘sophisticated’ category itself. What an engineer understands about AI is not the same as what a product manager understands, which in turn differs from what a marketing executive understands. A consumer who is sophisticated about one domain of algorithmic activity may be significantly less so in another. The authors’ own observation that willingness to pay includes a misperception component is worth pressing further here: even informed consumers may suffer from confirmation bias or operate with bounded knowledge about rapidly shifting technologies. The disruption caused by DeepSeek’s emergence is one recent illustration of how quickly the landscape can shift beneath even technically literate observers. The ‘S consumer’ may be a more unstable category than the book seems to acknowledge.

There is also a structural assumption embedded in the analysis that deserves scrutiny. The behaviour-based pricing discussion largely treats consumer decisions as driven by willingness to pay and the presence or absence of misperception. But purchasing decisions are also shaped by circumstances entirely outside the algorithm’s model — emergencies, sudden changes in income or one-off windfalls. These exogenous shocks do not map neatly onto the S/U framework, and their exclusion risks overstating the predictive tidiness of algorithmic consumer profiling.

Questions and Observations

One question that lingers after reading this book is whether the regulatory architecture the authors propose is politically achievable within the currently flailing democracy systems, as it’s a generally known fact that governments play catch-up with technological advancements. The suggestion that policymakers develop policing algorithms to monitor sellers’ pricing behaviour is intellectually coherent, but it rests on assumptions about regulatory competence and political will that the current environment does not obviously support. In a context where major technology firms are significant funders of electoral campaigns and cultivate close relationships with elected officials, the appetite for robust algorithmic oversight may be structurally limited in ways the book does not confront directly. The authors recommend that regulatory approaches be designed to avoid obsolescence as technology evolves – a sound principle, but one that presupposes a regulatory body both technically capable and institutionally independent enough to keep pace with commercial AI development. In my opinion, that presupposition deserves to be stated and interrogated rather than assumed.

There is also a broader geopolitical dimension that sits largely outside the book’s frame. The framework is calibrated primarily to Western liberal market economies and the consumer protection traditions of the United States and European Union. How the analysis translates to emerging market contexts where regulatory capacity, data infrastructure, and levels of consumer digital literacy may differ is a question the book’s scope does not seem to address, but that a globally oriented reader will find pressing.

Recommendation

Algorithmic Harm is recommended reading for scholars of law, marketing, behavioural economics, business management/leadership and technology policy, as well as for policymakers and practitioners engaged with AI governance. Bar-Gill and Sunstein have produced a framework that is both analytically rigorous and practically oriented, and their extension of the consumer market analysis to labour and political markets gives the work a reach that elevates it above a mere academic work. Some readers will find the S/U binary simplistic, and the book’s engagement with the political economy of regulation could be deeper. But as a serious, evidence-based and accessible intervention in one of the defining debates of the present moment, this work appropriately contributes to contemporary discussions and deserves recognition within the field.

‘Algorithmic Harm: Protecting People in the Age of Artificial Intelligence’ by Oren Bar-Gill and Cass R. Sunstein was published in 2025 by Oxford University Press (ISBN: 9780197778227). 200pp.

Akin Akinbusoye is a PMP-certified IT Project Manager at HAP Consulting LTD with over 12 years of experience specialising in digital transformation, IT sourcing, and technology investment optimisation. His professional interests lie at the intersection of technology implementation, business strategy, business ethics, and the policy implications of algorithmic systems in organisational contexts.

Encountering Artificial Intelligence edited by Matthew J Gaudet, Noreen Herzfeld, Paul Scherz and Jordan J. Wales

Review by Naoise Grenham

What has Silicon Valley to do with Rome? One moves quickly and breaks things; the other holds fast to timeless tradition. One seeks to maximise utility; the other seeks to preserve human dignity. One pursues technological salvation in this life; the other patiently waits for divine salvation in the next. Founded in disparate worldviews, motivated by different objectives and driven by divergent incentives, the Artificial Intelligence (AI) hubs of San Francisco Bay seem a world away from the ancient halls of the Vatican.

And yet, it is in this wide, surprisingly fertile, plain that Encountering Artificial Intelligence: Ethical and Anthropological Investigations clears the soil, plants the seeds and gently waters the green shoots of ethical and theological insight that have begun to bloom into a fruitful dialogue between Catholic social teaching and the development and use of AI.

Through a series of learned, thoughtful and perceptive reflections, the authors of Encountering Artificial Intelligence shine light on the possibility of positive-sum games between tradition and innovation, human dignity and prosperity, and right relationship with God alongside technological advancement. Neither naively credulous nor narrowly cynical, there is acknowledgement of both the great gift of technological advancement for human flourishing as well as the reality of human fragility and the attractive temptation towards an idolatrous worship of AI.

Why Should the Catholic Church Discuss AI?

Encountering Artificial Intelligence is the first fruit of multi-year collaboration between the AI Research Group for the Centre for Digital Culture, part of the Holy See’s Dicastery for Culture and Education, and the Journal of Moral Theology. Formed under the shadow of the COVID-19 pandemic in March 2020, the A.I. Research Group gathered a range of North American theologians, philosophers and ethicists for a series of discussions over three years on the promises and pitfalls of AI for our common life and society. Between the four lead authors and sixteen contributing authors, a valuable breadth and depth of insight permeate the writing. Pleasingly, Encountering Artificial Intelligence is only the first of three volumes in this new Theological Investigations of Artificial Intelligence book series.

The stated objective of the collaborators is to promote dialogue between the world of faith and the world of technology, between a culture of Christian humanism and a culture of positivism, to better discern the ways in which to be most fully human in our increasingly digital world. The volume is presented as akin to an ‘instrumentum laboris’ (working instrument), which communicates a general Catholic consensus on the emerging issue of AI while leaving space for further dialogue and discernment. It is an example of the Catholic social teaching principle of subsidiarity in action: the Church, alongside the rest of civil society, has a critical role to play in supporting state and market to understand and respond to the crucial cultural, legal and political issues of our time.

The open-hearted and open-minded approach of Encountering Artificial Intelligence is guided by the influence of Gaudium et Spes (1965), visible from the first footnotes of the introduction. Promulgated by Pope Paul VI in 1965 as a principal document of the Second Vatican Council, Gaudium et Spes (Joy and Hope) called on Christians to integrate ‘new sciences and theories […] with Christian morality and the teaching of Christian doctrine, so that religious culture and morality may keep pace with scientific knowledge and with the constantly progressing technology’ (Gaudium et Spes, 62). Through engagement with a variety of scriptural, traditional and intellectual authorities (from the Book of Genesis and St Benedict of Nursia, to the writings of British mathematician Alan Turing and the American sociologist Sherry Turkle), the volume responds to the call of Gaudium et Spes with a truly catholic, as in universal, appetite for knowledge and wisdom in its attempt to analyse AI in an authentically Christian fashion.

A helpful introduction sets the scene, establishing the longstanding Catholic embrace of the mutual benefit of faith and reason and firmly stating the compatibility of religious belief and scientific progress. For less tech-savvy readers, there is a succinct summary of the historical development of AI and a neat primer on the key concepts. Thereafter, a brief but significant chapter addresses the various ethical approaches being taken to AI, from human rights-based perspectives to more utilitarian calculus.

The book is divided into two main sections: Anthropological Investigations and Ethical Challenges with AI. These represent separate but connected lines of enquiry: what does it mean to be human in an age of AI, and how can we best respond to the threats, challenges and opportunities presented by AI across our personal and professional lives?

Anthropological Investigations

The emergence of AI has raised some fundamental philosophical questions about the similarities and differences between human nature and the nature of AI. What is AI? What is AI not? What does it mean to be human?

A chapter on ‘AI and the Human Person’ uncovers the deep Christian understanding of personhood and intelligence. Made in the image and likeness of God, the human person is deeply relational and intuitively intelligent in ways that imitate the divine life of the Trinity, and which transcend any of the impressive capabilities of AI.

A deep exploration of ‘Consciousness’ demonstrates its necessity for human relationality and rationality and the limitations of mechanistic arguments for AI consciousness based on physiology, behaviour or functionality. Consciousness, properly understood, involves a full grasp of reality, which allows for the authentic mutual encounter of another person and participation in the divine life of grace.

‘Encounters with Seemingly Personal AI’ offers fascinating analysis of the complex relational dynamics between humans and AI. While the prospect of employing AI models as a ‘good enough’ substitute for a friend or romantic partner can be attractive, any truly authentic mutual encounter between a human and an AI agent is impossible, not least because of the impossibility of mutual vulnerability. The authors caution against the use of AI in caring contexts, especially the risk of moral and relational deskilling through the loss of opportunities to grow in the capacity to care for others.

An intriguing section on ‘AI and Our Encounter with God’ reveals the limitations of AI as a tool in sacramental or spiritual mediation. Rather than succumbing to idolatry of AI as an omnipotent and omniscient source of spiritual truth, there is a call to reclaim a providential vision of human creation and salvation in which AI can only play a more minor assisting role.

In the face of significant philosophical challenges presented by our interactions with AI, the authors mount a strong defence of the irreplaceable magnificence of humanity. Formed in the imago Dei (image of God), intended for a life of relational self-gift with others, and empowered by grace to participate in divine life, human beings are uniquely different from any AI programmes.

Ethical Challenges with AI

Having provided greater clarity on the nature and purpose of AI, the authors turn to the practical ethical problems and possibilities posed by these new technologies.

A strong defence of the relevance of Catholic social teaching to the treatment of AI starts this section. Catholic understandings of human dignity, subsidiarity and the common good are highlighted as helpful resources for understanding and responding to the signs of these new times. Particular attention is paid to the late Pope Francis’ influential critique of the so-called ‘technocratic paradigm’, especially the modern-day temptation to exploit human beings as machines of efficiency and optimisation.

An expansive entry on ‘The Promises and Pitfalls of AI in Contemporary Life’ showcases the upsides and downsides of applying AI across different domains. From the prospect of AI-improved diagnostic and treatment applications to the potential for unequal access to AI to further entrench educational inequities, a realistic Catholic vision of both the limitations of human nature and the limitation of technology allows for an effective cost-benefit analysis of the adoption of AI across various fields.

In closing, an engaging reflection on ‘Recommendations for an AI Future’ proffers practical advice on living and working well alongside AI in new and changing contexts. Notable recommendations include the importance of offline creative activities, prudent regulation to limit the harms of AI programmes, and the need to incentivise better behaviour in our digital culture.

Legacy

Encountering Artificial Intelligence is an excellent start to this new Vatican-led, three-volume series of theological investigations into AI. It should surely serve as an essential textbook for Christian, and non-Christian, students of AI anthropological and ethical questions. The chapters themselves are worthy of standalone treatment, especially the rich anthropological reflections of ‘Encounters with Seemingly Personal AI’ and the extensive ethical coverage of ‘The Promises and Pitfalls of AI in Contemporary Life’. While these sorts of publications may typically tend to be of greater interest and importance to an internal Christian audience than an external secular audience, there is no reason why technologists, entrepreneurs and investors would not find some value in reflecting on these philosophical and ethical matters.

The impact of Encountering Artificial Intelligence has already been felt in the Catholic world, not least through its clear influence on the form and content of the landmark Vatican publication on AI, Antiqua et Nova: Note on the Relationship between Artificial Intelligence and Human Intelligence, which was published the following year in January 2025. Naturally, much more remains to be said in several areas of AI ethics. The emerging threats of AI hallucination and deception, the practical and economic effects of AI on the creative industries, and the ways in which our use of AI may reshape our methods and models of thinking, writing and communicating each merit closer attention.

Although Pope Leo XIV now carries the baton for the development of the Catholic Church’s engagement with AI, the influence of the late Pope Francis’s theology of encounter, which runs throughout this volume, is likely to loom large. As the late Pope Francis emphasised, there is a profound and persistent human desire for the ‘truly real’, which can ultimately only be experienced through authentic mutual encounter with another thinking, feeling and loving human being (Pope Francis, Fratelli Tutti, 33). Given that the phenomenon of ‘AI companionship’ seems to be growing from strength to strength, not least in its promise of risk-free relationships, there will be an equal and opposite need for the Church to communicate the enormous and irreplaceable value of risky but rewarding human-to-human relationships compared to the simulated substitutes supplied by AI models.

There is no shortage of AI coverage and commentary at present. Predictions, prognostications and prophecies of the future impact of AI abound in plentiful supply. Yet amid the heat of ever-evolving debate over job losses, regulatory options and corporate liabilities, there can sometimes be precious little light of insight. Here, through cohesive anthropology and coherent ethics, is where Encountering Artificial Intelligence bears fruit.

‘Encountering Artificial Intelligence: Ethical & Anthropological Investigations’ by the Dicastery for Culture and Education of the Holy See was published in 2024 by Pickwick Publications (979-8-385-21028-2). 274pp.

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Naoise Grenham is a senior policy and research analyst for the Catholic Bishops’ Conference of England and Wales, where he advises Catholic bishops in areas of artificial intelligence, criminal justice reform and healthcare. He is one of the inaugural Edington Fellows of the Prosperity Institute in Mayfair, London, and serves as a Trustee for the national Catholic domestic charity, Caritas Social Action Network (CSAN).

In many areas of our lives, we join associations or engage in activities where there are rules that impose limits on or direct our behaviour. To give one example, over 7 million people are members of 40,000 football clubs, all with their own rules which are, in turn, regulated by the Football Association (FA). The FA, in turn, is a member of UEFA and FIFA with their own rules systems. There is, in the jargon, polycentricity or nested rules systems.

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However, over time, the role of the state in regulating our lives has increased and the role of other bodies has reduced. Even football is now regulated by a government regulator.

By way of another example, we often think of the 1980s as a period of deregulation of financial markets. In 1986, there was an episode called ‘big bang’. This is often wrongly described as ‘deregulation’. In reality, the regulatory powers of a private body, the stock exchange, were radically curtailed after 300 years of independence, and they were replaced with a bureaucracy accountable to the Treasury. The scope of bureaucratic rulemaking in financial markets has increased exponentially ever since.

Our lives are now dominated by regulation from one source – central government. Even local government effectively acts as a set of Whitehall branch offices. When institutions do have some form of independence from the state, instead of this being regarded as normative, it tends to be regarded as a privilege, as if the state has a natural right to order our social, civic, professional, economic and family life. And there is always a threat hanging over quasi-independent institutions that they will have their independence snuffed out by the state – for example, when it comes to teaching about sex and religion in Catholic schools. And the remaining independence that universities, schools, professions, sports associations, and so on, have is radically tempered by employment regulation, equalities regulation and regulation that purports to promote human rights but, in reality, curbs freedom of association.

Pope Benedict produced a papal encyclical in 2009 in which he identified these problems, writing: ‘The exclusively binary model of market-plus-State is corrosive of society, while economic forms based on solidarity, which find their natural home in civil society without being restricted to it, build up society.’ This is surely true. And David Thunder’s excellent book, The Polycentric Republic: A Theory of Civil Order for Free and Diverse Societies, provides the antidote.

Thunder identifies the problem of the all-powerful centralised state as lying with classical theories of government in which the individual gives a monopoly of power (or coercion) to the state to keep order with the aim of promoting a peaceful society and preventing a ‘war of all against all’.

Thunder does not base his case for a system of decentralised governance on the principle of individual freedom but on the ability of such a system to promote flourishing and the practice of the virtues.

Thunder divides institutions of governance into two types: enterprise associations and civil associations. The former are not necessarily related to commerce and business, but they would be non-territorial. They would include professions, sports associations, universities, securities exchanges, and so on. Civil associations would be territorial in nature. Most powers in civil associations would be held at local level. The national political community would obtain its authority not just from a franchise of individual voters, but also from the lower-level civil associations and the enterprise associations: authority would flow upwards and not downwards. Interestingly, in some respects, the City of London operates on such a basis. Enterprise associations would be constrained by the right of exit. Civil associations would be constrained by the wide dispersion of authority.

In terms of philosophical outlook, the title of the book makes a clear nod towards Elinor Ostrom. Her Nobel Prize winning work showed how systems of governance which disperse authority with multiple layers and institutions adjusting to each other, evolved naturally in situations where economists and political scientists believed that centralised political control was often necessary.

There is an admirable chapter in the book which deals with possible objections to Thunder’s approach. But perhaps, there are a few other questions that could be considered. Firstly, reading this book from a UK perspective, one might be tempted to ask why he could not base his case on individual freedom and freedom of association. Until the growth of the centralised state from 1914, Britain had a huge network of self-governing institutions, many of which had developed over the previous 50 years. Local government was pretty autonomous too. Indeed, a Select Committee of inquiry into the stock exchange was able to conclude in 1878 that it was ‘capable of affording relief and exercising restraint far more prompt and often satisfactory than any within the read of the courts of law’. That is a pretty strong endorsement of forms of regulation that grow out of the market and civil society through enterprise associations.

Sporting associations also flourished. Indeed, it is worth noting that, in the case of football, three entirely autonomous rule-making bodies developed with very different organisational structures (association football, rugby football league and rugby football union). There was order, but also competition between rule-making bodies. A world of free, rule-making bodies in the context of a limited state is exactly what classical liberals would like, and it is what David Thunder wants too. So, the first challenge to Thunder is to ask why he does not join the queue of people who would simply like to go back to a smaller state.

