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Extreme Economies: Survival, Failure, Future – Lessons from the World’s Limits
To understand how humans react and adapt to economic change we need to study people who live in harsh environments. From war zones, natural disasters and failed states, to aging societies and the challenges of technological advancement, every life in this book has been hit by a seismic shock, violently broken or changed in some way.
People living in these odd and marginal places are ignored by number crunching economists and political pollsters alike. Science suggests this is a mistake. This book tells the personal stories of humans living in extreme situations, and of the financial infrastructure they create. Here, economies are not concerned with the familiar stock market crashes, housing crises, or banking scandals of the financial pages.
In his quest for a purer view of how economies succeed and fail, Richard Davies takes the reader off the beaten path to places where part of the economy has been repressed, removed, destroyed or turbocharged. By travelling to each of them and discovering what life is really like, Extreme Economies tells small stories that shed light on today’s biggest economic questions, with vital lessons for our future.
People living in these odd and marginal places are ignored by number crunching economists and political pollsters alike. Science suggests this is a mistake. This book tells the personal stories of humans living in extreme situations, and of the financial infrastructure they create. Here, economies are not concerned with the familiar stock market crashes, housing crises, or banking scandals of the financial pages.
In his quest for a purer view of how economies succeed and fail, Richard Davies takes the reader off the beaten path to places where part of the economy has been repressed, removed, destroyed or turbocharged. By travelling to each of them and discovering what life is really like, Extreme Economies tells small stories that shed light on today’s biggest economic questions, with vital lessons for our future.
320 pages, Hardcover
First published January 1, 2020
About the author
Richard Davies
167 books9 followersThere is more than one author with this name. For the economist, please see Richard Davies
My teaching and research have evolved over a career that began nearly fifty years ago with a traditional graduate education at the University of Missouri in American political history. After completing a dissertation on the politics of urban redevelopment and public housing in 1963, I developed a teaching and publications portfolio emphasizing twentieth century political and urban history. Early publications included: Housing Reform During the Truman Administration (1966), an anthology edited with Frank Mitchell on political and social history since 1900 entitled America’s Recent Past (1968), and an examination of the Eisenhower Administration’s creation of the Interstate Highway System: The Age of Asphalt; The Automobile, the Freeway, and the Condition of Urban America (1975).
After a seventeen-year hiatus in the higher echelons of academic administration, I returned to a professorship in 1987. After completing a political biography of a mid-twentieth century political conservative icon, Defender of the Old Guard: John W. Bricker and American Politics (1993), I turned my attention to two areas of social history, small town America and American sports history.
In 1994 America’s Obsession; Sports and Society Since 1945 appeared as a companion to my creation of what has become a heavily-enrolled senior level course in American sports history. This research interest was extended with an examination of a topic that resonates within the state of Nevada, Betting the Line; Sports Wagering in American Life (2002, with Richard G. Abram), and in 2007 Blackwell Publishing released my most demanding writing endeavor, a comprehensive text that seeks to interpret the role of sports in American history from the colonial times to the present. Sports in American Life; A History is intended for classroom use in the rapidly expanding field of sports history.
During the 1990s I also turned my attention to the history of America’s small towns by examining the small town Ohio birthplace of novelist Sherwood Anderson from its founding in 1803 until the time the book was published in 1998; Main Street Blues; The Decline of Small Town America apparently struck a sensitive nerve because of the depressing story it told, and the book attracted considerable attention from professional historians and lay readers. Main Street Blues was followed up by an anthology edited with two excellent scholars of the same subject, Joseph Amato and David Pichaske, A Place Called Home, Readings on The Midwestern Small Town (2003).
In 1999, I edited a series of original essays that sought to connect my interest in post World War II America to the unique history of my adopted state, and derived great satisfaction from the success of The Maverick Spirit; Building the New Nevada. All of these books have been accompanied by a substantial number of academic articles and encyclopedia entries, and I would like the believe that my research efforts have enriched my teaching efforts in the University’s core curriculum humanities course as well as my upper divisions and graduate courses in twentieth century American history.
Current research builds upon previous work with a book-length project on the fascinating saga of major sports rivalries, and more long-term, I envisage an examination of the ambivalence with which Americans have viewed gambling throughout American history.
My teaching and research have evolved over a career that began nearly fifty years ago with a traditional graduate education at the University of Missouri in American political history. After completing a dissertation on the politics of urban redevelopment and public housing in 1963, I developed a teaching and publications portfolio emphasizing twentieth century political and urban history. Early publications included: Housing Reform During the Truman Administration (1966), an anthology edited with Frank Mitchell on political and social history since 1900 entitled America’s Recent Past (1968), and an examination of the Eisenhower Administration’s creation of the Interstate Highway System: The Age of Asphalt; The Automobile, the Freeway, and the Condition of Urban America (1975).
After a seventeen-year hiatus in the higher echelons of academic administration, I returned to a professorship in 1987. After completing a political biography of a mid-twentieth century political conservative icon, Defender of the Old Guard: John W. Bricker and American Politics (1993), I turned my attention to two areas of social history, small town America and American sports history.
In 1994 America’s Obsession; Sports and Society Since 1945 appeared as a companion to my creation of what has become a heavily-enrolled senior level course in American sports history. This research interest was extended with an examination of a topic that resonates within the state of Nevada, Betting the Line; Sports Wagering in American Life (2002, with Richard G. Abram), and in 2007 Blackwell Publishing released my most demanding writing endeavor, a comprehensive text that seeks to interpret the role of sports in American history from the colonial times to the present. Sports in American Life; A History is intended for classroom use in the rapidly expanding field of sports history.
During the 1990s I also turned my attention to the history of America’s small towns by examining the small town Ohio birthplace of novelist Sherwood Anderson from its founding in 1803 until the time the book was published in 1998; Main Street Blues; The Decline of Small Town America apparently struck a sensitive nerve because of the depressing story it told, and the book attracted considerable attention from professional historians and lay readers. Main Street Blues was followed up by an anthology edited with two excellent scholars of the same subject, Joseph Amato and David Pichaske, A Place Called Home, Readings on The Midwestern Small Town (2003).
In 1999, I edited a series of original essays that sought to connect my interest in post World War II America to the unique history of my adopted state, and derived great satisfaction from the success of The Maverick Spirit; Building the New Nevada. All of these books have been accompanied by a substantial number of academic articles and encyclopedia entries, and I would like the believe that my research efforts have enriched my teaching efforts in the University’s core curriculum humanities course as well as my upper divisions and graduate courses in twentieth century American history.
Current research builds upon previous work with a book-length project on the fascinating saga of major sports rivalries, and more long-term, I envisage an examination of the ambivalence with which Americans have viewed gambling throughout American history.
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Displaying 1 - 30 of 127 reviews
January 19, 2024
In this book the author describes visits to 9 locations around the world that fit the description in the title. His overall argument is that observing these “extreme economies” tells us about how economics works in more mainstream circumstances.
The book is divided into 3 parts and in the first section “Resilience”, the author looks at economies that operate well in adverse circumstances. He opens with Aceh in Sumatra, which had to recover from the tsunami of 2004. In this chapter Davies stresses the value of “human capital”. Economies will recover from disaster as long as there are people left with the skills, knowledge and drive to rebuild. One point he makes is that places which have been completely destroyed have an opportunity to build improved infrastructure, noting the examples of Japan and West Germany post WW2. The other chapters in this section examine a Syrian refugee camp in Jordan and the Louisiana State Penitentiary in the USA. In both locations the refugees and prisoners have developed an “underground” economy despite severe restrictions against doing so. They have had to develop ingenious ways to get round those.