The answer to that is that Thunder’s justification is different. His justification relies on creating a society in which we can all flourish and not one which simply maximises freedom, including freedom of association to form rule-making bodies. Pope Leo XIII, in 1891, published a strong defence of the family and private associations in Rerum novarum and argued that the state should protect the family and such associations and not interfere with them. His starting point was that of natural rights – we are born into a family, and society and the state should protect the family and society. But this perspective was also based on the need for society to flourish. Perhaps freedom and flourishing are best thought of as complementary arguments and so Thunder adds a new dimension to classical liberal arguments for a limited state.

And there is also the challenge, which Thunder does raise, that enterprise associations can be monopolistic and exclusive. I discuss this issue in a variety of papers, including, for example, an article ‘Private regulation versus government regulation: The example of financial markets’ Economic Affairs, 42(1), 30–49. In this respect, David Thunder refers to the Hanseatic league positively. But that organisation was extremely cartelistic. The Test and County Cricket Board (TCCB) was taken to court in 1977 for banning cricketers who played for an Australian entrepreneur, Kerry Packer. The TCCB lost. I disagree with the court decision, but we have to accept that a return to a world in which there is much greater diversity in rule-making institutions may lead to the restrictive practices that used to dominate economic life. That said, economic life today is dominated by state occupational licensing and government regulation of professions that restrict entry on arbitrary criteria.

I hope that David Thunder’s work will widen the constituency of people who believe in a limited state and dispersed competing forms of governance. Those of us who believe in a limited state but the maximum possibility for civil society structures of governance to emerge tend to be dismissed as ‘neo-liberal’ in a lazy misrepresentation of our views. But with his focus on creating a system of governance in which people can flourish and practise the virtues, David Thunder should avoid any such allegation, at least from interlocuters who exhibit a generosity of spirit and a genuine desire to engage with his arguments.

In the final chapter, David Thunder states that he hopes that the polycentric, federalist approach that he lays out provides a useful theoretical paradigm in which the future of our governance arrangements can be discussed. He has achieved that objective. His approach should be widely discussed and developed. It should be read by students on university politics and political economy programmes and by those who seek to influence the climate of opinion. It certainly should be of interest to Christians. Thunder states in the penultimate chapter that his purpose is to ‘stimulate our moral and political imagination with a view to stimulating institutional and cultural reform.’ This he does.

‘The Polycentric Republic: A Theory of Civil Order for Free and Diverse Societies’ by David Thunder was published by Routledge in 2024 (ISBN: 978-1-032-88889-7). 196pp.

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Philip Booth is professor of Catholic Social Thought and Public Policy at St. Mary’s University, Twickenham (the U.K.’s largest Catholic university) and Director of Policy and Research at the Catholic Bishops’ Conference of England and Wales. He is also Senior Research Fellow and Academic Advisor to the Centre for Enterprise, Markets and Ethics.

Written by two professors of finance (at HEC Paris and the MIT Sloan School of Management, respectively), this book considers the connection between economic thought and moral values, and the fact that they frequently come into conflict. Through a series of chapters on different issues, it focuses on the need for our moral decisions need to acknowledge their own costs – whether direct monetary costs, or simply the costs that arise in consequence of choosing one path over another – while economic analysis needs to acknowledge more fully the moral aspects inherent in any problem. This requires a willingness to include economic reflections in our moral thinking, but also a preparedness in economics to look beyond the default position of economic analysis – a utilitarian aggregation of pleasure, economic gain or material wellbeing – acknowledge its shortcomings and consider other moral perspectives.

The first two chapters set up the book, pointing out that we often separate economic thinking from moral thinking, as though economic thought has a corrupting influence on or no place in ethics. As the authors remind us, however, too often real life forces us to engage in both (for instance when deciding how to allocate resources in healthcare settings). They trace the emergence of utilitarianism as a central part of economic analysis, which, in its aggregation of ‘wellbeing’ or ‘pleasure’ also appears to make room for moral concerns, provided these are approached from a consequentialist perspective. Following a critique of utilitarianism, the book examines the shift in economic thought away from seeing people as self-interested and towards a recognition of altruism in human decision-making and policy-making. Nevertheless, the authors contend that in its treatment of ethics, economics still assumes a consequentialist outlook, continues to see human-beings as essentially selfish and views altruism as a form of universal or impartial utility-maximisation – all of which is open to question and does not appear to be supported by existing social scientific research into the ways in which people actually approach moral questions.

The point therefore emerges that greater recognition of ‘value pluralism’ is required: an acknowledgement that people do not typically think and behave as economics tends to assume, even when it takes account of moral considerations. As such, the authors state their intention of raising a series of dilemmas with a view to inviting readers to consider a range of responses, which draw on various philosophical positions beyond utilitarianism, as well as survey results, to show the trade-offs involved in each case and shed light on how people do in fact think.

Each subsequent chapter addresses a particular issue, covering liberty, competition and rents, justice, globalisation, cultural goods, companies and corporate virtue, and responsible investment. The treatment of each issue tends to differ. In some chapters, the authors outline a fairly characteristic approach from within economics and then subject it to criticism, showing that in their actual thinking, people do not tend to bear out the wisdom of the discipline but in fact have other legitimate concerns. For example, Chapter 6 examines the many reasons for which the population at large does not necessarily adhere to the general approach within mainstream economics that favours globalisation. This might not be because the public is simply bigoted or ignorant of the net benefits of free trade or migration, but because people have in mind not so much their own economic self-interest as concerns about socio-cultural and moral issues.

Other chapters, such as those on responsible investing or ‘beauty’, offer a more general discussion of relevant economic and non-economic considerations, and the trade-offs that have to be faced. Chapter 7, for instance, is concerned with cultural goods such as art and nature, and examines the ways in which we tend to view them not for their utility as consumption goods, but as having a value in their own right. This is a very interesting chapter that presents more in the way of philosophical discussion of our relationships with nature, heritage, science and the arts, closing with some reflections on possible cultural policy and the nature of the decisions that we might sensibly be expected to consider in relation to cultural goods.

This is not to say that chapters clearly follow one of two models but readers who begin the book expecting to find in each chapter a sustained discussion of ‘economic’ utilitarianism, deontological ethics and virtue ethics in relation to a specific issue, are likely to be disappointed. Instead, the book draws on these different approaches as they appear relevant to the direction of the discussion in hand. This approach does work but some might be of the view that this is not what they had come to expect from reading the introduction – but neither is the book a straightforward critique of the assumptions of economics. Indeed, the authors are keen to point out that they have themselves often argued for the positions that they subject to criticism – for instance in support of free trade – so in no sense is the work a rejection of the methods and models of economics as a discipline.

One or two chapters (particularly Chapter 5, on justice) probably attempt more than the space available allows, with the result that some of the discussions (such as the one on algorithms) are left somewhat short and leave the reader wondering what the purpose of their inclusion really is. Nevertheless, the book is clearly written in engaging prose and the purpose is clear: to call for ‘value pluralism’ in our consideration of important questions and to urge economic analysis to engage more fully than it currently does with the kinds of moral concerns that will often shape our thinking. This occupies more space in the book than the argument that our moral thinking needs to allow greater room for economic considerations, such that the subtitle (The Economic Limits of Moral Life) is arguably the wrong way round, but the book has much to recommend it. Importantly, in stressing ‘the need to understand and incorporate diverse perspectives on moral-economic trade-offs,’ the authors draw attention to the implications for public discourse. As they point out, such a ‘pluralistic approach acknowledges that different persons may prioritize different, yet equally legitimate, values, such as freedom, justice, tradition, or economic efficiency,’ adding that the ability to recognise ‘various moral perspectives on economic issues facilitates discussions about difficult choices’ (page 162). The book leaves open the question of how to balance these differing values and reach a consensus when they come into conflict or when policies are unpopular, but in calling for value pluralism, it represents a first step in making these conversations possible. It is certainly to be recommended to those interested in the relationship between economic analysis and moral reflection.

‘The Price of Our Values: The Economic Limits of Moral Life’ by Augustin Landier and David Thesmar was published in 2025 by The University of Chicago Press (978-0-226-82708-7). 191pp.

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Neil Jordan is Senior Editor at the Centre for Enterprise, Markets and Ethics. For more information about Neil please click here.

In one of the many mansions of today’s obsession with ‘neoliberalism’ resides a long-running debate about the nature and role of the corporation. Those arrayed on one side of the debate argue that stockholders do not own the corporation – all they own are their own shares – and that corporations should (perhaps consequently) be managed in the interests of a wide variety of ‘stakeholders’. At the other table sit those who believe that, as possessors of the residual rights of control, shareholders are indeed the owners of the corporation and that corporations ought (perhaps consequently) to be managed so as to create the most value for the shareholders. In Company Men, Sean Thomas Delehanty promises to illuminate this debate through an intellectual history of the shareholder-value idea. Unhappily, he is more successful at throwing shade than at throwing light.

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On the plus side, the book is well written, and it covers a lot of the right ground. Emerging from Delehanty’s dissertation at Johns Hopkins, it is an attempt to craft the kind of intellectual history of free-market thinking that his advisor Angus Burgin achieved in his important study of the Mont Pèlerin Society. But unlike his mentor, Delehanty is unable to sublimate his own strongly felt ideological position. The result is not only ideological bias – which is common enough, and fair enough with a good argument – but also, in this case, an overall shallowness.

The shareholder-value debate has deep roots, but Delehanty focuses on the modern-day fons et origo of the idea that corporations should be run in the interests of shareholders, a wildly influential 1976 paper by Michael Jensen and William Meckling. Delehanty rightly sees this paper as an attempt, by two free-market-oriented, Chicago-trained economists, to develop the ideas in a famous article by Milton Friedman: that the only ‘social responsibility’ of business is for employees to pursue the goals of the firm’s owners within the constraints of legal and ethical norms. (That would usually, but not always, mean making as much money as possible.) Jensen and Meckling recognized that this implied what economists were coming to call a principal-agent problem. Employees would very likely arrive at work with their own goals, which they could typically pursue at the expense of the goals of the owners.

Jensen and Meckling made this agency problem the centerpiece of their theory of the firm – an attempt, as they saw it, to open up the black box of the firm as portrayed in conventional price theory. On the one hand, the separation of ownership from control in the modern public corporation had untethered the provision of capital from personal supervision, thus unleashing the massive real capital flows that underpinned economic growth. But on the other hand, the agency relationship had its own costs, in response to which firms had generated organizational responses that economists could study. The 1976 paper would become a landmark – though by no means the last word – in the economics of organization, a subfield that was beginning to gain traction in the 1970s.

Delehanty chooses to read the Jensen and Meckling paper, and indeed all of their (mostly Jensen’s) work, as nothing more than ideological weaponry, ‘part of their broader political project of protecting capitalism from democracy. A commitment to shareholder value maximization insulated businesses from the kinds of democratic pressures Jensen and Meckling warned about in their political work, which in turn had a profound effect on the nation’s political economy’ (page 61). As a result, Delehanty never engages with Jensen’s intellectual contributions in any substantive way.

Did the ideas of Jensen and Meckling have ‘a profound effect on the nation’s political economy’? The economic historian Deirdre McCloskey has warned against conflating what she calls think-history with do-history. Good intellectual history must surely engage with the events of the world in order to understand the evolution of thought. Similarly – but with far more difficulty – good economic history must confront ideas as it chronicles events and unearths the economic forces that operate behind events. But it is all too easy to depict a think-history as if it were causative of do-history. Although he occasionally backs off and portrays Jensen’s work as merely ‘justifying’ the movement for shareholder value, Delehanty sometimes seems, especially in an impassioned conclusion, to want us to believe that Jensen’s ideas are largely at fault for the increasing ‘financialization’ of the economy in the late 20^th century, which is in turn largely at fault for a litany of what the author believes to be society’s ills.

The U.S. economy was already on the road to financialization early in the twentieth century. But, as I have argued, wars, depression, and the New Deal effectively de-marketized the economy for much of the middle of the century, giving comparative advantage to the large corporations as a locus of economic institutions and to their managers as arbiters of capital allocation. Managerialism continued after World War II, which had bolstered the capabilities of American corporations while destroying their foreign competitors. This was a stable era that saw the slow consolidation of the innovations of the second industrial revolution. Many now look back on the post-war period with nostalgia, even though most segments of American society are far better off today in material terms – and even though critics once complained about the depredations of managerialism in the same loud tones they now use to complain about financialization.

By the 1960s, large American firms were earning economic rents, which appeared to managers in the form of what Jensen famously called free cash flow. Rather than returning those rents to stockholders in the form of dividends, managers acquired firms in wholly unrelated lines of business, creating the conglomerate. (Significantly, conglomerates are in a sense a manifestation of both managerialism and financialization: managerialism because the managers not the market were making decisions about capital allocation; financialization because managers acquired assets in financial transactions rather than developing them internally.) This turned out to be as inefficient in practice as it is in theory, and entrepreneurs arose to unbundle the conglomerate by buying up stock and attempting to unseat the incumbent management, often forcing the selloff of the unrelated divisions. Thus was born the era of the takeover, both hostile and otherwise, which picked up pace over the next decades with the emergence of strong foreign competition and a dramatically changing macroeconomic environment. The assault on the conglomerate both initiated and benefited from the rapid development of external financial markets, which had been a sleepy, clubby sector in the middle of the century.

Delehanty tells much of this story, often in the same terms I have used. But in his account the events of economic history fly by like Burma Shave signs, leaving little real effect. All that seems to matter are the ideas of Jensen, who did indeed provide an intellectual framework for understanding how the market for corporate control created value in the economy. It shouldn’t be surprising that financialization created value, even despite the dramatic (and by no means waste-free) forms it took at the height of hostile takeovers. Handing the task of capital allocation off to a specialized industrial sector brings to bear many more perspectives and much more knowledge than is available to managers for internal decisions, and this is true even if one believes in only the weakest forms of the efficient-markets hypothesis.

What about the terrible effects of financialization? Jensen and others marshaled empirical evidence that takeovers did not reduce overall employment, investment, or R&D but had significantly increased productivity. Delehanty sees these as merely ideological efforts to ‘fully leverage the argumentative power he could gain from claiming the mantle of “scientific” research’ (scare quotes original). Like Nicholas Lemann, whose marvelous if often problematic Transaction Man covers much of the same ground as this book, Delehanty lays the blame for late-century deindustrialization and job loss on financialization while actually using as examples industries – like steel and automobiles – populated by the most managerial and least financialized firms in the economy.

So how important to the events of economic history were the ideas of Jensen and fellow proponents of the shareholder-value theory of the firm? It is certainly true that these ideas were influential. Raiders like T. Boone Pickens could be heard talking about the problem of free cash flow. But would events have moved along much the same path if these ideas had never been uttered? Company Men doesn’t take us much closer to an answer.

‘Company Men: The Invention of Shareholder Value and the Splintering of the American Economy’ by Sean Thomas Delehanty was published in 2025 by the University of Chicago Press (ISBN: 978-0-226-82718-6). 272pp.

Richard N. Langlois is Professor of Economics and Head of the Department of Economics at the University of Connecticut. He is the author of The Corporation and the Twentieth Century: The History of American Business Enterprise (Princeton University Press 2023).

Christopher Jones has a straightforward thesis. Economists invented the concept of infinite economic growth which makes unsustainable demands on the natural world. As the global economy grows, so does the negative impact on the environment. More activity means more pollution and harmful climate changing emissions. The only way to live on the planet in a genuinely sustainable way is to accept limitations in economic growth. Few would dispute the idea that there is a real tension between the level of economic activity and the impact on the planet, although innovations have allowed greater consumption with less environmental impact. There is little merit in increasing wealth if the result is a planet which can’t support the current level of human life. John Stuart Mill’s hope that abundance would lead to better lives as focus moved to the good from the useful remains an attractive prospect.

The strengths of this work are also its limitations. Jones covers in detail the history of academic American economics. For those interested in how the ideas of Simon Kuznets, Paul Samuelson, Robert Solow, Joan Robinson, William Nordhaus, Paul Romer and many others relate to each other, this provides a useful guide. Jones explains clearly how the tension between the desire for economic growth and sustainability have been explored from Malthus and Mill to ecological economics and green growth. He is particularly strong in exploring the way that the school that developed around Robert Solow and Paul Samuelson at MIT, and their models which sought to analyse the factors which account for economic growth, came to dominate academic economics. He focuses on the development of GDP as the key metric for national economic activity and how it has come to be a key element in political discourse. Jones provides a useful reminder of the history of global attempts to reduce global warming from the enthusiasm of the Earth Summit in Rio de Janeiro in 1992 to the disappointments in the same city twenty years later. He concludes that the ‘fixation with growth instead of better lives and healthy ecosystems is apparent in sky-rocketing levels of inequality’ and that ‘growth must give way to degrowth’.

This analysis may be more persuasive to an American audience with high incomes. However, given that environmental concerns are global, his rather parochial approach is problematic. Narrowly, one may wonder if Jones is inclined to exaggerate the role of academic economists. Whether they ‘invented’ the idea of growth being infinite or rather sought to explain the evident step change in global economic performance after the industrial revolution is less important. More significant is the failure to engage substantively with the experience and perspective of the majority of the world’s population in Asia. While Jones bemoans increasing inequality in America, he gives no attention to the astonishing reduction in poverty in Asia, for instance.

He recognises that the arguments for ‘degrowth’ have received little support from mainstream economists but shows little interest in why this is the case or in how his ideas would be put into practice. He calls for growth to be ‘targeted to those who need it most, and away from those who do not’. That may be hard to disagree with in principle, but we hear nothing as to how this objective would be achieved apart from vague calls for more focus on how wealth is distributed. With egalitarian redistribution the world economy would have to quintuple for every person on the planet to be as well off as the average Dane. For every person to reach the line of poverty in the developed world ($30 a day), the world economy would have to double. ^[1]

Moreover, the author’s focus on America seems to blind him to the impact of economic growth elsewhere. Jones completely fails to engage with the crucial question of how an affluent global north can expect a relatively poorer global south to deny themselves the benefits of economic growth. It might be unrealistic to expect an answer, but to fail to recognise such a key challenge undermines the value of this work. It is particularly disappointing that Jones describes the argument for ‘degrowth’ as being straightforward. It may appear so from an American perspective, but perhaps much less so for those still emerging from poverty.

The economics of comparative advantage have been demonstrated on a global scale by the transfer of manufacturing activity from higher cost American and European economies to those with cheaper labour in Asia. This aspect of globalization has been an engine for significant improvements in living standards for those employed and cheaper goods for consumers (perhaps especially the poorest Americans). This has caused dislocation and distress in communities (comparatively wealthy communities in an international context) which have seen factories close, but Jones has little to say about these trade-offs.

By contrast, he is concerned about growing inequality in America, although unusually, he seems rather to assume this and does not provide a reference in support of his assertion. (Andrew Lilico’s review of The Myth of American Inequality by Phil Gramm, Robert Ekelund and John Early is interesting in this regard.)

This focus on America finds expression in a weakness in dealing with the rest of the world. Citing a 1988 article by Robert Lucas, Jones claims that India’s economy, from the perspective of 1980, ‘had grown only 1.4 per cent over the preceding two decades’. Lucas in fact suggests that ‘rates of growth of real per capita GNP’ had averaged 1.4% per year over that period. This may be no more than a lack of attention to detail, but it does not encourage confidence. The same is true of a suggestion that the elder Malthus was alive in the 1970s. For a work by an academic, this book is rather uneven in quality and perhaps not the ‘scholarly miracle’ claimed by J R McNeill in a blurb for the book.

The book is strong on the way that ideas around the tension between growth and the natural world have developed but disappointing in adding nothing useful to the debate on how our generation should approach these issues. There is arguably little merit in reducing economic activity and the related emissions in America and Europe if they are simply to be exported to Asia. To suggest that accepting the end of economic growth is straightforward, while not at least recognising that this is unlikely to be accepted by much of the world, reduces the value of the work. If the reader is interested in the history of the study of economics in America, and the way that thinking on the tension between economic growth and the environment has developed, this book contains much useful material. The suggestions for change are perhaps less compelling.

‘The Invention of Infinite Growth: How Economists Came to Believe a Dangerous Delusion‘ by Christopher F. Jones was published in 2025 by University of Chicago Press (ISBN: 978-0-226-72204-7). 376pp.

[1] See Ritchie, H. (2024) Not the End of the World: How We Can Be the First Generation to Build a Sustainable Planet. Chatto & Windus. Pages 34-5.

Andrew spent his career with PricewaterhouseCoopers where he was a partner for more than 25 years. He led a variety of the firm’s businesses both in the UK and globally, with a focus on the pharmaceutical industry. He also led the firm’s work on explaining corporate taxation to civil society and the public. Since retiring from PwC he has completed a master’s in history at Oxford and is hoping to undertake further research. He is also a trustee at the London Handel Society and the Open Spaces Society.

On Liberalism: In Defense of Freedom

Cass Sunstein has written what may be the most lucid and unembarrassed defense of liberalism in recent memory. On Liberalism is at once a philosophical meditation, a political testament, and a quiet act of intellectual recovery. In an age when the word ‘liberal’ is either wielded as an accusation or whispered with apology, Sunstein offers something rare: a confident, humane, and historically informed affirmation that liberalism remains the best moral and political framework we have.

‘Festschrifts’ may be uneven, but manifestos rarely are—and this short, tightly reasoned book is nothing if not a manifesto. Sunstein begins from the premise that liberalism, properly understood, is not the ideology of any faction but a moral vision grounded in freedom, equality, and dignity. ‘Liberalism is a big tent,’ he writes, ‘but it is also a fighting faith.’ His is a creed of pluralism and restraint, of reasoned disagreement and institutional humility. Throughout, his tone is that of the patient teacher rather than the polemicist: confident without arrogance, passionate without bitterness.

A Catechism of Liberal Virtues

Sunstein structures his argument around six cardinal principles: freedom, pluralism, security, equality, the rule of law, and opportunity. Each principle receives a concise yet profound exploration, enriched with historical insight and contemporary resonance. This is no abstract taxonomy; it reads more like a meditation on civilization itself. Sunstein insists that these values were not conjured from ideology but forged through centuries of moral conflict and political experiment. They are, he reminds us, ‘the slow achievements of human decency.’

He returns repeatedly to his intellectual hero, John Stuart Mill, whose On Liberty becomes for him the liberal catechism. Sunstein’s Mill is not the sterile rationalist of caricature but a passionate moral romantic, convinced that individuality is the flame that sustains civilization. The passages on Mill’s courage—his insistence on defending free thought even when it scandalized his age—are among the most stirring in the book.

Hayek and Rawls also make appearances, not as combatants but as partners in conversation. Sunstein treats Hayek’s spontaneous order and Rawls’s distributive justice as complementary rather than contradictory. This capaciousness of spirit is one of Sunstein’s chief virtues. He refuses to reduce liberalism to a party platform. Like Mill’s, his liberalism is both moral and experimental: an ongoing inquiry into how human beings can live together without coercion and with dignity.

Freedom, with Seatbelts

What distinguishes On Liberalism from other recent defenses of the creed—Fukuyama’s or Pinker’s, for instance—is its realism. Sunstein’s liberalism is neither sentimental nor technocratic. It is, in his own phrase, ‘freedom with seatbelts’: confident in human agency but mindful of its limits. The author of Nudge remains attentive to the psychology of choice, arguing that freedom is not mere non-interference but the cultivated ability to make good decisions within a just and enabling framework. Markets, he insists, are indispensable to liberty, yet they must be tempered by law and animated by conscience.

This realism extends into his treatment of governance. The discussion of Franklin D. Roosevelt’s ‘Second Bill of Rights’ is exemplary. Sunstein interprets these social and economic rights not as a betrayal of classical liberalism but as its completion, a recognition that liberty without security can be a cruel illusion. Here his liberalism proves both moral and muscular, insisting that compassion and competence are not opposites but allies.

The Spirit of Generosity

What gives this book its particular charm is its tone: Sunstein writes as a moralist in the best sense—not to lecture, but to elevate. Quoting Germaine de Staël’s call for ‘a lever against egoism,’ he suggests that liberalism, rightly understood, is an ethic of generosity. Freedom requires self-restraint; tolerance is not indifference; civility, far from weakness, is a civic virtue.

He is at his most eloquent when he turns from theory to temperament. Liberalism, he argues, is not only a political creed but a psychological posture: a preference for conversation over coercion, persuasion over purity, humility over hysteria. He concludes one reflection with Rawls’s understated line from A Theory of Justice: ‘Purity of heart, if one could attain it, would be to see clearly and to act with grace’—a sentence he takes as the very essence of the liberal spirit.

A Liberalism for the Twenty-First Century

The later chapters engage the challenges of our present age: populism, nationalism, digital tribalism, and the collapse of trust in institutions. Sunstein does not scold; he reasons. Liberalism, he concedes, has sometimes seemed weary or complacent. Yet its promise remains the most humane path between authoritarian discipline and revolutionary fervor. What is needed, he suggests, is ‘freedom with fire’—a moral energy without moralism, conviction without cruelty.

In his closing ‘Epilogue: Fire and Hope,’ Sunstein sounds almost pastoral. Liberalism, he writes, ‘is not a creed of cold reason but of faith in improvement—faith that reason and decency can coexist.’ That faith may seem quaint today, but Sunstein wears it with sincerity and grace. His optimism is not naïve; it is hard-won.

The Trouble with Liberalism (and Why It’s Still Worth It)

And yet, the reader may feel a lingering unease. Liberalism’s problem has never been its ideals but its optimism—that freedom and equality, individuality and solidarity, can always be harmonized. Sunstein’s ‘big tent’ sometimes feels like a moral circus: everyone is welcome, provided they follow the rules. Liberalism’s greatest temptation is procedural perfection, the belief that decency can replace depth. When politics becomes mere management and conscience mere sentiment, something vital withers.

Still, this is not an external critique but a filial one. Sunstein himself acknowledges liberalism’s contradictions as inseparable from its vitality. On Liberalism is both defense and confession: an admission that the creed is perpetually unfinished, forever balancing liberty and order, reason and passion. The miracle, he suggests, is not that liberalism has survived its crises—but that it continues to offer a vocabulary of hope in an age of exhaustion.

On Liberalism is not a book for cynics or ideologues. It is a work of intellectual courage, written with clarity, warmth, and historical intelligence. Sunstein’s liberalism is moral without moralism, rational without reductionism, principled yet pragmatic. The book deserves to be read by anyone who believes that the center of civilization is still worth defending—not because it is safe, but because it is, however precariously, free.

In the end, Sunstein’s liberalism is less a political doctrine than a moral temperament: a quiet faith that humanity is improvable, that reason can temper rage, and that freedom, properly tended, can still burn bright—without burning down the house.

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‘On Liberalism: In Defense of Freedom’ by Cass R. Sunstein was published in 2025 by The MIT Press (978-0-262-55018-4). 186 pp.

Jan C. Bentz is a lecturer and tutor at Blackfriars in Oxford, and an Associate Member in the Faculty of Theology and Religion with interests in how medieval metaphysics shaped modern thought. He also works as a freelance journalist.

The Kingdom of God and the Common Good: Orthodox Christian Social Thought

Review by Clara Piano

For the first three years of our marriage, my husband and I lived in a small apartment with our children and dog. The building sat in the middle of a booming city block, ringed on all sides by construction. I must have mentally recited Walt Whitman’s ‘I Hear America Singing’ hundreds of times as I walked the dog around the block, both of us surveying the steady transformation. There is something deeply satisfying about watching a structure rise at such close quarters, being privy to the immense effort of coordination, craft, and discipline it requires to manage something of that size.

Reading The Kingdom of God and the Common Good produces a similar sensation. Rather than waiting for someone else to begin a broad, accessible conversation about Christian social thought — and the distinctive Orthodox contribution to it — Pahman simply started building. Like an experienced construction manager, he brings decades of preparation to the task: years as a Research Scholar at the Acton Institute, a PhD in Theological Studies from St. Mary’s University (Twickenham, London), and his work as the Executive Editor of the illustrious Journal of Markets and Morality. Unlike the typical book in this genre, his knowledge extends as comfortably to the economic contributions of Smith, Keynes, and Hayek as it does to Scripture and history.

The first section of this review will provide a summary of the book and explain four key terms – kenoticism, symphonia, Sophia, and sobornost’ – that play a special role in Pahman’s understanding of the Orthodox contribution to Christian Social Thought. The next section of the review will engage more with some strengths and shortcomings of the text. A third section will conclude, offering suggestions and encouragements for future research.

Summary and the Orthodox Contribution

The Kingdom of God and the Common Good is written for readers without prior background in Christian social thought. Each section opens with references to familiar cultural works and closes with discussion questions, making the book well suited for classroom or parish study. Pahman intentionally selects topics likely to interest Orthodox readers and highlights moments where insights from other Christian traditions or historical episodes might deepen Orthodox reflection.

The first part surveys modern Christian social thought, focusing on the Roman Catholic, Lutheran, Neo-Calvinist, and Social Gospel traditions. The second discusses related aspects of biblical theology, reminding us to read the Scriptures not alone but ‘with the church.’ A third part surveys Church history beginning with Pagan Rome and ending with the Russian Empire. A fourth part provides the reader with a primer on modern economics. Finally, the fifth part engages with contemporary Orthodox sources and argues for Pahman’s vision of a uniquely Orthodox social thought that draws from Scripture, Church history, liturgy, and the best of other Christian social thought traditions.

The most distinctive contribution of the book is the recurrence of four Orthodox terms—kenoticism, symphonia, Sophia, and sobornost’—to articulate this uniquely Orthodox social vision. While asceticism and liturgy also play especially important roles in the Orthodox approach to the world, these may be more familiar to Christian readers of other traditions and so I leave discussing them to the next section.

Kenoticism derives from the Greek kenosis, ‘self-emptying,’ used in Philippians 2:7 to describe Christ’s voluntary humility in the Incarnation. Orthodoxy insists this act did not diminish Christ’s divinity; rather, it reveals that God’s nature is self-giving love. Socially, kenoticism implies humbling ourselves before each person we encounter, especially the vulnerable. In a manner resonant with Catholic social teaching and thinkers in the social gospel tradition, it affirms human dignity while emphasizing the paradox that divine glory is revealed in meekness.

Symphonia describes the ideal harmony between the church and the world, especially when it comes to the state. While it is difficult in practice to protect the church from worldly interference, separate institutions remain necessary for securing the array of moral and material goods that humans require. The common good requires vigilance and prudence in this division of labor and trade. Pahman is fond of reminding the reader that Christ tells us that we do not live by bread alone, not that we do not live by bread.

Sophia, or Holy Wisdom, refers to the divine order manifested in creation and revealed in Christ. It underscores the contemplative dimension of social life and how human work can participate in God’s ongoing creative purpose. This theme echoes Protestant reflections on vocation, suggesting that our faithful attention to ordinary tasks is more beautiful and more consequential than we initially perceive as we cooperate with grace.

Lastly, sobornost’, a central concept in Russian Orthodox thought, describes freely chosen communal unity. To be sustained, this unity must be grounded in both truth and love. This term captures the Catholic social thought principles of solidarity, emphasizing that flourishing emerges from organic community and freedom within those communities, rather than various forms of social engineering.

Strengths and Weaknesses

The book has many strengths, making it a bookshelf essential for those interested in Christian social thought more broadly. Among the book’s strengths is its fair treatment of contentious issues such as usury, profit, and socialism. Pahman clearly identifies shared principles of Christian social thought, including private property and freedom of association. Most compelling is his recurring emphasis on asceticism. Orthodox ascetic practice, such as fasting from food or certain luxuries, reorders human desires toward higher goods and exposes how easily economic life becomes governed by disordered loves. Markets respond to preferences, but preferences themselves require moral formation. In this light, asceticism serves as a corrective not only to personal materialism but also to short-term economic thinking.

While reading The Kingdom of God and the Common Good, I was struck by how lopsided some strains of Christian social thought can and have become without this essential commitment to asceticism alongside beautiful liturgy. Ascetic practices force us to reorder our loves toward the highest goods, instead of idolizing things which cannot fulfill us. It is the liturgy, and our active participation in the liturgical calendar with our households, which reveals to each of us that which is truly valuable. It is how we store up treasure in heaven. This, in many ways, is the fundamental problem of the Christian in economic life. I would like to read many more books about the importance of asceticism and liturgy in modern economic life.

The book has few weaknesses. Readers new to Orthodoxy may wish for more historical and doctrinal background, which would help situate the social arguments. As an economist, I have a minor quibble with Pahman’s critique of modern economists as being too unwilling to engage explicitly in moral reasoning. While the earliest economists (such as the Late Scholastics or Adam Smith) often arrived at their economic analysis by way of contemplating specific moral questions, contemporary scholarship tends to separate analytic and ethical tasks for methodological clarity. This division does not eliminate moral reflection; it relocates it to different genres of writing, thus allowing scholars to specialize in their comparative advantage and trade insights with one another. Another Orthodox social thinker, Alex Salter, has a helpful piece on the matter, entitled ‘What, to a Christian, Is Economic Efficiency?’ (2024). Salter defends the positive economic analysis of efficiency as a means to limit the scope of the discipline and to allow normative analysis its own space to argue directly for moral goods rather than being constrained by the tools of economists or other social scientists.

Conclusion

Orthodox Christianity is often associated with mystery and paradox – liturgical beauty and disciplined asceticism. Pahman’s book brings these two dimensions into conversation with modern social questions, offering a vision in which sacrifice and beauty together illuminate Christian economic life. I hope that he, and many other Orthodox thinkers, will continue building this magnificent tradition.

‘The Kingdom of God and the Common Good: Orthodox Christian Social Thought’ by Dylan Pahman was published in 2025 by Ancient Faith Publishing (ISBN: 978-1-955-89080-9). 408pp.

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Clara Piano is currently a Visiting Assistant Professor of Economics at the University of Mississippi, a position which will become tenure-track in Fall 2026. Her primary areas of research are family economics, law and economics, and public choice. She also serves as Managing Editor of the Journal of Markets & Morality and holds positions as an Affiliate Scholar at the Acton Institute, a Family Policy Fellow at the Archbridge Institute, a Senior Fellow in the Family Program at Cardus, and a Law & Economics Fellows Advisor for the International Center for Law & Economics.