The next section, entitled “Failure”, looks at environmental degradation in Darien in Panama, and the abject poverty of Kinshasa in DR Congo. Interestingly for me it also features the city of Glasgow in Scotland, only about 100 miles from where I live. I confess I was a little surprised at its inclusion. Whilst Glasgow has its share of problems I hadn’t really considered it comparable with somewhere like Kinshasa, but the author explains that it is an “extreme” economy because it has suffered a steeper decline than any other city. That’s fair enough, and the author’s arguments about the reason for the decline have some merit, though personally I think his description of 19th and 20th century Glasgow was a bit idealised. The section on Kinshasa was one of the most interesting. The city is a classic case of the harm caused by bad governance, specifically corruption. The DR Congo state has become a giant parasite that sucks all the wealth from the population. This isn’t just high-level corruption but extends to people like teachers and ordinary policemen. It’s hard to see how the city and the country can get out of the quagmire they are in.
The last section considers future issues, and begins with the city of Akita in Japan, a country with an ageing and falling population. Japan is the trend-setter in this, but it seems that South Korea, Portugal, Spain, and Italy are not far behind. A falling population brings many economic challenges. The author moves onto to Tallinn in Estonia, a country noted for digital and technological innovation, before ending with a look at Santiago in Chile. The country has seen rapid economic growth in the last 40 years and is now the richest in South America. This has come alongside a growth in inequality that itself generates social instability. This was one of the most interesting chapters and is politically balanced, noting that rapid economic growth is closely associated with a rise in inequality, and asking how we can best arrive at a formula that works for everyone. For the author, the ageing world population, the use of technology, and economic inequality will be three of the biggest issues to be addressed over the next decade or so.
I thought Extreme Economies was a well-written and well-argued text. Not all of it was totally new to me but there was still plenty of insight. Climate change campaigners will disagree with the author's choice of the 3 big issues of the next decade. They may have a point, but there’s nothing wrong with looking at 3 other important issues that have received a great deal less attention.
The book is divided into 3 parts and in the first section “Resilience”, the author looks at economies that operate well in adverse circumstances. He opens with Aceh in Sumatra, which had to recover from the tsunami of 2004. In this chapter Davies stresses the value of “human capital”. Economies will recover from disaster as long as there are people left with the skills, knowledge and drive to rebuild. One point he makes is that places which have been completely destroyed have an opportunity to build improved infrastructure, noting the examples of Japan and West Germany post WW2. The other chapters in this section examine a Syrian refugee camp in Jordan and the Louisiana State Penitentiary in the USA. In both locations the refugees and prisoners have developed an “underground” economy despite severe restrictions against doing so. They have had to develop ingenious ways to get round those.
The next section, entitled “Failure”, looks at environmental degradation in Darien in Panama, and the abject poverty of Kinshasa in DR Congo. Interestingly for me it also features the city of Glasgow in Scotland, only about 100 miles from where I live. I confess I was a little surprised at its inclusion. Whilst Glasgow has its share of problems I hadn’t really considered it comparable with somewhere like Kinshasa, but the author explains that it is an “extreme” economy because it has suffered a steeper decline than any other city. That’s fair enough, and the author’s arguments about the reason for the decline have some merit, though personally I think his description of 19th and 20th century Glasgow was a bit idealised. The section on Kinshasa was one of the most interesting. The city is a classic case of the harm caused by bad governance, specifically corruption. The DR Congo state has become a giant parasite that sucks all the wealth from the population. This isn’t just high-level corruption but extends to people like teachers and ordinary policemen. It’s hard to see how the city and the country can get out of the quagmire they are in.
The last section considers future issues, and begins with the city of Akita in Japan, a country with an ageing and falling population. Japan is the trend-setter in this, but it seems that South Korea, Portugal, Spain, and Italy are not far behind. A falling population brings many economic challenges. The author moves onto to Tallinn in Estonia, a country noted for digital and technological innovation, before ending with a look at Santiago in Chile. The country has seen rapid economic growth in the last 40 years and is now the richest in South America. This has come alongside a growth in inequality that itself generates social instability. This was one of the most interesting chapters and is politically balanced, noting that rapid economic growth is closely associated with a rise in inequality, and asking how we can best arrive at a formula that works for everyone. For the author, the ageing world population, the use of technology, and economic inequality will be three of the biggest issues to be addressed over the next decade or so.
I thought Extreme Economies was a well-written and well-argued text. Not all of it was totally new to me but there was still plenty of insight. Climate change campaigners will disagree with the author's choice of the 3 big issues of the next decade. They may have a point, but there’s nothing wrong with looking at 3 other important issues that have received a great deal less attention.
October 23, 2019
The name of the book is Extreme Economies, not Extreme Economics and the idea behind it is intriguing. Richard Davies visits cities, regions and cities that are experiencing today what most of the world will probably be experiencing in a few years time, such as disaster, aging, inequality and technology replacing human jobs. It is economic prediction by extreme. He is highly successful, by mixing personal testaments with more deep economic analysis. My feeling is that he is able to paint a coherent picture and reach some intuitive conclusions regarding human behaviour and how to cope with challenges.
April 3, 2020
Extreme Economies : Survival, Failure, Future – Lessons from the World’s Limits (2019) by Richard Davies is an excellent book that has chapters on extreme economies around the world. Davies is the former economics editor of The Economist and is an economics fellow at the LSE. He may also have founded Supertramp, but perhaps not. Russ Roberts also recently interviewed Davies on Econtalk for anyone who wants to get an idea of whats in the book.
The places examined are grouped into three groups, survival, failure and future. In the survival section there is Aceh after the Tsunami, the Syrian refugee camps of Zataari and a Lousiana high security prison. In the failure section is Glasgow, the city of Kinshasa and the Darien Gap between South and Central America. In the future section Akita, a very aged part of Japan, Talin for technology and Santiago for inequality are examined.
It's hard to extract highlights from the book because most of the chapters are really fascinating. Zataari and the Lousiana prison are really remarkable. The examination of the currencies that people create is amazing. The section on Akita was also really illuminating. But all the chapters are really interesting.
Extreme Economies is very well written and is very accessible. It's a fascinating and highly enjoyable read. For anyone interested in economics and popular economics books it's definitely worth a look.
The places examined are grouped into three groups, survival, failure and future. In the survival section there is Aceh after the Tsunami, the Syrian refugee camps of Zataari and a Lousiana high security prison. In the failure section is Glasgow, the city of Kinshasa and the Darien Gap between South and Central America. In the future section Akita, a very aged part of Japan, Talin for technology and Santiago for inequality are examined.
It's hard to extract highlights from the book because most of the chapters are really fascinating. Zataari and the Lousiana prison are really remarkable. The examination of the currencies that people create is amazing. The section on Akita was also really illuminating. But all the chapters are really interesting.
Extreme Economies is very well written and is very accessible. It's a fascinating and highly enjoyable read. For anyone interested in economics and popular economics books it's definitely worth a look.
September 14, 2019
Excellent. Richard travels to nine very different extreme economies to learn about survival, failure and the future. A wonderful combination of immersive travel and popular economics reminiscent of Reggie Yates and Tim Harford. The book is both easily digestible and packed with historical context, travel stories, economic assessment and intuitive thinking. I particularly enjoyed the future economies at the end, none of which I had thought about in this level of detail before.
October 30, 2024
Little too high-level but some interesting case studies. worth a read
August 3, 2020
In Extreme Economies, Richard Davies combines a background in journalism and economics as he asks what we can learn from extreme economies that have survived in the face of catastrophe, that have failed in spite of advantage, and that seem like windows into the future. Not only does Davies go to many places that I would struggle to locate on a map, but he also considers problems that I think many people don't think about. By this I mean that while people know there are refugee camps, I doubt many can say where they are, how they're run, or even who runs them. People might know that Japan has an ageing population, but what other countries face shrinking populations? (Nearly every country in the West has an ageing population and often a conservative one that a) insists on longterm care in retirement and b) opposes increasing immigration to pay for it. How will that happen?) Extreme Economies left me with a deeper appreciation of the economy, GDP, income inequality, institutional strength, international awareness, and also the idea of social capital. If Davies has a blind spot, it's climate and ecology, but, ironic or not, he is hardly the only economist who struggles in that regard.
Notes.
Notes.
January 4, 2026
Provides a fresh, human-centered approach to economics that makes me actually excited to study it. Had my full attention from start to finish. Good work, Professor Davies!
A couple of quotes that stuck out to me:
“Measuring economic strength through the lens of GDP certainly has perplexing results in that an economy can grow faster after a disaster. But that oddity, which some take as evidence of the cold, callous nature of economics, is because GDP is all about current human activities - spending, wages, income, producing goods - rather than the value embodied in physical assets such as buildings and factories. Far from being a mean or cold measure, economists' favourite yardstick is a fundamentally human one.”
“These missing pieces of economics - informality in our income, human and social capital in our wealth - can be shadowy and hard to measure. But by failing to take them into account we are missing huge chunks of the economy. Our economic picture is incomplete, inhibiting our ability to assess the trends set to shape the economy of the near future.”
A couple of quotes that stuck out to me:
“Measuring economic strength through the lens of GDP certainly has perplexing results in that an economy can grow faster after a disaster. But that oddity, which some take as evidence of the cold, callous nature of economics, is because GDP is all about current human activities - spending, wages, income, producing goods - rather than the value embodied in physical assets such as buildings and factories. Far from being a mean or cold measure, economists' favourite yardstick is a fundamentally human one.”
“These missing pieces of economics - informality in our income, human and social capital in our wealth - can be shadowy and hard to measure. But by failing to take them into account we are missing huge chunks of the economy. Our economic picture is incomplete, inhibiting our ability to assess the trends set to shape the economy of the near future.”
August 12, 2020
This book has its roots in racist travel guides written by privileged white people who go to "exotic" places and thrill readers at home with their edgy encounters with "natives," dangerous animals, or the extremes of weather. While Davies tries to appear progressive by giving passing lip service to the role the US and CIA played in the overthrow of Lumumba (Congo, 1961) and Allende (Chile, 1973), his big message is simplistic and reactionary: Watch out! This could happen to YOU (comfortable, middle class US Americans and Europeans). So let's see what we can learn from the poor but heroic people living on garbage dumps and in prison.
Needless to say, Davies is short on analysis when it comes to the role of racist capitalism in destroying the economies of Latin America, Africa, and Asia. Yes, you'll hear the word "colonialism" but there's no story of the systemic, ongoing rape and pillage of all his locales by US and European neocolonialism. Davies goes to the Democratic Republic of Congo and talks about King Leopold and his murderous quest for rubber. But he leaves out WHY the people are poor today--foreign corporations are making billions off the coltan that goes into computers and cell phones, coltan mined by starved workers caught and killed (millions have died) in proxy wars. Instead, you are left with the racist stereotype of African nations that are too ignorant and corrupt to run their own countries after their white masters leave.
Davies even goes to Angola prison in Alabama without talk about institutional racism being the cause of the mass incarceration of Black people. No mention of the Black Panthers who spent decades in solitary confinement in Angola. Instead, he shows how prisoners are hustling (just like the other poor people he's interviewed)--why, look at how creative poor people can be in their own limited "free markets."
His big simplistic take away is, you need the free market,, but not TOO much. You need some social controls, but not TOO much. Freedom of the market place, even if you're living on top of a garbage dump, fills a "basic human need" for creativity and self-expression. This is really patronizing. Of course people are creative. Of course they will find legal and illegal ways to work the system to survive. But the vignettes he presents are not "extremes." They are the norm. Davies ignores the fact that half the world is living in poverty. 900 million people in India live on 50 cents a day. Nations run by corporations and the 1% wage wars to protect profits, wasting millions of lives and trillions of dollars. .
Davies knows that the "s--t is about to hit the fan," and that the masses will come to the conclusion that capitalism, despite its army of economists like him, is a total failure except for the privileged few. Its insatiable, legally mandated drive to maximize profits has destroyed the world and billions of lives. In fact, capitalism NEEDS poor people. They compete for jobs and are laid off to meet the needs of the corporation. "Moderation" is not the cure--as Davies knows full well, the Golden Rule is "Those who own the gold make the rules."
Needless to say, Davies is short on analysis when it comes to the role of racist capitalism in destroying the economies of Latin America, Africa, and Asia. Yes, you'll hear the word "colonialism" but there's no story of the systemic, ongoing rape and pillage of all his locales by US and European neocolonialism. Davies goes to the Democratic Republic of Congo and talks about King Leopold and his murderous quest for rubber. But he leaves out WHY the people are poor today--foreign corporations are making billions off the coltan that goes into computers and cell phones, coltan mined by starved workers caught and killed (millions have died) in proxy wars. Instead, you are left with the racist stereotype of African nations that are too ignorant and corrupt to run their own countries after their white masters leave.
Davies even goes to Angola prison in Alabama without talk about institutional racism being the cause of the mass incarceration of Black people. No mention of the Black Panthers who spent decades in solitary confinement in Angola. Instead, he shows how prisoners are hustling (just like the other poor people he's interviewed)--why, look at how creative poor people can be in their own limited "free markets."
His big simplistic take away is, you need the free market,, but not TOO much. You need some social controls, but not TOO much. Freedom of the market place, even if you're living on top of a garbage dump, fills a "basic human need" for creativity and self-expression. This is really patronizing. Of course people are creative. Of course they will find legal and illegal ways to work the system to survive. But the vignettes he presents are not "extremes." They are the norm. Davies ignores the fact that half the world is living in poverty. 900 million people in India live on 50 cents a day. Nations run by corporations and the 1% wage wars to protect profits, wasting millions of lives and trillions of dollars. .
Davies knows that the "s--t is about to hit the fan," and that the masses will come to the conclusion that capitalism, despite its army of economists like him, is a total failure except for the privileged few. Its insatiable, legally mandated drive to maximize profits has destroyed the world and billions of lives. In fact, capitalism NEEDS poor people. They compete for jobs and are laid off to meet the needs of the corporation. "Moderation" is not the cure--as Davies knows full well, the Golden Rule is "Those who own the gold make the rules."
February 25, 2020
This was a fascinating and largely non-partisan overview of how economies in different parts of the world work. The author visits places across the world, and tries to paints a narrative picture of how different economic models have performed in varying conditions.
The interview and enquiry driven nature of the author's work means that he is able to make arguments that more data-driven economists would be unable to support, but also mean that his insights could be biased by his relatively narrow sliver of observations. Moreover, his status as an affluent foreigner interviewing everyday local people also means that he may not have captured the true essence of a region's zeitgeist.