David Silver: ‘Corporations and Persons A Theory of the Firm in Democratic Society’

Review by Richard Godden

Corporations and Persons is not for the casual reader: the first half comprises a dense and highly contentious examination of the nature of personhood and moral responsibility and the second half includes a torrent of assertions relating to alleged duties of corporations which requires slow and careful consideration.

That said, the book deals with important issues. David Silver argues that ‘the corporation is … a kind of person in moral relationship with human beings, and in particular with democratic society’ (page 1). He thus considers that corporations have moral responsibilities and, ‘in a certain abstract sense’ (page 5), moral rights and he seeks to describe these responsibilities and rights. Unsurprisingly, he considers the acceptance of his thesis to be important, stating ‘I have written this book to urge all of us to adopt an understanding of the relationship between corporations and the rest of democratic society which is grounded in a commitment to liberal democratic values’ (page 186).

Silver rejects ‘the idea that we have theoretical intuitions which directly provide us with knowledge of the nature of moral responsibility’ (page 12) but his view of such responsibility is nonetheless ultimately subjective. He refers to our ‘reactive attitudes’, which he describes as ‘a family of mental states which includes blame, resentment, gratitude, indignation, and appreciation’ (page 11) and he goes on to assert that ‘we should understand our theoretical intuitions about moral responsibility as arising out of our efforts to make sense of our reactive attitudes, and then judge their validity insofar as they accurately make sense of them’ (page 12). It is thus ultimately on the basis of our ‘reactive attitudes’ that he concludes that corporations have moral responsibilities.

He recognises that he is dealing with ‘age-old questions’ of philosophy (page 9) and he seeks to deal with a number of modern objections to his theories. However, although some of what he says is powerful, it does not dislodge the most serious objections. In particular, Christians and other monotheists must surely start with a concept of morality that relates to God: to say that someone has a moral duty is to say that they are accountable to God in respect of their behaviour. The implication of this is that only sentient beings can have moral responsibilities and, since corporations are not sentient (a fact that Silver accepts [page 4]), they cannot have such responsibilities. In this connection, it is interesting that Silver himself slips into using language about corporations that implies sentience (e.g. ‘corporations can have a messy set of dispositions towards their moral obligations’ [page 20]).

Quite apart from theistic arguments, contrary to Silver’s view, David Shoemaker is surely right to assert that corporations (in contrast to their directors and managers) ‘cannot be sensible targets of angry blame’ (page 17). To say that a corporation ought to have done something is no more than a shorthand way of saying that those running the corporation ought to have ensured that the relevant thing was done. Anger is only meaningfully directed at them. Anyone who doubts this should imagine a situation in which a corporation has no directors or managers and ask whether they could meaningfully be angry with it.

Silver accepts the existence of objective value and thus objective morality and he centres the latter in ‘the intrinsic value of human beings qua sentient person’ (page 45). Such a starting point may well lead to conclusions similar to those that Christians draw from the idea that human beings are made in the image of God. However, on its own, it leads to an entirely human centred morality which is rather narrower than a morality that starts with God’s creation and care of all things and the notion of responsibility to God. Furthermore, Silver goes on to state that his theory ‘analyzes the world in terms of how to create the greatest level of rational self-governance that can be made available to each person in society’ (page 46; emphasis Silver’s), which elevates self-governance from being a relevant consideration to a central position that is potentially dangerous and is certainly contrary to a monotheistic view of the world.

On the basis of his theories of personhood and morality, Silver seeks to establish the purpose of corporations, which he believe is ‘to create products and services that provide a benefit to those who ultimately use them’ (page 63). He then moves on to describe a large number of duties that he believes corporations owe (25 of varying levels of specificity are listed on page 174) and a lesser number of rights that he believes they enjoy. His view of purpose is contentious but not new and there are books that argue for similar purposes in more detail (e.g. the books by Colin Mayer reviewed on this website). Likewise, there is little new in the duties and rights that he advocates, although this is not to say that they are either uncontentious or even clear. Indeed, many of the alleged duties, as listed on page 174, are not adequately backed up by argument and many of them are vague (e.g. the assertions that corporations should not seek more than their ‘fair share of attention from policy makers’ [page 155]).

Much more seriously, there appears to be a fundamental conflict between, on the one hand, Silver’s reaction to the divergence between his views and the laws of the USA and, on the other hand, his stated commitment to the upholding of democracy. This conflict is most evident in relation to corporate purpose. Silver’s view is, of course, out of line with the law of the State of Delaware (where a large proportion of major US corporations are incorporated), which requires that corporations focus, at least primarily, on the pursuit of profit. At one point, Silver appears to accept that Delaware law inevitably trumps his view: he says that ‘It is up to each democratic society to make its own determination regarding the purpose of the firm’ (page 53). Indeed, he goes further, saying that ‘democratic citizens have the prerogative to institute a system of democratic social governance, which assigns moral and legal rights and duties to individuals and institutions’ (page 54; emphasis Silver’s), which is a truly extraordinary statement in so far as it asserts that morality is determined by the state! However, at the same time, Silver argues for civil disobedience by the managers of Delaware corporations (i.e. non-compliance with the Delaware law relating to corporate purpose [pages 96-99]). How does he reconcile these statements?

The answer is: by characterising the relevant Delaware law as ‘authoritarian’ and ‘undemocratic’. He says that ‘I call a social decision-making process authoritarian if it does not track the values and judgments of the people it affects’ (page 91) and, having stated that ‘interstate competition for corporations is an authoritarian force’, he concludes that ‘to the extent that Delaware’s corporate code posits a legal duty to maximise profits, this lacks democratic legitimacy’ (page 93). This in turn leads to the conclusion that ‘non-compliance [by managers with that legal duty] can be justified given that the law’s understanding of their duties was generated in an authoritarian manner’ (page 98).

This is breathtaking! He simply redefines the word authoritarian so as to include, and the word democratic so as to exclude, things that he does not like. Delaware’s laws may be undesirable, even unethical, but they are constitutional, established through the democratic process and not authoritarian, using these words in their normal senses. Furthermore, leaving aside the linguistic sleight of hand, if a democratic society is to survive, the bar for civil disobedience must be set far higher than Silver suggests.

Silver uses the same technique to attack court decisions that he does not like, including both cases upholding and interpreting the Delaware laws that he dislikes and the much debated Citizens United case, in which the US Supreme Court overturned laws restricting political spending by corporations. He describes the latter as ‘highly antidemocratic’ (page 115) and, at one level, he has a point in relation to this: the role of the US Supreme Court has the effect of transferring power from the legislatures of the USA to the courts. However, while this may or may not be desirable, it is the consequence of the US constitution, which is itself a democratically adopted and amendable instrument. Furthermore, the nature of a Supreme Court decision (i.e. whether or not it is antidemocractic) cannot possibly turn on whether or not it determines that a particular matter is or is not in breach of that constitution.

The strangest thing about Silver’s book is the fact that he could have argued in favour of the duties (and indeed rights) that he discusses in the second half of the book without the need to argue that corporations are morally responsible persons. For example, he could have argued in favour of his view of the purpose of corporations by arguing that their managers have a duty to pursue this purpose. Indeed, as the book progresses, Silver talks more and more about managers and, even human beings in general. In particular, he recognises that the question of civil disobedience is, in reality, a question of the conflict between what he sees as the moral duties of the managers of corporations and their legal duties. He also acknowledges that many of the duties he asserts are duties applicable to all people and his comments about democratic legitimacy are clearly independent of the philosophical issues that he has considered earlier in the book.

This contributes to the impression that Silver may have an agenda that goes beyond that which is the book’s stated purpose or at least a desire to appeal to a particular audience: at several points, there are passing references to stock issues that suggest virtue signalling (e.g. there is a short paragraph on page 49 that crams references to ‘racial and ethnic minorities’,’ indigenous peoples’ and ‘people with nontraditional genders and sexual orientations’ into a few lines); his comments on the Citizens United case include the statement that the decision ‘reflected … close personal connections between the national political and industrial elites, and perhaps a new understanding of their shared class interests’ (page 115); he asserts (without argument) a duty ‘to develop an historical awareness of … the ways that the history of capitalism is intertwined with the history of colonialism, racial oppression, and slavery’ (page 167); and the main part of the book ends with criticism of the repeal of the provisions of the US Glass-Steagall legislation that, in essence, required the separation of commercial and investment banking, an attack on the suggestion that misguided government policy relating to lending to minorities was a cause of the Global Financial Crisis, an attack on the ‘unfair’ response of the US Government to the crisis, and statements relating to the duties of corporations in respect of climate change – all in the space of just over two pages (pages 176-178)!

The book raises important issues but it is deeply flawed. The examination of the philosophical issues in its first few chapters is worthy of study, albeit with considerable care. However, those wishing to consider in detail the duties of corporations and their managers would be better off looking elsewhere.

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‘Corporations and Persons: A Theory of the Firm in Democratic Society’ by David Silver was published in 2025 by Oxford University Press (978-0-198-94068-5). 189pp.

Richard Godden is a Lawyer and a Consultant of Linklaters. He was a Partner of Linklaters for 36 years during which time he advised on a wide range of transactions and issues in various parts of the world.

Richard’s experience includes his time as Secretary of the UK Takeover Panel and later as a member of its rule making committee. He also served as Global Head of Client Sectors, responsible for Linklaters’ industry sector groups, and was a member of its Global Executive Committee.

He has been the chair of the CEME board since 2023.

In his review of the book, Gordon Bannerman argues that while recounting widespread failures, the author might have also considered post-1945 economic successes using market-based solutions and considered the issue of the governance of less-developed countries in her history.

‘The Solidarity Economy: Nonprofits and the Making of Neoliberalism after Empire’ by Tehila Sasson

Review by Gordon Bannerman:

In this historical study with a contemporary perspective, Tehila Sasson details the efforts of the charitable and nonprofit sectors to promote economic development in the ‘Third World’ after 1945. Despite pejorative connotations, ‘Third World’ is appropriate terminology given the historical context. The book is based on copious research, evident from a 30-page bibliography, with six chapters ambitiously traversing a range of issues from international development, corporate social responsibility, fair trade, environmentalism, and neoliberalism. In recounting a typology of global activism linking environmental, economic, and social issues, thematically the book oscillates between development theory, organisational history, and microeconomic business models.

Sasson considers post-imperial Britain from the perspective of the nonprofit sector rather than elitist high politics or the industrial struggles of trade unions. She aims to demonstrate the ethical dimensions of Britain’s post-imperial role after 1945, a role predicated on the assumption that global underdevelopment and inequality owed something to imperial authority, with resource control and allocation serving the metropolitan core rather than the colonial periphery.

Sasson demonstrates how a moralistic view of capitalism drew on cross-currents in British socialism such as Christian Socialism, the anti-modernity of William Morris, and craft-based Guild Socialism. It was not mere antiquarianism, though revival of interest in these ideas after 1945 was undoubtedly eclipsed by the big battalions of trade unionism, State socialism, and Keynesian demand management.

The development theorist E. F. Schumacher is a prominent figure throughout. Through his experiences in Burma and India, Schumacher was converted to Gandhian ‘Village Economics’, encompassing promotion of cottage industries, indigenous manufacturing, and small-scale farming. Rejecting an expansive Statist, Keynesian path to economic growth, Schumacher, in his most famous work Small is Beautiful (1973), envisaged an incremental, environmental development strategy using intermediate technologies and close control of resources (pages 37-38).

The popularity of these ideas within the British Left was not readily apparent, with a reimagined capitalism based on humanised production and responsible consumption slow to emerge. While a general dissatisfaction with industrial capitalism was evident, the idea that ‘small is beautiful’ was influential is problematic. It is easy to mistake the shadow for the substance, for despite an ideological vibrancy spanning a spectrum from Gandhi to the Angry Brigade, such ideas were variable in their impact and influence. The Left, broadly defined, remained predominantly Statist in its economic thought and direction at least up until the 1970s, though the ‘New Left’ in the following decades absorbed some of these ideas.

Ethical socialism was also largely extra-parliamentary, sourced from intellectuals like R. H. Tawney and Richard Titmuss. Tony Crosland was one of the few leading politicians to advance the idea that foreign aid was vital to the internationalist conscience of the Wilson/Callaghan Labour Government of 1974-79. However, by the mid-1970s he faced a formidable alliance of a gatekeeping Treasury and a Chancellor and Prime Minister fully prepared to jettison Keynesian orthodoxy and high government spending. Domestically, business-minded ideas of industrial democracy, going beyond nationalisation to co-ownership and corporatism, were largely unsuccessful. The charitable sector enjoyed more success in lobbying for and achieving tax exemptions, and resisting the imposition of VAT arising from EEC membership in 1973.

While changing notions of foreign aid by respective governments would have been a fruitful line of inquiry, the focus of the book leans more towards charting the growth of consumer activism, through organisations such as War on Want and Oxfam. The counter-culture of the 1960s, notably incorporating women and the family, distinct from masculine trade unionism, created notions of the ‘Citizen-Consumer’. It was a concept that gained traction with the development of charity shops, where a closer connectivity between donors and recipients represented a departure from the rather disheveled and informal antecedents of jumble sales and church bazaars.

At least initially, there was something of a middle-class character to shop locations, volunteers, and clientele. Campaigns to raise awareness were complimented by a new vocabulary of ‘Consumer Sovereignty’ and ‘Global Citizenship’, with emotional appeal heightened by sophisticated marketing, branding, and advertising tools. Oxfam ‘Slimming Clubs’ offered a lifestyle focus, of dieting and fundraising, though global food scarcity and famine make this appear, in hindsight, an awkward, even crass, juxtaposition. The first Oxfam (Oxford Committee for Famine Relief) shop aimed at tackling domestic poverty, and incentivising Third World production and development. This was a business model which required work. Sasson recounts how Oxfam couldn’t locate native-made handicrafts, and ‘resorted to buying foreign goods from wholesalers’ in Britain, which were then designated as handicraft goods (page 78). These morally questionable actions appear to violate consumer transparency and trading standards, but more seriously, this strategy was vulnerable to the criticism of entrenching inequality and stifling development.

Sasson concedes that the business model of the charitable sector became more calibrated towards satisfying British consumers (page 84). The lines between means and ends, between business operations and ethical objectives, became somewhat blurred. Criticism of Oxfam’s Bridge Programme, connecting Third World producers with British consumers, anticipated later critiques of multinationals with accusations of low wages, piece-rates, child labour, and poor working conditions (page 107). With an emphasis on product quality and competitive pricing, the Bridge Programme was touted as an entrepreneurial training-ground but success in less-developed ‘informal’ economies often proved elusive (pages 104-105).

Indeed, the extent to which development could be achieved by a ‘bootstrap’ approach is debatable. Handicraft manufacturing and micro-financial projects were often difficult to scale, resulting in entrenched underdevelopment and solidified relative poverty and lower living standards. Development strategies that shunned national macroeconomic planning always ran the risk of an outcome whereby infant industries would remain infants!

Some might argue for a flaw in the development model, with sustained growth not merely a matter of possessing capital, knowledge, and resources, but also dependent on a myriad of financial, political, and cultural factors. It all seems a long way from Walt Rostow’s claims for an inexorable modernisation model in The Stages of Economic Growth: A Non-Communist Manifesto (1960). In a politically-charged Cold War text, Rostow had argued for the transformative power of Western capitalism, whereby aspirational countries could capture the magic formula of modernity by emulating Western economic development, innovation, and entrepreneurship. As traditional societies were not so easily transformed, by Keynesian or more incremental means, such a view was overly optimistic and simplistic. In any case, many Third World governments and charitable organisations were hostile to the imposition of Western patterns of development or economic thought, often viewing it in neocolonial terms. Hence, by the 1970s, development was conflated with the less ideologically-charged term ‘modernisation’ rather than Westernisation.

In that sense, it is unfortunate that Sasson doesn’t tackle the issue of the governance of less-developed countries. We don’t have to take the position of Peter Bauer (that foreign aid is money taken from poor people in wealthy countries and given to wealthy people in poor countries) to acknowledge the diversity of political and financial arrangements in less-developed countries. Examining political culture and financial incentives and initiatives would have provided an evidential acknowledgment of the ethical complexity of trade, aid, and development issues. Equally, while recounting widespread failures, the author might have considered post-1945 economic successes using market-based solutions.

Regrettably, there are a number of avoidable errors within the text. Some are typos: ‘Tori’ for ‘Tory’ (page 49), while Chris Patten, Minister for Overseas Development, 1986-1989 is misidentified as ‘Chris Patterson, Minister for Overseas Aid’ (page 187). Similarly, Ken Livingstone was not an MP and Mayor of London simultaneously, as implied by the text ‘London Labour MP mayor Ken Livingstone’ (page 174). The 1984 Band Aid record was not the ‘very first charity song’. George Harrison’s ‘Bangla Desh’ in 1971 claims that honour (page 141). More substantively, it is questionable whether Britain in the 1970s can accurately be described as ‘deindustrialized’ (page 80), or whether the Conservative Party can be described as ‘neoliberal’ given the struggles Margaret Thatcher faced throughout her leadership with the noblesse oblige section of the Party (page 187).