These factors notwithstanding, this was a fascinating read. My main takeaways were:
1. Unplanned, “messy” economies often work better than centrally-planned and organised ones. This is seen in both Aceh reconstruction projects (planned cities are ghost towns while unplanned "shanty" towns have a more lively economy) and refugee camps in Jordan (planned camps are far less economically efficient than unplanned one)
2. When you restrict an economy by not allowing people to buy what they want, they often create workarounds by buying stuff they don’t want, and then bartering it for cash or stuff they really want from smugglers. Policy-makers should always keep this in mind when drafting legislation
3. The tragedy of the commons is real. Markets can lead to conclusions that are bad in the long run if left unregulated. But it’s difficult to figure out the right level of regulation. For instance, you can have a maximum logging quota by weight to prevent deforestation of rainforests. But the implication might be that choppers cut a lot of wood, but only take the best with them — leading perfectly usable wood to be wasted in the forest. Similarly, by creating incentives for reforestation but not specifying the right kind of trees, the trees planted can often do long term harm to the ecosystem
4. Very frequent taxation and regulatory capture can make business impossible — which completely messes up an economy. This is a huge reason why efficient businesses have failed to emerged in places like Kinshasa
5. Regulations becomes very harmful when their objective becomes revenue, instead of policing
6. When a city depends almost entirely on one industry — it’s vulnerable to becoming a ghost town of the industry collapses. When this happens, life expectancy falls, suicides and drug overdoses rise, and mental health problems abound. Post shipping Glasgow is an example of this
7. Extreme anti-market (planned economy) and extreme pro-market (laissez faire) policies both often lead to long-term disaster. While ignoring inequality to optimise for increasing absolute incomes at all levels is a worthwhile goal in the short-term, inequality must be tackled to maintain social cohesion in the long term
The interview and enquiry driven nature of the author's work means that he is able to make arguments that more data-driven economists would be unable to support, but also mean that his insights could be biased by his relatively narrow sliver of observations. Moreover, his status as an affluent foreigner interviewing everyday local people also means that he may not have captured the true essence of a region's zeitgeist.
These factors notwithstanding, this was a fascinating read. My main takeaways were:
1. Unplanned, “messy” economies often work better than centrally-planned and organised ones. This is seen in both Aceh reconstruction projects (planned cities are ghost towns while unplanned "shanty" towns have a more lively economy) and refugee camps in Jordan (planned camps are far less economically efficient than unplanned one)
2. When you restrict an economy by not allowing people to buy what they want, they often create workarounds by buying stuff they don’t want, and then bartering it for cash or stuff they really want from smugglers. Policy-makers should always keep this in mind when drafting legislation
3. The tragedy of the commons is real. Markets can lead to conclusions that are bad in the long run if left unregulated. But it’s difficult to figure out the right level of regulation. For instance, you can have a maximum logging quota by weight to prevent deforestation of rainforests. But the implication might be that choppers cut a lot of wood, but only take the best with them — leading perfectly usable wood to be wasted in the forest. Similarly, by creating incentives for reforestation but not specifying the right kind of trees, the trees planted can often do long term harm to the ecosystem
4. Very frequent taxation and regulatory capture can make business impossible — which completely messes up an economy. This is a huge reason why efficient businesses have failed to emerged in places like Kinshasa
5. Regulations becomes very harmful when their objective becomes revenue, instead of policing
6. When a city depends almost entirely on one industry — it’s vulnerable to becoming a ghost town of the industry collapses. When this happens, life expectancy falls, suicides and drug overdoses rise, and mental health problems abound. Post shipping Glasgow is an example of this
7. Extreme anti-market (planned economy) and extreme pro-market (laissez faire) policies both often lead to long-term disaster. While ignoring inequality to optimise for increasing absolute incomes at all levels is a worthwhile goal in the short-term, inequality must be tackled to maintain social cohesion in the long term
November 9, 2019
The nine chapters of this book tell different stories of how economies develop, whether formal or informal.
All of the chapters are intriguing and interesting, however some felt a little more contrived in their conclusions than others.
Most of the chapters really gave me something to think about which is one of the things I always look for in a book.
Overall close to 5 stars and definitely a book I'd recommend to people interested in how people interact in extreme circumstances as well as those economically minded.
All of the chapters are intriguing and interesting, however some felt a little more contrived in their conclusions than others.
Most of the chapters really gave me something to think about which is one of the things I always look for in a book.
Overall close to 5 stars and definitely a book I'd recommend to people interested in how people interact in extreme circumstances as well as those economically minded.
October 17, 2022
Feels more like a book written to make a certain word count and deadline rather than a result of deep research. Travel anecdotes, random statistics and bits and pieces of economic history. I thought the author was an actual economist but it looks like there is an author with the same name as him who is an economist and the author of the book has no background in economics.
May 24, 2020
Excellent book with an interesting conclusion on the future of the economics of life. Reviewing different cities and population centers that have "extreme economies," such as remarkable resurgence in the aftermath of catastrophe, and the sophisticated development of informal markets in spite of heavy government controls, the author makes excellent observations about how economies work.
If I may offer one criticism, I was left wondering about some seeming contradictions of observations of the supposed effects of the "Chicago School"-derived policies in Chile. The economic problems seem to be a product of the described government interventions, rather than free markets that the Chicago School prescribed. Lastly, the author seems to conclude that boundless human ingenuity that is allowed to flourish works. I wish the author would have gone into detail about the seeming paradox of the possible adulteration of the academic recipe in the hands of bureaucrats.
If I may offer one criticism, I was left wondering about some seeming contradictions of observations of the supposed effects of the "Chicago School"-derived policies in Chile. The economic problems seem to be a product of the described government interventions, rather than free markets that the Chicago School prescribed. Lastly, the author seems to conclude that boundless human ingenuity that is allowed to flourish works. I wish the author would have gone into detail about the seeming paradox of the possible adulteration of the academic recipe in the hands of bureaucrats.
January 27, 2022
Interesting blend of economics / finance, travel and anthropology, drawing on an impressively broad range of marginal case studies - from US prison currency and Syrian refugee camps to Kinshasa's corruption hell. It's fairly high level on what it actually teaches us about economics (hello Maslow), but pretty decent on what works and what doesn't, and the baleful threat of the 'tragedy of the commons' in many of these situations.
The premise - that we can learn from behaviour in extreme circumstances - is pretty compelling and in some ways the 'travel writing' aspect of the book make it a pretty irresistible proposition for someone who owns loads of 'work books' but can rarely bring himself to read them at leisure.
One MASSIVE howler, mind you - that shocks me as much as any obvious error in an otherwise well written book: it's Augusto Pinochet. Not 'Augustine'. Such a basic mistake. Reminds me of those textbooks where someone refers to 'Adolph Hitler'.
The premise - that we can learn from behaviour in extreme circumstances - is pretty compelling and in some ways the 'travel writing' aspect of the book make it a pretty irresistible proposition for someone who owns loads of 'work books' but can rarely bring himself to read them at leisure.
One MASSIVE howler, mind you - that shocks me as much as any obvious error in an otherwise well written book: it's Augusto Pinochet. Not 'Augustine'. Such a basic mistake. Reminds me of those textbooks where someone refers to 'Adolph Hitler'.
December 1, 2020
10 points for being the first popular book to mention Playtech... and other technology companies in Estonia (Click&Grow, Starship Technologies, Skype) + E-government and other innovations. I've started to give engagement scores to books and this one gets maximum points for engagement. Engagement meaning that when you start the book then it's difficult to put it down and you are looking forward to pick it up again (some other books at the same time are extremely valuable but a real pain to get through). This book could be placed to the "1000 useless facts" category but I believe that it does actually expand one's knowledge in topics that not many books write about. Listing the topics covered to maybe spark interest:
SURVIVAL:
*Acheh post tsunami, Indonesia
*Refugee camp at Zaatari (Syrian)
*Americal prison in Lousiana
FAILURE:
*Darien Camp, Central America (used by Asian immigrants in route to US, this was completely unknown to me)
*Kinshasa, Congo (high unemployment, high taxes and corruption, failing market and government)
*Glasgow, UK (ship building hub, loss of social networks)
FUTURE:
*Akita, Japan (how Japan is dealing with aging society)
*Tallinn, Estonia
*Chile (extreme inequality, collusion along oligopolies)
SURVIVAL:
*Acheh post tsunami, Indonesia
*Refugee camp at Zaatari (Syrian)
*Americal prison in Lousiana
FAILURE:
*Darien Camp, Central America (used by Asian immigrants in route to US, this was completely unknown to me)
*Kinshasa, Congo (high unemployment, high taxes and corruption, failing market and government)
*Glasgow, UK (ship building hub, loss of social networks)
FUTURE:
*Akita, Japan (how Japan is dealing with aging society)
*Tallinn, Estonia
*Chile (extreme inequality, collusion along oligopolies)
May 3, 2020
I found this a fantastic book. The way the book was laid out made the lessons from the book easily digestible and very interesting - nine economic case studies (one chapter for each case study) comprising three economies with extreme events / challenges that have thrived, three economies with extreme events / challenges that have/are failing and there economies with extreme challenges that give us insight into what we will be facing in the future. The narration in the book was clear, colourful and easy to understand. A great book for anyone wanting to learn more about the economy and how it is affected by different policies, cultures etc.