While unfortunate, these errors don’t undermine the positive attributes of the book. While at times the arguments are somewhat diffuse, Sasson presents a thought-provoking account of ideas coopted or diverted from their original high-minded, idealistic objectives. Her assertion that nonprofit activity has often provided a respectable imprimatur for continuing global inequality, poverty, and hunger is the leitmotif of the book. Hence, we’ve come full circle, with the continuing relevance of the term ‘Third World’ testimony to the relative absence of transformative change.

‘The Solidarity Economy: Nonprofits and the Making of Neoliberalism after Empire’ by Tehila Sasson was published in 2024 by Princeton University Press (ISBN: 978-0-691-25038-0). 289pp.

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Gordon Bannerman is a professor teaching Business History at Wilfrid Laurier University, Canada. His primary research interests focus on modern British political and economic history.

Elisabeth Braw: ‘Goodbye Globalization: The Return of a Divided World’

The timing could hardly be better. Elisabeth Braw’s Goodbye Globalization: The Return of a Divided World was published just as Donald Trump returned to the White House, and it has lost little of its pertinence in the year since then. And yet Braw, an Atlantic Council fellow delivers a deeper message. Trump isn’t the cause of deglobalization. He’s merely the symptom of a much deeper malaise that the Western establishment spent three decades pretending didn’t exist.

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The book’s central thesis is brutally simple. The globalization project that dominated from the fall of the Berlin Wall until roughly the mid-2010s is already dead. Braw traces the story chronologically, from the giddy optimism of the 1990s through to today’s fractured world order. Back then, we were assured that opening up trade with China would inevitably lead to political liberalization. Beijing would discover the joys of democracy once its middle class got rich enough. Meanwhile, integrating Russia into the global economy would prevent any return to Cold War tensions. Financial deregulation would spread prosperity. Supply chains spanning multiple continents would deliver ever-cheaper goods to grateful consumers.

It all sounded fantastic in the economics faculties and corporate boardrooms. Out in the real world, however, it did not work out quite so well. Manufacturing workers in the West watched as their jobs vanished to China. Entire communities were hollowed out. The promised retraining programmes turned out to be worthless. The nineties offered plentiful opportunities, but there were plenty of people who were left behind.

What makes Braw’s account particularly valuable is her willingness to name names and tell human stories. This isn’t some dry academic treatise. She’s spoken to executives, policymakers, and ordinary workers across the globe. The result is a book that comes vividly to life with the full cast of characters who shaped this era.

The financial crisis of 2008 should have been the wake-up call that something was not working. Instead, the elites doubled down. Yes, there were problems with financial integration, but surely the answer was more regulation, not less interconnection? Then came Brexit. Then Trump’s first presidency. Then Covid, which revealed just how dangerously dependent Western nations had become on Chinese manufacturing for everything from pharmaceuticals to personal protective equipment. Russia’s invasion of Ukraine, with tacit Chinese support, delivered the final blow. Suddenly, all those smart people who’d been lecturing us about the virtues of economic interdependence had to confront an awkward reality: authoritarian regimes don’t share our values and will happily weaponize trade relationships when it suits them. Who could have guessed?

Braw documents how China has used its dominance of supply chains and critical materials to pursue strategic advantages. An increasingly authoritarian China’s control over products and materials needed for the energy transition has created dependencies that Western governments are only now scrambling to address. But it’s rather late in the day to suddenly discover that outsourcing your entire industrial base to a geopolitical rival might have downsides.

The book excels at explaining why plenty of leaders have concluded that globalization simply isn’t working anymore. Supply chains are vulnerable. National security has been compromised. Domestic social cohesion has frayed as entire regions were sacrificed on the altar of cheaper consumer goods and fatter corporate margins. So what comes next? For Braw, the answer is ‘friendshoring’. The idea is straightforward: trade should continue, but primarily with countries that share Western values of human rights, free markets, and the rule of law. Build supply chains through allied nations. Accept that this will mean higher costs, but gain security and resilience in return.

It’s a sensible enough prescription, though one can’t help wondering if it’s practical. Most countries quite sensibly want to trade with everyone. Consumers choose the best value products, which is precisely why Chinese electric vehicles are proving so popular despite Western politicians’ huffing and puffing. Raising tariffs to force friendshoring will increase costs for ordinary people and risk making Western industries permanently uncompetitive. Likewise, the Trump administration seems keener on battling with Europe than China. There is not much sign of ‘shared values’ in its tariff schedules.

Still, Braw deserves credit for facing up to uncomfortable truths. The West was naive and arrogant in assuming liberal democracy would inevitably spread alongside McDonald’s franchises. The assumption that economic integration would automatically produce political convergence was always wishful thinking dressed up as sophisticated analysis. The book won a gold medal at the 2024 Axiom Business Book Awards, and it’s easy to see why. This is sharp, well-researched work that cuts through decades of conventional wisdom to explain how we arrived at this fractured moment. Braw writes with authority but also wit, making complex geopolitical developments accessible without dumbing them down. As Trump imposes sweeping tariffs and the EU erects barriers against Chinese imports, we need clear-eyed analysis of what deglobalisation actually means for economies, businesses, and ordinary people. Braw provides exactly that.

Her conclusion is bracing: the world is dividing once again into competing blocs, but international cooperation remains possible if we’re more realistic about who we’re dealing with. The era of naive globalization is finished. What replaces it depends on whether Western nations can rebuild industrial capacity, strengthen alliances, and accept that cheap stuff from authoritarian regimes comes with a price tag that goes far beyond the sticker on the shelf. It’s going to be expensive, difficult, and politically fraught. But then, perhaps we should have thought of that before we outsourced our future to Beijing.

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‘Goodbye Globalization: The Return of a Divided World’ by Elisabeth Braw was published in 2025 by Yale University Press (ISBN: 978-0-300-28263-4). 352pp.)

Matthew Lynn is an author, journalist and entrepreneur. He writes for The Daily Telegraph, The Spectator and Money Week, is the author of the Death Force thrillers, and is the founder of Lume Books.

Review by Michael Munger

The Crisis of Democratic Capitalism by Martin Wolf

Scholars ranging from Milton Friedman to Paul Krugman have argued that liberal democracy and market capitalism are ‘symbiotic twins’: each requires the other. Yet there is increasingly a sense that the relation is becoming abusive. Martin Wolf sees a crisis, and his diagnosis is sweeping and urgent: elites must reform the system, and soon, before it collapses.

But Wolf’s prescriptions depend on cooperation, or at a minimum consent, from the very elites he sees as causing the crisis in the first place. This is a common problem in ‘Public Choice’ analysis, the part of political economy where this reviewer works. Systemic problems need not reflect any irrational or mistaken behavior on the part of actors in the system. Appallingly, it is precisely the self-interested, narrowly ‘rational’ choices being made by those with the power to effect change that ensure that change will be difficult.

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Wolf brings together political theory, growth and distribution data, financial history, and current events to explain how shocks (financialization, the global trade and technology wave, and social media dynamics) weakened the democratic-capitalist symbiosis. The book is well-reasoned, but fails (in this reviewer’s opinion) to understand the pathology of the codependence between capitalism and democracy.

Wolf’s account focuses on what he calls ‘pluto-populism’, which he sees as having four main features. The first is ‘pseudo-populist rhetoric,’ where super wealthy candidates or their pet parties publicly adopt populist language—though likely not policies—blasting corrupt elites and presenting themselves as the only possible saviors of the interests of ‘the people’. The second is plutocratic policy priorities once those parties gain office. They cut social program spending, and slash taxes and regulations that constrain the wealthiest segments of society: Once in power, the policies enacted serve the interests of the extremely rich.

The third feature is a ‘bait and switch’: to cover the betrayal on economic policies, pluto-partisans inflame cultural grievances by focusing on immigrants, minorities, or (in the U.S., in particular) out-of-touch university faculties and Hollywood stuffed shirts. Fourth, and ultimately most dangerously, the pluto-partisans actively weaken democratic institutions, because they know their ersatz populist rhetoric cannot permanently disguise their self-serving policy choices. Again, from a U.S.-centered perspective, this would mean extreme gerrymandering, and dismantling restrictions on torrents of money entering and influencing politics.

It is hard to tell if Wolf thinks this is a particular, historically contingent, empirical description of the process or if he believes the problem is inherent in demo-capitalist systems. I agree with his view that only liberal democracy reconciles efficiency with personal freedom and accountability. This is an important counterweight to calls, from the left and the right, to sacrifice liberal democracy to address the crisis.

One might note that, even if one accepts the merits of Wolf’s claims, there are blinders for some important outside ‘shocks’ in the recent period. The rise of China as a global economic superpower, the expansion of social media in politics in ways that don’t even require money, and the disruptive forces resulting from artificial intelligence, have all destabilized the system. The fact that there is political and economic chaos need not lead us to infer that a cabal of super-rich Bond villains are controlling and directing the process behind the scenes.

That said, the broad strokes of the crisis portrait painted by Wolf ring true. But in agreeing with that diagnosis, this reviewer is much less persuaded by Wolf’s prescription. His ‘solution’ is the usual progressive dog’s breakfast of aggressive industrial policy, antitrust, forcible takeover of corporate governance, stronger social insurance and place-based support, more effective public administration, and insulation of democratic institutions from outside influence, especially real political campaigns where money can be spent to level the pitch against concentrated government power.

Look: the reason there is too much ‘money in politics’ is that there is far too much politics in money. Constitutional restrictions on the ability to take, manipulate, and redistribute wealth would be more effective in separating economic power from political power, and more supportive of democratic institutions. Giving property rights the same status as political rights would separate the two spheres more effectively, and with better results. However, that ‘solution’ would require that elites in Congress give up the lucrative right to be corrupted, and that elites in the corporate world give up the right to do the corrupting. Even though the solution is simple, it is not easy.

A recent book by Ruchir Sharma, What Went Wrong With Capitalism? (Munger review, CEME review) is instructive in this regard. Sharma notes that the story of ‘austerity’ and cuts in social programs—a story Wolf embraces—is entirely fabricated. In fact, government spending has gone up steadily, in real terms, per capita, and as a proportion of GDP. There have not been cuts in social spending; the ‘cuts’ have only been reductions in the anticipated rates of increase. Austerity is, in short, a myth: government spending has grown steadily, and mostly on a straight trend, since 1960.

As a result, Sharma contends, productivity has slowed, inequality has widened, and economies are increasingly dominated by large, entrenched firms (oligopolies or ‘zombie’ firms) that suppress competition. But the direction of causation is not ‘plutocracy ruins democracy,’ but rather ‘democracy invites crony capitalism, because elected officials benefit from corruption.’ That is, the driving force is the unfettered domain of ‘democratic’ industrial policy and taxpayer-sponsored giveaways. In this view, modern capitalism was ‘ruined,’ because the democratic system, driven by self-interested elected officials, has found it useful (and profitable!) to expand state power over the private sector

But there is a problem. Capital has come to depend on these infusions of cash-amphetamines, focusing on increases in deficit-financed state spending rather than investing in production and research on new products. The solution is to block democratic governments from putting a thumb on the scale in subsidizing and supporting favored industrial sectors or companies, not to expand that control. It must be noted that the decline in any capacity of corporate leaders to self-govern, based on a sense of morality and ethics, is partly a justification for state regulation, but it is also likely caused by state overreach. If we want less intrusion from the state, we’ll need to require more capacity for moral virtue for private leaders.

The problem with the ‘austerity narrative’—which is, as noted above, empirically ludicrous—is that it privileges the sorts of ‘solutions’ that actually caused the problem in the first place. Wolf, and those who argue from that perspective, have no hope of solving the problem of the rocky marriage between democracy and capitalism. A wise counselor would advise instead that the couple learn to define some boundaries and give each other some space.

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‘The Crisis of Democratic Capitalism’ by Martin Wolf was published in 2023 by Penguin (ISBN 978-0-141-98583-1). 496pp.

Michael Munger is Pfizer/Pratt University Professor of Political Science and Economics at Duke University. He is a past President of the Public Choice Society, and works at the intersection of commerce and politics.

If markets are to function effectively, prices need to be agreed and respected. However, confidence in the ability of free markets to allocate resources efficiently through the price mechanism is in decline. Minimum wages are accepted despite evidence that they price the unskilled out of work. The manifesto of the newly elected mayor of New York, Zohran Mamdani, includes a $30 minimum wage, rent freezes and city-run grocery shops.

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For those from a Common Law background, price is generally, in the absence of fraud, as agreed between buyer and seller. However, not only is there a long tradition of thinking about whether a price is ‘just’, and if not, how to remedy it, those principles survive in contemporary legal systems.

The idea of a just price, while owing something to Aristotle and Roman law, was developed by Scholastic theologians who believed that commutative justice required that the items being exchanged should be of equal value. For Thomas Aquinas, justice required that in an exchange one should be concerned to ensure that the counterparty receives what is due to them. While for Hayek this was a ‘futile medieval search’, the concept allowed, by the application of the Roman law principle of laesio enormis, land transactions at less than half their ‘true’ value to be void so that the seller recovered their property. In common law systems that concept has been dismissed as contrary to the principle of the autonomy of the contracting parties, while elements of this thinking survive, for example in Germany and France.

While Just Price Theory and Just Price in the Markets cover similar ground, with the latter, by Charles R. Geisst, focussed on the history of the idea and Joaquin Reyes using it in the former as the basis for a reassessment, they make a stark contrast. Though Reyes is markedly less accessible, he seeks to explain the ideas behind a ‘just price’ and argues that it deserves renewed attention. By contrast, Geisst writes at greater length, but to less effect. His previous work on usury may not be unconnected to significant material on that subject being included here which is only, at best, tangentially relevant. He includes material on well understood subjects from monetary theory in the seventeenth century, to the development and problems of mercantilism and public markets in the eighteenth and the gold standard and anti-trust legislation in the twentieth, although the connection to the concept of a just price is far from clear. Much of his material is not only largely irrelevant but underlines the lack of originality. Neither Hayek nor Collingwood feature in the bibliography or index. Errors – including on the nature of feudalism – add to the impression of existing material being recycled without anything new to say.

Just Price, Sovereignty and Inequality

Reyes sets out the various ways that the idea of a just price have been regarded as misleading. In the view of free market critics, it is impossible in a free market to sell an item for more than its worth, as its value is that which someone is willing to pay for it. The idea of a just price undermines the ability of an individual to make a contract. The sovereignty of the individual requires that he is able to exercise autonomy in agreeing a price. It may transpire to have been a mistake to agree that price, but the individual had the freedom to make that decision. For others, the concept of a just price fails to recognise the efficiency with which market prices provide signals to buyers and sellers which ensure demand is met efficiently.

While recognising these counterarguments, Reyes suggests that the concept deserves to be reconsidered on the understanding that the price agreed reflects an imbalance of power between buyer and seller. He explores the tension between the autonomy of the individual and the risk of injustice. His purpose is to demonstrate that market economics are unjust by favouring the rich. While confused by a style which prefers complexity over clarity, at its heart his view is that ‘prices are the product of choice and power’, tending to reinforce inequalities of power. There are arguments to be made for more equal distribution of resources, but Reyes’ attempt to argue that disparities of wealth mean that market pricing is unfair is undermined by a lack of credible analysis. His examples tend to the extreme; the person obliged to sell their organs or markets characterised by extortion.

He quotes R.G. Collingwood who described a just price as a ‘contradiction in terms’. Collingwood also noted that it is reasonable to demand a higher wage if it is lower than it should be due to circumstances which ‘ought not to exist’. Collingwood makes the point that this is not an argument for legislation controlling wages, but for it to prevent exploitation of workers. For Collingwood ‘a wage fixed by any but economic considerations ceases to be a wage’. Reyes misrepresents the argument by suggesting that Collingwood’s characterisation of a just price is contradicted by his support for a freely organised labour market. He claims that Collingwood ‘did not really believe that the idea of the just price was contradictory, although he believed that he did’. Reyes’ argument in support of this contention is obscure and does not deal with Collingwood’s analysis.

While noting that people will not work as hard without wage differentials, he suggests that a virtue based approach ‘allows us to challenge this assumption by noting that this is merely a contingent feature of our current society’. No detail is given of the alternative arrangements, ‘shaped by a more egalitarian ethos’ which would avoid this problem. Animal Farm is not referred to.

While his work is characterised by the repetition of chains of logic, this does not prevent Reyes from making suggestions with no obvious support. Having quoted Adam Smith suggesting that wealth is power, he moves without comment to suggest that that the rich impose prices on the poor. He gives no examples of public markets that function in this way but argues that market economics can only operate efficiently ‘if equality of wealth obtains.’ This leads to the conclusion that ‘in societies in which wealth is unequally distributed, … very few (if any) of the prices that we pay and receive are just’. His purpose is to suggest that, to use a much favoured word, ‘normative’ pricing, dependent on ‘virtue’, should replace prices set by free well-functioning markets. In making this argument he suggests that contract law should recognise ‘distributive justice’ by setting prices which lead to greater equality of wealth. The autonomy of the individual to make a contract is only partially accepted.

The Enduring Attraction of ‘Just Prices’ – And the Importance of Market Economies

A book reviewed by Richard Turnbull illustrates the sustained interest in this area. Richard’s comment that the content was ‘shrouded in a mystical academic language of a rather obscure discipline’ can equally be applied to Reyes. That review provides case studies where attempts to replace market prices were resisted by those with less resources than the counterparty.