February 4, 2021
I thoroughly enjoyed Extreme Economies. It wasn't quite what I expected, but then I didn't exactly know what to expect. Richard Davies takes the reader around the world exploring and understanding various economies that don't function like the rest of society. I particularly enjoyed the first section on informal economies that spawn out of necessity but the remaining two, one being dysfunctional economies and the other being economies representing the future to be quite insightful as well.
An easy listen/read and one that focused on narrative over economic theory. I recommend the book to anyone that enjoys learning about people, money, and hearing stories about other cultures.
An easy listen/read and one that focused on narrative over economic theory. I recommend the book to anyone that enjoys learning about people, money, and hearing stories about other cultures.
December 31, 2020
Written in a rather hyperbolic tone (what else, for a book which has extreme in the title?), much of this book was informative, but some of it was completely overblown. Where the author's writing touched on my professional experience, I found it came up short, which made me suspicious about the rest of the book.
November 26, 2020
Great analysis of the external forces that drive local economies and the adaptability of mankind. The book is not at all comprehensive or especially homogeneous, but it makes some interesting points.
December 28, 2025
Good read with v interesting examples and lessons from the ‘extreme economies’: Zaatari, Glasgow, Akita & more. Feel like I’ve gained a slightly deeper understanding there.
February 25, 2023
Buku ini secara garis besar dibagi menjadi tiga bagian, yaitu Survival, Failure, dan Future. Bagian survival menceritakan upaya-upaya yang dilakukan oleh penduduk di suatu wilayah untuk bangkit dari keterpurukan yang dialami. Bagian ini sendiri dibagi menjadi tiga bagian, yaitu pesisir Aceh (resiliensi penduduk dalam upayanya menggeliatkan kembali perekonomian pasca tsunami tahun 2004), Kamp Pengungsian Zaatari di Yordania (bagaimana kegiatan ekonomi yang dibiarkan bertumbuh secara organik mampu menggerakkan roda perekonomian), dan penjara Louisiana di Amerika Serikat.
Bagian Failure dibagi menjadi tiga bagian, yaitu The Darien Gap, hutan lindung yang terletak di Panama dan berbatasan langsung dengan Kolombia (ancaman ketika terus memenuhi derasnya arus pasar bebas dan kekeliruan insentif yang diberikan justru memicu eksternalitas negatif), Glasgow di Skotlandia (kegagalan memanfaatkan eksternalitas positif yang muncul di sebuah tempat pembuatan kapal), dan Kinshasa di Democratic Republic Congo.
Bagian ketiga juga dibagi menjadi tiga bagian, yaitu prefektur Akina di Jepang (paradoks yang muncul dalam hyper-aged society), kota Talinn di Estonia (paradoks pemanfaatan teknologi digital secara masif), dan kota Santiago di Chile (ketimpangan yang juga berkembang seiring pertumbuhan pesat ekonomi).
Secara keseluruhan, cara penyampaian buku yang menggabungkan pendekatan ekonomi dan antropologi ini menarik, terutama dari sisi kemanusiaan. Mengangkat sebuah kasus dari sudut pandang orang-orang yang mengalaminya. Di setiap babnya, terlebih dahulu dibahas latar belakang wilayah yang dibahas sehingga pembaca akan mempunyai sedikit gambaran.
Bagian Failure dibagi menjadi tiga bagian, yaitu The Darien Gap, hutan lindung yang terletak di Panama dan berbatasan langsung dengan Kolombia (ancaman ketika terus memenuhi derasnya arus pasar bebas dan kekeliruan insentif yang diberikan justru memicu eksternalitas negatif), Glasgow di Skotlandia (kegagalan memanfaatkan eksternalitas positif yang muncul di sebuah tempat pembuatan kapal), dan Kinshasa di Democratic Republic Congo.
Bagian ketiga juga dibagi menjadi tiga bagian, yaitu prefektur Akina di Jepang (paradoks yang muncul dalam hyper-aged society), kota Talinn di Estonia (paradoks pemanfaatan teknologi digital secara masif), dan kota Santiago di Chile (ketimpangan yang juga berkembang seiring pertumbuhan pesat ekonomi).
Secara keseluruhan, cara penyampaian buku yang menggabungkan pendekatan ekonomi dan antropologi ini menarik, terutama dari sisi kemanusiaan. Mengangkat sebuah kasus dari sudut pandang orang-orang yang mengalaminya. Di setiap babnya, terlebih dahulu dibahas latar belakang wilayah yang dibahas sehingga pembaca akan mempunyai sedikit gambaran.
January 15, 2022
Great read whether you are interested in geography and travel or core economic questions about how we measure and establish economic growth and development.
October 21, 2020
Reads like quality journalism, but packed with serious economics. Fantastic.
November 2, 2021
Very interesting book - finally got to finish it. Would recommend anyone who is interested in economies of different parts of the world.
December 22, 2019
I'm not sure that I am convinced by Davies's thesis that studying extreme economies is useful for understanding and developing policies for the rest of the world. Davies doesn't go into enough detail to seriously argue this.
However, I really enjoyed this book as a hybrid between economics and travel. Much like visiting a market in a foreign country can teach you a lot about the local culture, by looking through the economic lens, Davies reveals some fascinating details that are not apparent to the unaided eye. It is certainly a unique twist on the travelogue.
The last chapters, on aging in Japan, technology in Estonia, and inequality in Chile, are the weakest. (The first two are too generic and familiar, while good argument about education in Chile is not laid out with sufficient detail to be convincing.) But I did like the summary at the end. The book is probably also a decent introduction to economics, as Davies goes out of his way to highlight and explain many of the basic concepts.
> Tax is collected at least once a day in Kinshasa, and many areas have both a morning and an afternoon tax. The rate is high – officially 54 per cent of profits – but what really hurts are all the extra undocumented payments. A restaurateur who runs a cafe and supermarket explains: "Every day I pay tax, and I must pay a bribe in exchange for a receipt for the tax I have just paid, and then I am forced to offer a 'bon prix' on the tax official’s lunch."
> People hold both dollars and francs in their wallets: the dollar to store value over time, and francs for small daily transactions. When shoppers go to the market or a restaurant, for example, they first stop to buy some francs from the exchange trader who will be sitting outside.
> Kinshasa destroys the notion that free markets naturally bounce back or have some self-righting property – a town, city or country can get stuck in a rut and stay there. The result is a megacity with the infrastructure of a village. Home to 10 million people and located on the bank of the world’s most reliable river, it lacks clean water, irrigation and proper sewerage
> Glasgow is an extreme economy because no other city in the twentieth century experienced a decline as severe. To see this, consider the highs and lows. In the late nineteenth century Glasgow was seen as the "Second City of Empire", and in many ways began to outpace the UK’s capital, leading London in art, design and architecture as well as engineering, innovation and trade. Some even referred to it as a "modern Rome". Yet a century later, shipping was gone, unemployment rife and in Calton, a Glaswegian suburb, male life expectancy was just 54.
However, I really enjoyed this book as a hybrid between economics and travel. Much like visiting a market in a foreign country can teach you a lot about the local culture, by looking through the economic lens, Davies reveals some fascinating details that are not apparent to the unaided eye. It is certainly a unique twist on the travelogue.
The last chapters, on aging in Japan, technology in Estonia, and inequality in Chile, are the weakest. (The first two are too generic and familiar, while good argument about education in Chile is not laid out with sufficient detail to be convincing.) But I did like the summary at the end. The book is probably also a decent introduction to economics, as Davies goes out of his way to highlight and explain many of the basic concepts.
> Tax is collected at least once a day in Kinshasa, and many areas have both a morning and an afternoon tax. The rate is high – officially 54 per cent of profits – but what really hurts are all the extra undocumented payments. A restaurateur who runs a cafe and supermarket explains: "Every day I pay tax, and I must pay a bribe in exchange for a receipt for the tax I have just paid, and then I am forced to offer a 'bon prix' on the tax official’s lunch."
> People hold both dollars and francs in their wallets: the dollar to store value over time, and francs for small daily transactions. When shoppers go to the market or a restaurant, for example, they first stop to buy some francs from the exchange trader who will be sitting outside.
> Kinshasa destroys the notion that free markets naturally bounce back or have some self-righting property – a town, city or country can get stuck in a rut and stay there. The result is a megacity with the infrastructure of a village. Home to 10 million people and located on the bank of the world’s most reliable river, it lacks clean water, irrigation and proper sewerage
> Glasgow is an extreme economy because no other city in the twentieth century experienced a decline as severe. To see this, consider the highs and lows. In the late nineteenth century Glasgow was seen as the "Second City of Empire", and in many ways began to outpace the UK’s capital, leading London in art, design and architecture as well as engineering, innovation and trade. Some even referred to it as a "modern Rome". Yet a century later, shipping was gone, unemployment rife and in Calton, a Glaswegian suburb, male life expectancy was just 54.
September 9, 2020
It's a thing of beauty to watch the architect of an iconic building explain how they came up with the design. When they strip out the architectural plan to its bare minimum, just a few lines to illustrate the design. I remember watching the architect of Burj Al Arab, Tom Wright, do this, explaining the sail inspiration behind the tower and I was deeply fascinated. When I read the book description of Extreme Economies, this is what came into my mind's eye. What if we strip the economy to its bare minimum, take out the support structures, the contractors, the interior designers, the engineers what will we be left with?
The book did not pan out according to my expectations but I liked the end result anyway. Richard Davies explored the frontier markets, not the financial market definition of frontier but rather the explorer's definition. These are markets at the very edges of the global supply chains with unique local conditions that they create their own local ecosystems. I could say this and that about the global economy but let me say I enjoyed the stories immensely. I read a chapter a day and it felt like an adventure, today we are in Talinn, tomorrow at Banda Aceh. Davies did a people's research on the matter which interests me more compared to dry tables with this marginal contribution and that GDP based on purchasing power parity. I don't mind the tables and charts it's just that they are not as exciting as reading about a coffee shop owner's experiences before, during and after the Tsunami or a smuggler's calculus through the Darien jungle.
These are good stories told by a reliable, rigorous and most importantly interesting narrator. Stories are humanity's greatest legacy, they open our eyes to new experiences, co-opt the imagination in seeing new vistas and most importantly can be told to anyone not just to a select group who can rattle off abstracts such as PPP, current account deficits and balance of payment health. The book is an awesome read and an all person read.
The book did not pan out according to my expectations but I liked the end result anyway. Richard Davies explored the frontier markets, not the financial market definition of frontier but rather the explorer's definition. These are markets at the very edges of the global supply chains with unique local conditions that they create their own local ecosystems. I could say this and that about the global economy but let me say I enjoyed the stories immensely. I read a chapter a day and it felt like an adventure, today we are in Talinn, tomorrow at Banda Aceh. Davies did a people's research on the matter which interests me more compared to dry tables with this marginal contribution and that GDP based on purchasing power parity. I don't mind the tables and charts it's just that they are not as exciting as reading about a coffee shop owner's experiences before, during and after the Tsunami or a smuggler's calculus through the Darien jungle.
These are good stories told by a reliable, rigorous and most importantly interesting narrator. Stories are humanity's greatest legacy, they open our eyes to new experiences, co-opt the imagination in seeing new vistas and most importantly can be told to anyone not just to a select group who can rattle off abstracts such as PPP, current account deficits and balance of payment health. The book is an awesome read and an all person read.
October 5, 2020
This is a brilliant book for its simplicity. The concept is beautifully simple. Davies follows the lead of medicine and some other sciences in looking at some of the most extreme cases, the outlier cases. Much can be learned in such cases because the examiner can isolate certain variables. The structure of the book is equally beautifully simple, as he writes about three ‘economies’ that have extreme stress – a Syrian refugee camp, the largest US prison, and an area that suffered the most physical loss in the 2004 tsunami – then at economies that are examples of huge economic failures, and finally at three examples that might give clues about the future of technology, inequality and an aging demographic. The research effort put forth by Davies is remarkable in its breadth, and in its personal touch. It’s the mind of an economist with the reporting skills of a seasoned journalist, making the writing simultaneously interpersonal and logical.
The book is a study of resilience. The outcome of the study of extremes is that human and social capital are what most lead to economic resilience and strength. Even in situations of extreme oppression, markets can pop up to fulfill both material demand, but also provide the people involved self-worth and dignity. However, there are also tragic cases like the Darien Gap, where markets have never formed due to the total absence of any meaningful interpersonal trust. Here also is an example of extremely harmful consequences from well-intended regulation.
I would recommend this book to all, but especially to those that don’t consider the human side of markets and how they enable dignity and meaning, or to people that worry about the resiliency or sustainability of society (for example extreme job loss). These are all data not captured in traditional economic measures like GDP. Personally, I found Davies to be very balanced, being careful not to imply that markets are the solution to all our problems.
The book is a study of resilience. The outcome of the study of extremes is that human and social capital are what most lead to economic resilience and strength. Even in situations of extreme oppression, markets can pop up to fulfill both material demand, but also provide the people involved self-worth and dignity. However, there are also tragic cases like the Darien Gap, where markets have never formed due to the total absence of any meaningful interpersonal trust. Here also is an example of extremely harmful consequences from well-intended regulation.
I would recommend this book to all, but especially to those that don’t consider the human side of markets and how they enable dignity and meaning, or to people that worry about the resiliency or sustainability of society (for example extreme job loss). These are all data not captured in traditional economic measures like GDP. Personally, I found Davies to be very balanced, being careful not to imply that markets are the solution to all our problems.
June 3, 2026
Thought-provoking read with an interesting premise that, unfortunately, did not fully live up to its promise.
By his own admission, Davies sets out to study the extremes, as far as economies go, in order to understand how these societies are currently dealing with the types of problems the rest of the world may come to face in the coming decade. With this in mind, he embarks on a journey to a handful of locations experiencing, primarily, three kinds of stress: aging populations, rapid technological advancement, and widening inequality.
These economic dioramas illustrate, for instance, how aging populations are stressing social programs by outliving their retirement funds; how this creates tension between the young, who must contribute but are unlikely to benefit from said programs in comparable measure, and the old, who find themselves surprised by their own longevity and the austere conditions it creates.