One might dismiss this line of thought as ignoring generations of experience. From attempts to limit wages after the Black Death to the wages and prices policies of the 1970s or the experience of eastern Europe after 1945, the attempt to replace a market by prices controlled by executive action has been both damaging and ultimately unsuccessful. However, the interest in the idea of a ‘just price’ demonstrated by these two books underlines the fact that for many this is an attractive idea. If the voters of New York elect a mayor who thinks that state controlled grocery shops will reduce prices, it would be a mistake to dismiss this line of thought as redundant. Many simply do not trust market economics. Academics like Reyes seek to provide credibility for distributive justice as a replacement for the operation of the market and they have a receptive audience. Making the argument for the central importance of market economies in generating the wealth needed to provide prosperity and reduce poverty is a priority for a generation attracted by the idea that ‘justice’ can be achieved by replacing the freedom of individuals with direction by the state.

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‘Just Price Theory: A Reassessment’ by Joaquin Reyes was published in 2025 by Bloomsbury (978-1-509-96354-6). 256pp.

‘Just Price in the Markets: A History’ by Charles R. Geisst was published in 2023 by Yale University Press (978-0-300-26833-1). 280pp.

Andrew spent his career with PricewaterhouseCoopers where he was a partner for more than 25 years. He led a variety of the firm’s businesses both in the UK and globally, with a focus on the pharmaceutical industry. He also led the firm’s work on explaining corporate taxation to civil society and the public. He is now studying for a Master’s in History at Oxford which he combines with being a trustee at the London Handel Society.

Matthew C. Klein and Michael Pettis’s Trade Wars Are Class Wars offers a bold reinterpretation of global trade tensions. Their central thesis is that trade wars are not the result of national rivalry, but of internal class conflict: rising inequality within countries suppresses domestic consumption, leading to excess production and savings that must be exported. This, they argue, creates trade surpluses and financial instability, which manifest as international conflict.

The authors draw heavily on the legacy of John A. Hobson, whose 1902 work Imperialism: A Study argued that inequality within nations leads to under-consumption and surplus capital, which must be deployed abroad—often violently. Klein and Pettis quote Hobson directly: ‘The struggle for markets… is the crowning proof of a false economy of distribution. Imperialism is the fruit of this false economy’ (page 6). They adapt Hobson’s insight to the modern global economy, replacing gunboats with financial flows and trade imbalances. As they put it, ‘The global concentration of income over the past several decades was responsible for slower growth in living standards in much of the rich world, worsening trade imbalances, and the global financial crisis’ (page xi).

The book’s strength lies in its detailed case studies of China, Germany, and the United States. In China, the authors argue, ‘systematic transfers of wealth from Chinese workers to Chinese elites distort the Chinese economy by strangling purchasing power and subsidizing production at the expense of consumption’ (page 3). They show how financial repression, the hukou system (the control of the labour force to keep rural workers away from high paying jobs in cities, to avoid slums), and underpaid migrant labour have created a surplus economy reliant on exports and overinvestment. In Germany, they trace the post-reunification wage suppression and fiscal austerity that shifted income from workers to capital owners, resulting in a massive current account surplus. ‘Germany’s leaders undermined what should have been one of the most positive transformations of modern times: the creation of a healthy, unified Europe’ (page 5).

The book’s framing—’class wars cause trade wars’—invites scrutiny. The authors lean heavily on a Marxian interpretation of capitalism’s internal contradictions, echoing Hobson’s critique of imperialism. But while Hobson’s theory was historically tied to colonial conquest, Klein and Pettis focus on financial flows and trade imbalances. The intellectual lineage is clear, but the mechanisms differ.

An alternative is that trade wars may stem more from regional inequality than class warfare. The rise of populism in the United States, particularly Donald Trump’s electoral success in economically distressed regions, points to a geography of grievance rather than a pure class divide. The authors acknowledge this dynamic in passing—’voters in congressional districts where many businesses made goods that competed with imports from China elected increasingly extreme representatives’ (page 2)—but they do not fully explore the spatial dimensions of inequality.

Moreover, the book’s thesis that capitalism is inherently unstable has not held up at the level of the nation-state. Advanced economies have experienced fewer recessions and more resilient growth than the Marxian tradition would predict. Nor has Hobson’s imperialism thesis endured: many developing countries, including China and South Korea, have achieved substantial economic development. Trade Wars Are Class Wars is thus another attempt to revive the instability thesis—this time through the lens of global trade.

The book’s weakness is thus attributing too much explanatory power to class conflict. Regional disparities, institutional choices, and political coalitions also play crucial roles. The authors’ framing may be rhetorically powerful, but it risks conflating correlation with causation.

The book is a valuable contribution to the conversation about global economic governance. It challenges the conventional wisdom that trade imbalances are entirely the result of national policy failures, currency manipulation or eccentric politicians, and instead points to deeper structural issues. For readers interested in the intersection of economics, politics, and international relations, it is a thought-provoking read.

Viewing the book from a biblical worldview is not straightforward, because states and economies are so different now compared with the ancient world. However, with respect to the ‘hook’ of finding another negative consequence of inequality, one comment can be made. The two-fold biblical denunciation of both poverty and wealth draw from their impact on people—material and spiritual—in a more direct way. The prayer of Agur in the book of Proverbs nicely nutshells a range of biblical material.

‘Two things I ask of you, Lord; do not refuse me before I die: Keep falsehood and lies far from me; give me neither poverty nor riches, but give me only my daily bread. Otherwise, I may have too much and disown you and say, “Who is the Lord?” Or I may become poor and steal, and so dishonour the name of my God.’ (Proverbs 30:7–9)

Thus, the God-dishonouring evils that arise from destitution and the God-forgetfulness of the rich are the more direct concerns from this passage. Trade wars in and of themselves are not very pressing evils, though of course their wide-ranging consequences may include them.

Klein and Pettis is a worthwhile read, but only with a few other books in the Jenga tower at the bedside. Those interested in economic affairs will want other books that emphasise causation running from trade to regional inequality and then onto inter-national struggles, together with a wider political economy alongside Klein and Pettis’s borrowings from Hobson. Those interested in the spiritual power of wealth, and the spiritual dangers of destitution could do with a Bible. Klein and Pettis offer a compelling narrative, but it is not the only one.

‘Trade Wars Are Class Wars: How Rising Inequality Distorts the Global Economy and Threatens International Peace’ by Matthew C. Klein and Michael Pettis was published in 2020 by Yale University Press (ISBN: 978-0-300-24417-5). 336pp.

Gordon Menzies is Associate Professor of Economics at the University of Technology Sydney and Chair of Economic Humanists – a group that brings Christian theology into conversation with mainstream economics.

A ‘Failed-Again’ Christian: Explaining Why I Believe is an intimate spiritual memoir that wrestles with some of the most pertinent and enduring questions linked to the reconciliation of faith, science and the problem of evil. As hinted at by the subtitle, Explaining Why I Believe, the book’s purpose is two-fold: first, to recount Tan’s life story and spiritual journey; second, to offer a rationale for his faith, grounded in his experiences and knowledge. It is a personal account that takes readers on a journey of both inquiry and discovery, and hopes to address the apparent contradictions between faith and science that have so often been popularised in public discourse.

Kim Tan is one of the UK’s most successful biotech entrepreneurs: he is co-founder of the Transformational Business Network (TBN) and a trustee of the John Templeton Foundation. He is also Pro-Chancellor of the University of Surrey (UK) and a fellow of the Royal Society of Medicine (UK).

The book is comprised of 11 short chapters and is well-written, maintaining a clear and informative style throughout. It does not rely heavily on technical language and even in areas where more specialised matters such as DNA composition are explored, Kim masterfully translates the terminology and adapts his thinking for the lay reader, which makes the book accessible to a wide audience. In this review we will briefly touch upon some book’s highlights.

Within the first chapter, Kim traces his personal journey to faith: from growing up in a Taoist family in Malaysia, through a period as a ‘half-baked Darwinist’, to eventually becoming a committed Christian. Underlying this narrative is a humble, honest reflection: Tan identifies himself not as a exultant believer but as a ‘failed-again Christian’ (page 7). For Tan, the Christian faith represents an acknowledgement of the reality that we are imperfect: we keep failing, yet in this failing we are met by the grace of God and return to forgiveness and peace: ‘The Church is a hospital and rehab centre for sinners, not a museum for saints’ (page 10). The style of the book has a raw, relatable honesty which doesn’t sugar-coat. This kind of transparency may resonate with readers who themselves struggle, doubt or sometimes feel unworthy.

The body of the book is opened with a clear assertion that, contrary to popular belief, science and religion are not inherently at odds. Some of the most influential scientists in history were theists, including, Mendel, Pascal, Newton, Cuvier, Collins, and even Einstein, who rejected the premise that science and religion are mutually exclusive (page 10).

Tan highlights that while it is important to recognise the truths of science, we must not place these matters on a pedestal but rather recognise their limitations: ‘…while scientific truth is exact in its specificity, it is also incomplete. Our scientific knowledge and theories necessarily change when presented with evidence from new discoveries’ (page 17). More importantly, science struggles when it comes to things like meaning, value and beauty, and here the author quotes Stephen Hawking who acknowledges that science may one day figure out how the universe began, yet ‘…it cannot answer the question: why does the universe bother to exist?’ (page 18).

Tan then introduces his perspective on the Bible, pointing out that it was not primarily a scientific book intended for a scientific audience; rather it attempts to explain the ‘…who and the why behind the universe, not the how’s’ – and in this regard, ‘…it is the perfect complement to science, not a contradiction’ (page 21). The book then touches upon some misconceptions surrounding the interpretation of biblical books like Genesis, where ‘days’ did not refer to 24h periods but to epochs, stages, order, and a beginning (pages 22-23).

An interesting point is made on DNA composition where evolutionists argue that we are derived from chimps because we because we share 98.4% of our DNA with chimpanzees. The problem is that, as Tan puts it, we also share 75% of our DNA with the zebra-fish and 50% with a banana. So a more useful and accurate understanding of evolution places it within a common design framework and indeed, within the hands of a designer. This is known as evolutionary creationism (page 24).

The book then turns its attention towards God’s character as it is revealed in nature. Here Tan argues that at God is powerful, creative, orderly, intelligent and personal (pages 31-33). Looking at humanity itself, Tan argues that two core teachings found within scripture, identifying human beings as image bearers of the divine yet tainted by sin, ‘…make perfect sense of the human experience’ (page 37).

A particularly intriguing point in the book comes when Tan then opens a discussion surrounding the problem of suffering and evil. In light of original sin, Tan points out that ‘when humankind became infected with evil, nature too became infected and the harmony was shattered’ (page 41). Diseases like cancer or natural disasters can, in part, be attributed to ‘…an imperfect world populated by imperfect people operating on imperfect laws’ (ibid). Not that this offers complete justification but for some readers it may bring a degree of explainability.

The book concludes with a sincere account where Kim Tan acknowledges his own doubts, ‘For me the journey to faith is a “long and winding road”. But doubt is healthy. It forces me to re-think my assumptions and prejudices’ (page 57). Yet the beauty and complexity of nature coupled with the reality of the human condition as reflected in scripture compel Tan to believe that a ‘…theistic worldview might be more consistent with our experience of life’ (page 58).

While the book is not aimed specifically at a business audience, those within the private sector or working with the natural sciences will find much use in it. It offers a sharp and captivating analysis at the intersection of science and faith. Above this, it is a story of personal transformation where Kim Tan offers hope: the emphasis is on grace, forgiveness and humility rather than gallant certainty and triumphalist language. Tan underscores a Christianity rooted in human fallibility, dependence on God’s mercy and continual discovery. That message will feel refreshingly down-to-earth for many.

A ‘Failed-Again’ Christian is not a theological book - but rather a testimony which invites the reader not to ‘arrive’ but to walk, stumble, and keep seeking. For the vast majority, reading it will be a wise use of time.

‘A “Failed-Again” Christian: Explaining Why I Believe’ by Dato Kim Tan was published independently in 2025 (ISBN 979-8-3163-8248-4). 63 pp.

Andrei E. Rogobete is Associate Director at the Centre for Enterprise, Markets & Ethics. For more information about Andrei please click here.

From last week:

Book Review

At a conference on business ethics a few years ago, an academic got up to reply to a presentation by a business leader. ‘That’s all very well in practice,’ he said, ‘but what about in theory?’ This book is a careful exploration of how in practice acting together in the service of common goods is more common than we sometimes think, and needs to find its place in any adequate theoretical account of both the firm and the market.

The Chicago View

Hoipkemier has his sights focused in the first part of the book on the narrow conception of the firm as a nexus of contracts between self-interested actors (what he calls the ‘Chicago view’) . Such a view implies the firm is more like a market than a community, and he argues that ‘it’s wrong. It badly mistakes the social and legal reality of the firm’. He goes on to criticise Coase’s account of the firm in terms of cost-saving devices of transacting parties, noting that firms trade on the ‘trust and loyalty and shared culture that arise in human communion’. He argues that the firm’s claims of legitimacy ‘rest on relations of solidarity that demand to be treated as goods or values in themselves’, and that the economic advantages of co-operation ‘can be justly enjoyed only as common achievements ... and not as private benefits’. He develops the idea of a firm as a community where membership implies participating in ‘a moral order that is a source of identity, fellowship and character formation’. This allows him to sharply distinguish employees as ‘members’ from shareholders and other stakeholders who have an interest in the firm but are not members of it. A supplier cannot share in the common good of the firm because ‘price centred market exchanges are not a form of common action’. He then interestingly explores the complexity of firms such as Uber where drivers are not employees but yet participate in the common good of the firm and have claims in justice on it.

The Market

The second part of the book is a fascinating exploration of how to understand and think about the market, and where in it – if at all – common goods arise. The author takes us on a journey through Hayek and Polanyi to Genovesi to explore the true nature of markets using a variety of examples, and asks whether and how the political institutions that underpin markets are themselves forms of the common good.

For Hayek the absence of common action or common goods in a market is essential, as it frees participants to focus on quality and price, and price signals in an efficient market contain all the information needed for buyers and sellers. Hoipkemier notes that Hayek’s framework, despite its depth of insight into the power of spontaneous order and the effectiveness of free markets, nonetheless suffers from a deficit in its account of how markets themselves depend on a shared political vision, a broader common project.

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Here is where the insights of Polanyi are so relevant, in explaining how the development of markets is inherently political and historically conditioned, and has now escaped the boundaries previous cultures carefully erected. ‘What worried Polanyi, and should worry us still, is that the aspirations of modern liberalism have obscured this civic foundation and allowed the beneficial logic of the invisible hand to metastasise into an all-consuming ideology of the self-regulating market’. Polanyi was profoundly insightful and critical of what he saw as the commodification of people and land, and thought these needed removing from the market altogether, but his analysis was constrained by his assumptions about the limitations of market relationships, and the difficulty he also saw in finding better alternatives.

This is where the humanist vision of market relationships promoted by Genovesi and in recent times by Zamangi and Bruni comes in. Genovesi sees market relationships as ‘a domain of cooperation as well as competition, a sphere of solidarity as well as contract.’ With a different anthropology, market relationships become ‘a site of fraternity where the dominant intention aims at mutual assistance for the sake of a common good rather than interdependent private benefits’. Interestingly, Hoipkemier then speculates on how such a richer commitment in market relationships could be signalled through ‘social co-efficients’ – adjustments to prices to reflect an obligation or gift as well as an entitlement. Attractive as it is, he is also clear about the difficulty of simply generalising this humanistic vision to the wide variety of market relationships from local to global.

The Common Good: Common Action and Common Ends

The governing theme of the whole book is that a grammar of the common good unlocks a more realistic understanding of how human beings participate in both firms and markets. Hoipkemier carefully carves out a specific and limited project here under the title of ‘Aristotelian pluralism’. He is not seeking to settle larger questions about the ultimate common good of society or human flourishing. Rather, by simply recognising that there are patterns of common action to common ends always involved in both firms and markets, he is seeking to expose the limitations of approaches that focus entirely on profits and private gain.

This second half of the book is excellent in drawing out the practical alternatives to the still prevailing narrow orthodoxy of market relationships, and how with a richer anthropology and better grasp of historical context, we are much freer than we sometimes think to re-imagine what market relationships could be, and how they could serve a broader common good. Many enlightened businesses, for instance, describe the shift they seek to make in moving from ‘transactions to relationships’, signifying a desire to broaden their sense of the shared worthwhile endeavour to embrace key suppliers, major customers and other stakeholders. How market relationships develop can be complex and varied, but Hoipkemier’s account helpfully draws out the fact that markets are always culturally and socially conditioned, and that we are not the prisoners of some deterministic Darwinian jungle where the only rule is narrow self-interest.