In other cases, the locations visited show that these undercurrents, whether through economic policy, technological advancement, government intervention, or all of the above, are driving a wedge between those who can and have benefited from technological advancement and the lottery of globalization, and those who are being left behind. Unemployment, slim educational opportunities, corruption, and lack of access to market participation are the order of the day.
What Davies finds is that in places where formal markets have failed, and where economic policy has been more of a hindrance than an asset, it is the innate resilience and ingenuity of people, embodied by the prevalence of informal markets and trade, that comes to the rescue. These places, he argues, offer lessons for how we might deal with similar calamities in the future. In other words, human capital should be given more consideration than purely economic or industrial levers.
My main issue with the book is not the premise, but the execution. The book could just as easily have been called Extreme Societies, Extreme Travel with an Economist, Extreme Resilience, or maybe even Extreme 2030: What Japan, Panama, Estonia, Chile, and the Congo... You get it. The “economies” bit is a little tenuous and, honestly, almost interchangeable with other conditions. In each location, Davies describes with aplomb the issues afflicting these places, but the economic forces that underpin them are treated with much less enthusiasm. So we get the picture, but not always the artist’s message.
If I had to be blunt, his voice sometimes seems to lack the guts to say what he really thinks. He often beats around the bush, seemingly hoping not to offend anyone. So we get timid opinions disguised as impartial observation. Anectdotal and ineffective.
Then we get to his overarching message, which is that we need more “resilience,” and that human capital ought to be developed in lockstep with technological advancement if we want to avoid the perils described herein.
All that is fine, but if my previous readings on economics have taught me anything, it is that informal markets and economic resilience are often markers of broken economic policy and failed markets, not features of healthy ones.
Overall, it is still a worthwhile read. The premise is strong, the reporting is interesting, and there are plenty of thought-provoking moments. But it is not groundbreaking by any stretch, and for a book called Extreme Economies, I wanted more economy and a little less travelogue.
By his own admission, Davies sets out to study the extremes, as far as economies go, in order to understand how these societies are currently dealing with the types of problems the rest of the world may come to face in the coming decade. With this in mind, he embarks on a journey to a handful of locations experiencing, primarily, three kinds of stress: aging populations, rapid technological advancement, and widening inequality.
What do the world’s most extreme economies say about the stresses and strains of 2030, and how we should prepare for them?
The year 2030, for most people on earth, will be a cocktail of these three cities: an urban society that is old, technologically advanced and economically unequal.
These economic dioramas illustrate, for instance, how aging populations are stressing social programs by outliving their retirement funds; how this creates tension between the young, who must contribute but are unlikely to benefit from said programs in comparable measure, and the old, who find themselves surprised by their own longevity and the austere conditions it creates.
In other cases, the locations visited show that these undercurrents, whether through economic policy, technological advancement, government intervention, or all of the above, are driving a wedge between those who can and have benefited from technological advancement and the lottery of globalization, and those who are being left behind. Unemployment, slim educational opportunities, corruption, and lack of access to market participation are the order of the day.
What Davies finds is that in places where formal markets have failed, and where economic policy has been more of a hindrance than an asset, it is the innate resilience and ingenuity of people, embodied by the prevalence of informal markets and trade, that comes to the rescue. These places, he argues, offer lessons for how we might deal with similar calamities in the future. In other words, human capital should be given more consideration than purely economic or industrial levers.
The philosopher and economist John Stuart Mill wrote in 1848 that it was common for communities to rebound after a war or disaster had ‘laid waste’ to their economy, and noted that most people would regard this as surprising. The source of the unexpected resilience, Mill thought, was the fact that walls, bridges and warehouses – physical capital – matter less than the ideas, skills and effort of the people who make up a country or community, since it is the people who will be called on to rebuild what has been lost.
My main issue with the book is not the premise, but the execution. The book could just as easily have been called Extreme Societies, Extreme Travel with an Economist, Extreme Resilience, or maybe even Extreme 2030: What Japan, Panama, Estonia, Chile, and the Congo... You get it. The “economies” bit is a little tenuous and, honestly, almost interchangeable with other conditions. In each location, Davies describes with aplomb the issues afflicting these places, but the economic forces that underpin them are treated with much less enthusiasm. So we get the picture, but not always the artist’s message.
If I had to be blunt, his voice sometimes seems to lack the guts to say what he really thinks. He often beats around the bush, seemingly hoping not to offend anyone. So we get timid opinions disguised as impartial observation. Anectdotal and ineffective.
Then we get to his overarching message, which is that we need more “resilience,” and that human capital ought to be developed in lockstep with technological advancement if we want to avoid the perils described herein.
To navigate all this, we need a fresh economics. People like to trade and are good at it, but the markets we create can destroy value – the only way forward is a new middle way. Failure is possible, even where potential is highest, so we need greater focus on resilience. An economics of resilience recognizes that for many people and many countries, income starts with informal trade.
It accepts that a society’s wealth is built on human and social capital, with financial and physical capital sitting on top. Today these subtler and more human aspects of income and wealth play little part in economic measurement or planning. My travels suggest that if they did, we might see things we are missing: the powerful fightback against old age, the real locus of the pain from technological advances, and the hidden faultiness – the erosion of resilience – that inequality is creating in the world’s most promising economies.
All that is fine, but if my previous readings on economics have taught me anything, it is that informal markets and economic resilience are often markers of broken economic policy and failed markets, not features of healthy ones.
Overall, it is still a worthwhile read. The premise is strong, the reporting is interesting, and there are plenty of thought-provoking moments. But it is not groundbreaking by any stretch, and for a book called Extreme Economies, I wanted more economy and a little less travelogue.
June 4, 2020
Most lessons learnt in economics seem rather ethereal when it comes to applying them. Economic theory is one thing. But the human mind sometimes finds it hard to grapple the full range of consequences of any economic intervention. History is littered with well intentioned incentives and deterrents gone so completely awry, that it would be funny if the outcomes were not so horrifying. Besides, even if we were to honestly try to balance long term health with quick fix solutions for immediate problems, there is a limit to our foresight. A economic hero of 90s american financial system, whose actions are now seen as the early cause of the 2008 crisis? I am sure there must have been commentators who would have said back, you keep watching - this is going to lead us into a big hole. But then, that's true for every single issue in the world. How do you separate out voices of reason from alarmist doomsayers?
So economists do what they do best. Take decisions, and "see how things play out". Really, in the end, economics is nothing but a series of "what-if" experiments
Which is brings us to Extreme Economies. Here, Richard Davies basically goes to places to do just that - see how things have played out in some of the most extreme situations. The book is a worthy read simply for the range of economic "use-cases" it covers. Some extremes are more extreme than others - like the currency system in a prison. It's incredible how economics really is a fundamental part of genetic behaviour - and it doesn't get enough credit for us evolving into what we are. Yuval Noah Harari glamourized gossip in the role it played in our evolution. Our natural outlook to barter and maximize utility with a forward looking view is just as central. Prisoners invent value out of literally nothing. That is rather incredible.
As is the story of indonesian beach dwellers who revived themselves after the great tsunami. I honestly worry day and night about my financial security. It feels so petty after reading about what people overcome.
The UK example reads more like an erosion through time than anything else, but it's relevant nonetheless... especially in understanding how economies shapes communities. Plus the history of Glasgow is really fascinating. The other stories of lost potential feel like zooming in on lost archives of the colonial mess the European conquests left us with - It reads like places of toxic wastelands or perilous troll infested forests that brave fellowships trudge through to fulfill their quests.
The economics of tomorrow is what is really the most relevant portion of the book really. Davies makes a very pertinent point - that the whole tomorrow that economics tries to improve through policies and interest rates and all of that... where economists tend to play the safe hand of this is the best bet, but you never know what future brings... well, some of those places exist today.