The Need for Critique

The first part of the book is somewhat less successful. A critique of the Chicago view of the firm is certainly needed, and the retrieval of the idea that common goods are generated and relied on in mainstream business activity is important. But simply saying ‘it’s wrong’ somehow misses the point – it may not be supposed to work in theory but it has been and remains powerful in practice. Some firms, particularly in the financial sector, have in their own terms succeeded: the model is designed so that individuals seeking no more than their own self-interest will behave in a way that enables a firm to maximise its profits. Such firms can and do survive, delivering high profits for investors over time in highly competitive and sometimes toxic working environments. Do they also only succeed through creating and relying on forms of common action that they ignore or deny? To some degree yes, no doubt, but enlightened self-interest in pursuit of private gain is often a prime motivator and plausible explanation for much of what they do.

Rather than claiming ‘it’s wrong’, a different approach would be to posit that there is a choice about how to understand the role of business in society, and how to think about people and what motivates them. The Chicago approach is clear that the role is to maximise profits and the motivation is self-interest. Because we are all malleable, the power of these ideas shapes what results. If we stay in a firm where these ideas are prevalent we are likely to adapt, and the resulting behaviour then reinforces these ideas. But this is a choice, an appeal to a limited view of the firm, and a narrow conception of people.

An alternative choice is that the role of business is to benefit society and that people are more than self-interested. These ideas also shape what a firm can be, and the nature of the social reality that comes into being. It is this alternative view of the firm as a social organisation where the flourishing of people is an intrinsic part of its purpose in society that enables common goods to be both fully recognised and also created. But this also depends on a second dominant idea, namely the operative view within a business of what motivates people. Is it just money, status and power, or are there other desires and motives beyond these, such as meaning, relationality and autonomy? As Sumatra Ghoshal points out in his classic 2005 paper: ‘Bad management theories are destroying good management practices’. Alongside a narrow view of the purpose of the firm, a highly individualistic and distorted view of what it means to be human is also a core problem, and has deeply distorted how business leaders think and act.

A New Anthropology

Hoipkemier brings this anthropological question out very well in the final chapter of the book in the discussion on markets, but it really needed to come at the start. In practice, the strategy and culture of a business are chiefly shaped both by the operative purpose (What is the point of the firm in society?) and also by the quality of relationships it cultivates based on its view of people and its assumptions about what motivates them. Alongside the recognition that common goods arise within firms when there is common action to a shared end, a better anthropology is also needed to recover a more realistic view of the firm as a social organisation where people matter, and want to contribute to a shared, worthwhile endeavour. This double shift in thinking is what can help create a better business, that is also better for society and better for people.

The book is not an easy read, but is carefully crafted and draws on a broad range of sources. In bringing the theory back to practice it would have benefited from references to purpose-led businesses and movements such as the B Corp, which illuminate the shifts in thinking taking place now as many businesses rethink their role in societies facing profound social and environmental challenges.

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‘The Price of the Common Good: Markets, Corporations, and Political Economy’ by Mark Hoipkemier was published in 2025 by Notre Dame Press (978-0-268-20897-4). 304pp.

Charles Wookey is an independent consultant and business school teacher. He was a co-founder and CEO of the charity A Blueprint for Better Business, formed after the financial crisis to help create a better society through better business, and now supports its work as a trustee.

This is a spectacular book whose title only hints at its true ambition. Economist Richard Langlois brings depth to both the overarching framework and to finely crafted historical details. The book’s broad scope and rigorous analysis across 816 pages (a mere 550 pages of main text with extensive endnotes) can only be hinted at in a review.

Challenging Chandler

At heart, Langlois offers a retelling of the conventional view of the rise of the managerial corporation that Alfred Chandler wrote on nearly fifty years ago in The Visible Hand. Chandler’s triumphalist account of the large, multidivisional, vertically integrated corporation was published in 1977, ironically just as the shifting economic sands and corporate raiders were already beginning to transform corporate life. Until that decade, the story seemed one of linear progress away from personal, entrepreneurial capitalism and toward managerial experts. This theme of a competent managerial elite replacing the messiness of the invisible hand of the market extended beyond the business world to policy and politics more broadly. This context is not lost in the book, and Langlois evokes the broader zeitgeist, drawing on the words of figures such as Herbert Croly and John Kenneth Galbraith.

Langlois’s core task is to explain the rise of managerial corporations in the late 19th and early 20th centuries in light of the fact that market forces later dismantled these same large corporations in the late 20th and early 21st centuries. He does this with a deceptively simple theoretical argument and detailed economic history to substantiate his claims. I’ll examine these dimensions in turn.

The Economics of Corporate Form: Markets vs. Hierarchies

The theoretical argument is straightforward. Building on the foundational work of Ronald Coase, we know that economic activities are organized within firms when the cost of achieving them via market transactions would be higher than organizing within the firm. That is, the visible hand of an integrated firm replaces the invisible hand of market relations when it is profitable for it to do so.

Langlois argues that large corporations proliferated in the late nineteenth and early twentieth centuries not because they were a permanently superior institutional form, but because they filled a temporary institutional gap. Rapid technological change outpaced the development of market-supporting institutions—the legal frameworks, financial markets, and infrastructure that enable decentralized coordination. In this environment, integrated firms could organize complex production more efficiently than fragmented markets could. These corporations weren’t naturally better at resource allocation; they were simply the best available solution given the institutional constraints of their era. By the late twentieth century, as market-supporting institutions matured, the advantage of large integrated firms diminished, and many were dismantled or reorganized.

Event-Driven Narrative

After an introductory chapter introducing the main concepts and the nuanced argument of the book in précis, the eight additional chapters and the long epilogue are arranged chronologically. The author deftly weaves a narrative that combines corporate, intellectual, and political history all analyzed through the mind of an economist who has read the empirical economic literature on relevant topics. At various stages, Langlois explains the role of these different forces on the organizational form of the corporation. The result is a synthesis—patchwork in parts—of the various threads needed for this multifaceted undertaking. Readers may get mired in the detail at times, but the amazing thing about Langlois’ enterprise is that he pulls it off and the result is a magisterial book that deserves to be read widely.

These varied threads are necessary because Langlois argues for the role of contingent history in the rise of the Chandlerian corporation. The role of government misapprehensions about business practices played a serious part in the tendency towards certain types of structures. Technological change and economies of scale can explain some industries, but the phenomenon was much broader. Furthermore, the continued dominance of the Chandlerian corporations is explained by the absence of sophisticated decentralized markets the development of which was hampered by antitrust efforts and shocks. There was a reason the market forces which rose at the end of the 20^th century did not emerge in midcentury: the chaos of economic turbulence, world war and cold war. The space for an efficient make-or-buy decision was necessarily closed down when, as was often the case, the courts decided that contracts necessary for external contracting decisions are anticompetitive, or the empowered regulator like the Interstate Commerce Commission or Federal Communications Commission intervenes.

In the nineteenth century, commentators increasingly distinguished between closely held businesses and large businesses. Any history stresses the role of the railroad in the rise of professional management, but Langlois brings to life the economics of the business and the politics surrounding it. Through antitrust and regulations like those on the railroads, government changed the optimal institutional structure. Work in economic theory and history has helped explain the practices of businesses that contemporary legislators and regulators dismissed as anti-competitive.

Langlois’s argument is in summary that the business practices which led to government intervention were often efficiency-enhancing and the policy response was often harmful. When this included things like banning contracting practices this led to more business being done within the firm. This rather bold argument is aided by copious references to work in economics on 19th and 20th century business practices and the implications of government policy, making scholarship on this available to the general readers for the first time.

Contingent History: Wars and Economic Crisis

Perhaps most important for understanding the middle of the 20th century is the string of shocks, namely the two wars with unprecedented levels of war planning and the Great Depression that happened in the first half of the century. In general, these contingencies shifted the decision to bring elements within the firm instead of purchasing on the market. The years between 1914 and 1973 can in fact be viewed as the high watermark of state planning. As more time separates this period from the present, a conception of the degree of state planning and the worldview of the managerial elite in politics, economics, and business is lost.

Among the many terrible events, Langlois calls the Great Depression, the signal catastrophe and ‘a worldwide cataclysm that would alter the history of the century in the US more fundamentally and profoundly than even its two brutal wars’ (page 186). He argues, with supporting evidence, that for the United States the century’s worst year was 1933—the second dip in the Great Depression. Between the peak in 1929 and the low point in 1933 the Dow Jones dropped some 86 percent. Over this same time unemployment rose from 4 percent to 25 percent and estimates suggest that real per capita output dropped by 29 percent to a level not seen since 1901.

Drawing on the consensus in the literature, Langlois argues that this catastrophe was not caused by inherent features of capitalism that make it prone to break down or particular features of the 1929 crash itself but was the fallout from bad policy ideas which he dissects in detail. The crucial set of facts is that the Federal Reserve failed to act appropriately when it allowed the money supply to shrink and thereby unleashed the horrors of debt deflation. Beyond this central problem, the government attempted (among other things) to keep wages from falling in a delusional idea that high wages would allow the surplus of goods to clear. Many of the most egregious attempts of the New Deal were stopped by the courts, but there was a more general attempt to control markets.

In a key summarizing passage Langlois says of the Depression and war years:

The Second World War placed resource allocation even more firmly in the hands of the government and ushered in far more comprehensive nonmarket controls. Between fall 1929 and the end of World War II, prices in the United States often transmitted either false information or no information at all about relative scarcities, and many of the institutions upon which market exchange depended were hampered or destroyed. It is against this background, and not against a counterfactual backdrop of thick and well-functioning markets, that we must explain and appraise the rise of the large American corporation in the middle years of the twentieth century.

In a very interesting chapter, Langlois shows how dynamic market forces similar to those of the 1970s and beyond were already emerging in the 1920s but were diminished by the crisis. Across different industries innovative entrepreneurs were able to access capital and generate complex contracting networks solving assorted economic issues. General Motors and other companies (unlike Ford which because of its eccentric founder was steadfast in remaining optimized for the previous environment) would take advantage of responsive, modular supply chains. Even companies like DuPont sourced their patents not in the famous research labs of the midcentury but from acquisition. Much of this energy would become concentrated in the large corporations not because of their superiority as Chandler claimed, but because they were the only ones to survive the Depression. New restrictions on banking and forms of contracting limited new entrants and startups. Furthermore, the capacity of large firms to internally finance led to the growth of R&D departments at DuPont, GM, GE and others.

As Langlois writes:

The Depression and the policy responses to it had decisive consequences for the American corporation…. The dramatic monetary contraction, along with the failure of the Fed to act as an adequate lender of last resort, led to an amplifying cascade of bankruptcies and bank failures… this had the effect of destroying much of the capacity of the banking system, and of the financial system more generally, to supply financial intermediation. Small firms, which needed to rely on external capital markets, felt the effects far more than large firms, which could rely on internal financing and had close ties to large banks. Thus the Depression initiated or accelerated shakeouts in many industries. In some industries the process was Darwinian, with the most productive firms surviving; in others, survival depended simply on access to capital. At the same time, the New Deal instituted an unprecedented regime of price supports and entry restriction in financial, labor, and product markets. (187-88)

Absent these events one wonders how different the corporate world would have looked in the 1950s and 1960s.

Another merit of the book is the way it reflects on the way antitrust regulation, industrial policy and scientific and technological progress interacted and on the ideological and political context for them. Odd Progressive ideas underlay aspects of antitrust legislation and decisions of the FTC; odd monetary ideas underlay the decisions of the Fed. The science of industrial practices, whether in steel production or electronics, developed rapidly. Government and industry were closely intertwined in both world wars, and he discusses industrial policy at length in an even-handed but negative way. Another component of many chapters is Langlois’s focus on the role of finance, whether J.P. Morgan through the House of Morgan in earlier chapters or leveraged buyouts in the later chapters. Langlois also examines the form of pyramidal holding companies which was viewed as suspect by Progressives and partially banned in the New Deal. The demise of that form (unlike in the rest of the world) plays some role in explaining the American integrated firm and later conglomerates.

The Return of Markets and Contemporary Lessons

This level of historical detail and context makes the past come alive. Its coverage of the more recent past stands out as well. While the first 400 pages of the main text take readers from Standard Oil to Mad Men, the last 150 pages cover deregulation, disintermediation, and the rise of VC-backed startups. In the past decades, numerous books have been written about the revival of liberal thinking in the 1970s. Until that decade, for a variety of reasons, the story seemed one of linear progress away from personal, entrepreneurial capitalism and toward managerial experts. Many of these works suffer from depicting the changes as merely the actions of a few choice actors rather than a more widespread and diverse set of changes rooted in a disillusionment with the status quo. One illustrative example that Langlois discusses is the role of Ted Kennedy, no market fundamentalist, in the deregulation of trucking, rail, and air travel.

One of many dimensions to the book is that Langlois is seeking to undermine what he sees as a broader Progressive vision of society (he explains American Progressivism in detail and contrasts different varieties) that runs up to the present. The introduction and epilogue contain some understandably pointed remarks about the contemporary efforts by those on the right and left who have sought a more muscular state to regulate businesses. Many of these figures make explicit historical claims and hearken back to Progressive efforts to restrain the dominance of big business via antitrust and regulations banning practices like self-preferencing by Amazon. Building on the work of others, Langlois shows many ways in which past attempts failed to understand the efficiency of practices they villainized and how state regulation often empowered big business against markets and consumers. In doing so, he illuminates both past failures and the risks of repeating them. General readers may disagree with the broader view and specialists might have issues with one of the many episodes he covers, but The Corporation and the Twentieth Century is a tour de force.

‘The Corporation and the Twentieth Century: The History of American Business Enterprise’ by Richard N. Langlois was published by Princeton University Press in 2023 and paperback in 2025 (978-0-691-24753-3). 816pp.

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John Kroencke is a Senior Research Fellow at the Centre for Enterprise, Markets and Ethics. For more information about John please click here.

The Laissez-Faire Experiment: Why Britain Embraced and Then Abandoned Small Government, 1800-1914’ by Walker Hanlon

Review by

Economic historians have a growth preoccupation. The Industrial Revolution and its causes play the leading role in most prominent books in the field. And there are many other works that seek to explain the absence of an industrial revolution elsewhere in the world.

It is refreshing therefore to read a book that is not about the causes of industrialization but its consequences. If we reach back to the past, say, 200 or more years ago, two dramatic transformations are visible: one is the abundance of material goods and transformative technologies due to industrialization; the second transformation is the rise of large, modern, welfare states.

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Walker Hanlon’s book The Laissez-Faire Experiment addresses this second transformation. He asks two fundamental questions: ‘First, how well did limited government in mid-19th century Britain work? Second, why was limited government abandoned in favor of the more interventionist government found in the U.K., and essentially all other developed countries, today?’

Hanlon’s argument is elegant and simple and it is grounded in standard economic theory.

The main problem facing the British economy in the early 19th century was dismantling the inefficient policies of the pre-Napoleonic war era, i.e., the fiscal-military state of the 18th century which protected large land-owners and relied on local and ad hoc institutions. Hanlon suggests that laissez-faire was an appropriate economic philosophy in this context: ‘across the first half of the nineteenth century, Britain’s laissez-faire system was successful. Economic growth was booming, and the benefits were accruing not only for the rich but also for average workers. Technological progress continued at a rapid pace. As a global power, Britain was unmatched.’

But, as the Industrial Revolution unfolded, the costs associated with this policy of non-interference mounted. For example, rapid urbanization brought new problems of overcrowding, sanitation, disease control, and pollution. There was a large health penalty to urban living in the 19th century.

Hanlon provides a compelling empirical assessment of the economic problems that led British policymakers to adopt a more interventionist series of policies. Increasingly severe market failures in the form of externalities from pollution, or asymmetric information in a range of markets, made government intervention potentially welfare enhancing.

The book is admirably clearly written. First, Hanlon presents the relevant economic analysis, which will be familiar to those who have taken Intermediate Micro or Public Economics, outlining the main explanations for market failure: information problems, monopolies, credit constraints, public goods, and coordination problems. Each chapter then considers different applications of the general principles, and provides a survey of relevant literatures in economic history, for example the literature on child labor regulations or urban public health.

The chapter on unemployment insurance, for example, condenses a tremendous amount of information and evidence into just a few pages. One charge that classical liberals have made against the modern state is that unemployment benefits and insurance crowded out the many forms of charity and private insurance that were commonplace prior to the welfare state.

Indeed, Hanlon discusses the wide array of traditional and occupation-based non-government forms of insurance available prior to 1850. He then, however, explains how the rise of large, geographically concentrated industrial agglomerations based on a single industry, such as cotton textiles in Lancashire, changed the problem of insuring workers. Neither family, locality-based, nor occupation-based forms of unemployment insurance, could deal with a general downturn in cotton textiles.

Overall, the book offers an exemplar of how to write a modern work of economic history. I wouldn’t hesitate in recommending this book. Beyond an economic history audience, it is an important book for anyone interested in understanding the rise of the modern state in the 19th and 20th centuries.

Nonetheless, as I discuss below, I want to push the implications of the book’s arguments a little further and explore some aspects of the debate which Hanlon perhaps neglects.

Was there a Laissez-Faire Consensus?

Having lavishly praised The Laissez-Faire Experiment as a work of economic history, my more critical comments will focus on the implicit political economy of the book and its treatment of economic ideas.

First, and I think intentionally, Hanlon’s treatment of what he calls ‘a laissez-faire philosophy’ is remarkably flat. I say intentionally as Hanlon clearly wants to focus on the economic history. From this perspective, too much engagement with the literature on the history of ideas would be distracting. So, he uses laissez-faire as a short-hand to refer to what is often called classical liberalism, essentially the idea of limited government and a general presumption of liberty.

This is entirely understandable and indeed defensible. Nonetheless, there is a price to taking this approach, which I will attempt to cash out below.

First, there is the use of the term laissez-faire as a shorthand. Classical liberalism has never been identical to laissez-faire because classical liberal thinkers have always recognized areas where government intervention is required.

Hanlon doesn’t really defend his use of laissez-faire as shorthand. But this approach overstates the degree of elite consensus and underestimates the extent to which there were competing intellectual traditions in 19th century Britain.

It is true that many of these positions came together in favoring a limited state in the mid-19th century, but it is precisely by recognizing that they were not a coherent ‘philosophy’ that we can appreciate why some of the leading figures also came to push for more technocratic interventions in society. A case in point would be Edward Chadwick. Chadwick was both a utilitarian follower of John Stuart Mill and a founder of modern public health and policing and he was more than willing to abrogate private property rights to achieve an improved societal outcome.

Hanlon’s narrative is of liberal, laissez-faire inclined policymakers and thinkers confronting the reality of widespread market failure and externalities and gradually adapting their policies and intellectual principles. He writes that ‘government intervention during the nineteenth century was not the work of a group of ideological collectivists. Rather, many interventions were the work of laissez-faire adherents who nevertheless believed that intolerable or inefficient conditions exist and were open to the possibility of experimenting with various forms of government intervention’. My feeling is that a deeper investigation of the ideas and writings of the classical economists and associates like Chadwick will reveal a more forthright commitment to policies of amelioration and improvement, rather than what is conventionally meant by the term laissez-faire.

Moreover, as Colin Holmes documented more than 50 years ago, something recognizable as a doctrine of laissez-faire did exist in the mid-19th century but it was never the animating principle of the British elite or government. Opposition to great government involvement in society could be animated by traditional ‘small c’ conservative principles. We don’t get a sense of this opposition (no John Ruskin or Thomas Carlyle, for example) in The Laissez-Faire Experiment.

Acknowledging this does not weaken Hanlon’s argument, but it would strengthen our understanding of the issues at hand in 19th century Britain.

The Role of Political Economy

My second comment concerns the treatment of political economy in the rise and fall of laissez-faire.

In general, Hanlon’s treatment is broadminded. He doesn’t assume that the existence of widespread market failures automatically translated into policies that could by assumption correct for those failures. Aware of the role played by both ideology and interests, he rather argues that the market failures that were exacerbated by industrialization ‘created opportunities for efficiency-enhancing government intervention’. Many factors would be critical in determining the extent to which these opportunities were realized.

Hanlon provides a similarly nuanced discussion of the shift towards more government activism at the end of the 19th century. He draws on recent historical scholarship to discuss the extent to which the example of the German welfare reforms and the pressures of war and imperial competition pushed policymakers away from laissez-faire.

Nonetheless, this part of the argument was less compelling than the first part of the book where Hanlon provides a systematic account how the new industrial economy generated all kinds of new externalities.

There is a reason for this. The type of evidence that Hanlon does a great job of assembling is very convincing in demonstrating the existence of market failures. He combines rigorous evidence with economic theory. But he doesn’t have an equivalently powerful framework for discussing how and why certain policy decisions were made.

In his conclusion, Hanlon tackles some of the big questions raised by his account: ‘is there evidence that the expansion of British government intervention . . . was misguided?’. Hanlon provides evidence that this was not so. He contends that policymakers followed experience and were not led by public opinion.

There is a risk here that the political economy of the 19th century does not get the full attention it deserves. Political economy is about heterogenous preferences and Hanlon’s framing in terms of an unmet nascent demand for education or for regulations abstracts from these conflicting preferences. Hanlon appreciates that government policies do not always achieve their aims. But political economy considerations are only occasionally mentioned, for example in explaining the failure to tackle coal pollution.

In contrast, conflicting political interest groups were prominent in earlier accounts of the rise of the state in late 19th century England. Holmes noted that what was traditionally seen as the high-point of laissez-faire ideology, the mid-19th century, was in fact a period of centralization and increased regulation, a point that Hanlon’s narrative and data in fact substantiate. But the role of conflict between different interest groups is not a major theme in The Laissez-Faire Experiment. And this also limits the ability of Hanlon to speak to developments in the 20th century, when much larger and more interventionist states emerged.

None of these comments take away from the fact that The Laissez-Faire Experiment is a great work of economic history and a major achievement. All subsequent scholarship will have to engage with it and will no doubt build upon its findings.

‘The Laissez-Faire Experiment: Why Britain Embraced and Then Abandoned Small Government, 1800-1914’ by W. Walker Hanlon was published in 2024 by Princeton University Press (978-0-691-21341-5). 504 pp.

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is Professor of Economics at George Mason University. He writes extensively about economic growth and institutions.

If one wanted to run a political campaign as an idealist left-leaning technocrat, this would be the book to write or use as manifesto. A Brief History of Equality is Thomas Piketty’s attempt to synthesize multiple years of research into a manifesto (albeit one published by Harvard University Press) that a politician could pick up to showcase not only a consistent vision of the world but also the remedies and solutions to make a better one.

Piketty argues there have been strong egalitarian forces—generated via political action leading to institutional and social change—that have worked to moderate the natural forces of capitalism that increase inequality (the argument for this natural tendency is the subject of his famous Capital in the Twenty-First Century). It was the twentieth century—particularly the period from 1914 to 1980—that generated a long egalitarian trend because this is when the egalitarian counterforces gathered momentum: progressive taxation, expansion of public education, greater regulation and social welfare program policies. Ultimately, the proposal is to continue and expand these policies.

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Redistribution, Inequality, and Populism

Beyond this, any reviewer faces a struggle after reading the book. How should it be reviewed? As political manifestos go, this is outstanding work. There is substance and coherence. At the same time, however, I doubt how much a politician can win on such a manifesto because the remedies offered are also accelerants to the forces of populism and illiberalism. The politics of redistribution can lead to tensions between those who pay and those who receive. This is why numerous economists point out that policies reducing the size of the state (in both scale and scope) are associated with less populism.

For example, when using ‘economic freedom’ indices—which weigh components such as property rights protections, free trade, business regulation, monetary policy, and the size of government—in conjunction with measures of political populism (both right and left), one finds that ‘economic freedom’ depresses populism. In other studies, what some call ‘welfare chauvinism’ is what drives anti-immigrant feelings (nativism). As Krishna Vadlamannati and Indra de Soysa summarized, the ‘positive effect of a bigger immigrant share of the population on support for nativist populism is conditional upon higher degrees of social welfare’ spending. In other words, the book proposes remedies that have fueled the rise of the populist right and left.

It is not surprising, then, that in Piketty’s home country of France, the Rassemblement National of Marine Le Pen and Jordan Bardella (which seems poised to win in 2027) has been a confused mix of left-wing economic policies and right-wing identitarian ones. France, with its sprawling welfare state that goes well beyond what the near-totality of economists would call the optimally sized state, has already implemented most of what Piketty recommends—and it is precisely there that liberal democracy appears most threatened, both from the left and the right.

The Contested Literature of Historical Inequality

So, what if the book was reviewed on deeper grounds—that of the deeper scholarly arguments embedded in it? There, I feel I am hardly more positively inclined. This is because the book relies on research that has been heavily criticized in top journals and in ways that dramatically alter the interpretation of the evolution of inequality in western countries.

Consider chapters 6 and 7 where Piketty discusses the fall of income and wealth inequality from 1914 to 1980 and its partial reversal thereafter. Considerable (though not exclusive) attention is devoted to America in these chapters. The decline is causally assigned to the rise of the welfare state and higher tax rates on the rich. However, this ignores multiple works showing that inequality started to decline before 1914—an age tied to ‘laissez faire’ and free markets. The decline has recently been noticed when some researchers (including myself) pointed out that the prices of goods and services consumed by the poor fell faster than those consumed by the rich. This means there was ‘declining’ inequality in the cost of living. This most egalitarian force essentially reverses any increase in inequality between 1870 and 1914 between the top 10% and the bottom 90% and eliminates half of the measured increase in inequality between the top 1% and the bottom 90%. At the same time, there were massive improvements in living standards which means the poor were getting richer nearly as fast as the wealthy.

Then, when one accounts for spatial differences in price levels within the country (suggesting that real incomes differed less than nominal incomes), one further reduces the level of inequality. Because of internal migration, one also reduces the trend of inequality. Extending both adjustments from 1914 to 1941 shows that inequality did not behave at all as depicted. It either stagnated or declined between 1870 and 1941.

But this is not all. The tax data used has many known flaws that historians have long documented (and that contemporaries themselves knew about), but that Piketty has ignored even after their importance was pointed out to him. For example, it is well established that unlike today, tax evasion in America was the ‘poor man’s business’ prior to the introduction of tax withholding in 1943. This is because the IRS had too few resources to investigate anyone but the very rich, and it even advertised that it never really investigated tax returns below $5,000—essentially applying to everyone below the top 1%. The result was widespread evasion below the top 1%. This evasion affects both the estimate of income of the ‘higher income groups’ and the total income of society (because tax evasion also depressed the source materials downward). The result is that we know tax evasion leads to an overestimation of inequality before 1943. By how much? Take any estimate pre-1943 and cut one fifth of it—that is the effect of tax evasion below the top 1% on the estimates of inequality.

Probably most egregiously, Piketty, alongside his co-authors Emmanuel Saez and Gabriel Zucman, was shown to have misused and misunderstood the tax data they employed while making crude assumptions to estimate inequality—even though data that would have avoided these assumptions existed in an easily available form. Correcting these errors (which I documented here before), I have shown that the level of inequality prior to 1943 is overestimated by roughly one fifth of what is reported. Combining this with the effect of evasion mentioned above is difficult because the corrections for the multiple errors of Piketty and Saez overlap with some of those to correct for evasion. However, all the clearly independent corrections suggest that a quarter of pre-1943 inequality is ‘artificial’.

Moreover, most of the decline in inequality did not happen in 1943 with the advent of a more robust tax administration, higher tax rates, and a more generous welfare state. Most of it occurred between 1929 and 1935—during the Great Depression, when virtually everyone was getting poorer. Separate independent works have pushed in exactly the same direction. A large share of the decline is due to the errors but it is computed by the use of a far-less than ideal statistical method. When we shift to a method that is more data-driven and give far fewer degrees of freedom to researchers, we see that the level of inequality is further overestimated by a bit less than one twenty-fifth of the level. Moreover, the errors induced by Piketty and Saez’s choice of method are mostly concentrated in the 1940s in ways that artificially enhance their story. With the superior data method, the majority of the decline occurred during the Depression as a result of collapsing incomes (and notably capital gains income, which is to say the income of the rich).

The overall level and movements of inequality are so massively changed—something which is also confirmed in multiple other pieces of research showing the poor understanding and shoddy treatment of the data by Piketty and his acolytes—that it leads one to accept to a more familiar claim that the only forces that can massively reduce inequality in a short period of time are wars and other catastrophes (e.g., the Great Depression). The tax policies and welfare state praised by Mr. Piketty played a minor support role.

Golden Age?

Things only get worse from there since the argument is that the reversal of the golden age of egalitarianism from 1914 to 1980 is due to a reversal of social-democratic policies (and a turn to far more ‘liberal’ policies). In recent years, a great deal of attention has been dedicated to the estimates of inequality after the 1960s. They all show the same thing. For example, Gerald Auten and David Splinter show that the ‘golden age’ of equality was overstated. Once correcting for tax policies that altered how income was reported, they find inequality rose far more modestly. Whereas Piketty estimates the top 1% share of income rising from between 12% and 14% in the 1960 to 1980 period to 20% today, Auten and Splinter place it at between 8% and 10% in the 1960 to 1980 period with a rise to 14% today. Those results are confirmed in separate works using different methods.

Auten and Splinter also reveal that after taxes and redistribution, inequality has not risen since 1960—despite smaller government and lower tax rates—undercutting Piketty’s case for high taxation and expansive welfare states. That finding is echoed in the work of Sylvain Catherine, Max Miller and Natasha Sarin, who showed that once the valuation of social security (National Insurance in Britain) is accounted for, there are no wealth inequality changes between 1960 and today. The welfare state, despite claims to it being slashed, did what it aimed to do—redistribute and moderate inequality. Given that social security is only a part of the welfare state, this also indicts the broader claims that massive expansions of the welfare state generated the golden age.

Other parts of the book are even more problematic than this. Chapter 8 is one of the lesser offenders in that matter. There, Piketty speaks of educational equality. This is in line with a standard view in economics that human capital is important to growth and that inequality affects the capacity to make human capital investments for poor people. Nothing controversial there even if there are quibbles on details. In any case, the importance of human capital to growth and development (especially of the poor) is empirically well documented. When discussing the leveling of 1914 to 1980 and then when discussing what would be needed to generate further leveling in the future, the answer is ‘more education’ and ‘more educational access’. The problem is that there is an implicit assumption that all of the gains in human capital can be attributed to the state’s efforts to provide schooling. Ergo, since schooling reduced inequality and schooling is state-provided, more state-provided schooling is needed. There is a vast literature showing that state provision of education is often of low-quality in developing countries and that a sizable chunk of improvements in human capital (which then contributed to reductions in global economic inequality) actually comes from the market-based provision of schooling. Moreover, empirical studies of ‘educational mobility’—which compare the educational attainment of parents with that of their children—as well as studies of educational achievements over time (without comparing children and parents) consistently indicate that regions characterized by lower tax burdens and greater economic freedom exhibit higher levels of upward mobility in education and higher levels of educational achievements.

In other words, the very institutional arrangements and policy frameworks that Piketty criticizes as obstacles to equality appear, in practice, to foster intergenerational progress in educational achievement. Far from hindering mobility, economic freedom and moderate taxation seem to create an environment in which children are more likely to surpass the educational outcomes of their parents. What this chapter amounts to is a complaint about ‘not enough’ (an arguably fair complaint) and then a series of rehashed clichés about solutions for which there are good reasons (not discussed and ignored) to believe would make things worse.

Social Mobility and Alternative Welfare States

The most important criticism, however, concerns something barely mentioned in the book—social mobility. The word mobility itself appears only once (page 121). There is a well-documented link between inequality and social mobility, with the logical connection being that inequality limits the ability of the poor, all else equal, to seize opportunities for upward advancement relative to the rich. This is why some speak of the ‘social reproduction of inequality,’ often with tedious distinctions that are without real differences. Yet, that argument has merit. Yet another, equally (and maybe even superior) meritorious argument exists: market-based economies systematically display higher intergenerational and intra-generational income and social mobility.

Using economic freedom indices (notably the Fraser Institute’s Economic Freedom of the World), one can assume that higher scores correspond to more capitalist economies with more liberal policies—precisely less of what Piketty prescribes. Evidence shows that ‘big liberalizations’ not only raise average incomes but also lift those in the bottom deciles along with the top, leaving inequality relatively unchanged. Conceptually similar results apply to economically disadvantaged groups such as women who gain noticeably from liberalizations (there is evidence that this applies to minority groups as well). Crucially, such liberalizations also generate large increases in income mobility. These causal results align with a growing body of associational studies linking economic freedom to greater upward mobility—relationships consistently stronger than those between inequality and mobility.

The reason for this connection is that the welfare state advocated by Piketty does have some potential for uplifting. However, through taxation, it can also discourage effort and innovation, thereby pushing people down. A modest welfare state—designed to target help while minimizing these downsides—is possible. Such a welfare state can be found in the visions of Milton Friedman and Charles Murray (libertarians), Marcel Boyer and Peter Lindert (social democrats), and Arthur Brooks (a conservative). Yet the key ingredient accompanying it must be open markets, minimal regulation, a limited state, and secure property rights (another term that appears only rarely in the book, and when it does, it carries a soupçon of disdain). Ignoring this point—as I was compelled to emphasize earlier in a symposium in Analysis & Kritik (in which Piketty participated, alongside my coauthor Nick Cowen of the University of Lincoln, to discuss another book which is a longer pre-iteration of this book)—is essential for Piketty. After all, the book is a political manifesto. It is not meant to engage with academic or scholarly arguments.

Indeed, to paraphrase Percy Shelley’s Ozymandias, little beside remains of A Brief History of Equality. Round the decay of its pretensions to scholarly output, the only monument left standing is a political manifesto. If the mighty seek to run for office, they may find some use in these pages; so too might Piketty himself, should ambition turn him toward politics. But manifestos are poor substitutes for analysis. They bend to fashion and fleeting desires for fame and popularity, drift with the winds of ideology, and mistake slogans for substance. What endures is not truth, but rhetoric. And, as with so many manifestos before, the time will come when even this too will be forgotten—leaving nothing besides.

‘A Brief History of Equality’ by Thomas Piketty was published in 2022 by Harvard University Press (ISBN: 978-0-674-27355-9. 288pp.

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tVincent Geloso is assistant professor of economics at George Mason University and fellow at the Centre interuniversitaire de recherche en analyse des organisations (CIRANO). He has published multiple articles on estimating historical income inequality in multiple journals such Economic Journal, Economic Inquiry, Cliometrica and Southern Economic Journal. He is also senior economist for the Institut économique de Montréal.