Akita talks about the problem of a society with an ageing population. My God that portion was grim. It's a portion which deserves a whole book really. The efficiencies of Tallinn were intoxicating, and it's hard to understand why is that situation so futuristic? You talk about economies of scale and all... but Estonia with it's 1.5 mn population seems to be running things really well. There is some context of automation and technology cannibalizing some jobs, but I suppose the role of AI there is a bit beyond the scope of this book. Lastly, Santiago is supposed to be "tomorrow" in terms of inequality - but I think inequality is extreme and pervasive everywhere. It is the today of a capitalistic society. Economics love saying market economics increases the pie, but even then, where strong institutions aren't present, it quite simply increases inequality. And if the goal of the richest people is to keep poorest at the bare minimum levels where they will not revolt... they are doing a good job so far.
So, these explorations are mostly anecdotal. You can read them as separate essays. There is not convuluted economics itself that is discussed here. Perhaps readers who have delved deeper in economics will want a deeper perspective. For the somewhat initiated though, these explorations might be the beginning of a deep, deep rabbit hole.
So economists do what they do best. Take decisions, and "see how things play out". Really, in the end, economics is nothing but a series of "what-if" experiments
Which is brings us to Extreme Economies. Here, Richard Davies basically goes to places to do just that - see how things have played out in some of the most extreme situations. The book is a worthy read simply for the range of economic "use-cases" it covers. Some extremes are more extreme than others - like the currency system in a prison. It's incredible how economics really is a fundamental part of genetic behaviour - and it doesn't get enough credit for us evolving into what we are. Yuval Noah Harari glamourized gossip in the role it played in our evolution. Our natural outlook to barter and maximize utility with a forward looking view is just as central. Prisoners invent value out of literally nothing. That is rather incredible.
As is the story of indonesian beach dwellers who revived themselves after the great tsunami. I honestly worry day and night about my financial security. It feels so petty after reading about what people overcome.
The UK example reads more like an erosion through time than anything else, but it's relevant nonetheless... especially in understanding how economies shapes communities. Plus the history of Glasgow is really fascinating. The other stories of lost potential feel like zooming in on lost archives of the colonial mess the European conquests left us with - It reads like places of toxic wastelands or perilous troll infested forests that brave fellowships trudge through to fulfill their quests.
The economics of tomorrow is what is really the most relevant portion of the book really. Davies makes a very pertinent point - that the whole tomorrow that economics tries to improve through policies and interest rates and all of that... where economists tend to play the safe hand of this is the best bet, but you never know what future brings... well, some of those places exist today.
Akita talks about the problem of a society with an ageing population. My God that portion was grim. It's a portion which deserves a whole book really. The efficiencies of Tallinn were intoxicating, and it's hard to understand why is that situation so futuristic? You talk about economies of scale and all... but Estonia with it's 1.5 mn population seems to be running things really well. There is some context of automation and technology cannibalizing some jobs, but I suppose the role of AI there is a bit beyond the scope of this book. Lastly, Santiago is supposed to be "tomorrow" in terms of inequality - but I think inequality is extreme and pervasive everywhere. It is the today of a capitalistic society. Economics love saying market economics increases the pie, but even then, where strong institutions aren't present, it quite simply increases inequality. And if the goal of the richest people is to keep poorest at the bare minimum levels where they will not revolt... they are doing a good job so far.
So, these explorations are mostly anecdotal. You can read them as separate essays. There is not convuluted economics itself that is discussed here. Perhaps readers who have delved deeper in economics will want a deeper perspective. For the somewhat initiated though, these explorations might be the beginning of a deep, deep rabbit hole.
October 18, 2020
Disclaimer: These are my personal notes. There are spoilers. I do not claim 100% accuracy. The review is average at best. Order: Review first. Notes after.
Review & Summary:
The concept is novel. Davies visits 9 economies witnessing different economic conditions. Akin to 9 patients with unique health concerns.
For some readers, the stories might not be new. The reporting is, at times, surface only and maintains distance from the psychological & societal dimensions of life in these 9 economic conditions (except for the chapter on Japan). I wouldn't recommend this book as a travelogue.
If you are new to economics, this is a good book to read to understand economic jargon. But Davies places too much trust in economic theory - they are framed almost like fundamental physics theories as if these economic ideas predicted & fully explain the modern world.
Notes:
A) Economies devastated yet thriving:
Tsunami Aceh: reliance & faith in traditional saving (gold) jumpstarted the economy (gold buyers/lenders) when all formal banks washed away. The human ability to continue living. Lesson: formal economies cannot always be relied on.
Jordan Syrian refugee camp: enterprising young smugglers. Taking advantage of supposed cashless system to exchange supermarket items for rials. Independent one-family businesses informally employing 60%. Commerce & trade thrives. Camp 2: opposite. Rigid rules & enforcement suffocating business. No communal market stifling human relationships. Purpose-built shop stalls almost empty. Lesson: allow economies free rein.
Louisianna prison: prison economy.
B) Dying yet should be thriving:
Glasgow: shipbuilding community living in shared housing tenements built long ago. Unable to re-structure competitively to compete against diesel powered ships. Post WW2, Japan overtakes yearly ships built -brand new ship building yards. Govt subsidies & bailouts keep afloat until early 1980s when finally shut down. Societal depression: unemployment, drugs, suicide. Shared housing system knocked down for housing blocks strips away social bonds keeping people together.
Darien Gap: central Panama. Rich in biodiversity & natural timber. Lack of employment forces locals to chop down natural wealth. Poorly priced timber doesn't capture externalities. *Darien adventures Scotland: follow English in trade colonies, believed in big profits, 50% Scotland capital financed a fleet of boats. Failure -most died tropical diseases, remaining sailed to jamaica or sold themselves as slaves. Scotland bankrupt, turned to England which = UK.
Kinshaha: local traders pay multiple taxes daily stripping away profits. Inability, or unwillingness, govt officials to direct natural resources for national growth. The people rely only on themselves.
C) Economies already dealing with tomorrow's issues:
Santiago Chile: Education. UChicago educated idealists (Chicago Boys) implements free market reforms during Pinochet era. Education system now one of the most unequal. **Metro stops & education achievement perfect correlation (further away centre the less educated). Public schools are free with token charges ( textbooks etc) that can be expensive. Proliferation of unregulated tertiary education schools -promise life altering benefits but certificates useless. ***Liberalised unregulated markets has failed the people in delivering quality education at affordable prices.
Japan: Ageing population. In Akita, almost all residents are over 65. Many living past 100yrs. Loneliness & poverty =suicide. Elderly utterly unprepared for the costs of a long life, many living in poverty - they are the first generation to face this problem. Over 50% Japan budget for elderly/pensioners. Despite strong cultural reverence for elderly, more younger people now critical & name calling increasing. Elderly remain active (cheerleaders, dancers, theatre group).
Tallin, Estonia: Digital capital. All govt paperwork now paperless. *Creativity: inventions & own businesses (tv show inventions). Helping to answer global issues with science & technology. Independent business & creativity highly valued.
Review & Summary:
The concept is novel. Davies visits 9 economies witnessing different economic conditions. Akin to 9 patients with unique health concerns.
For some readers, the stories might not be new. The reporting is, at times, surface only and maintains distance from the psychological & societal dimensions of life in these 9 economic conditions (except for the chapter on Japan). I wouldn't recommend this book as a travelogue.
If you are new to economics, this is a good book to read to understand economic jargon. But Davies places too much trust in economic theory - they are framed almost like fundamental physics theories as if these economic ideas predicted & fully explain the modern world.
Notes:
A) Economies devastated yet thriving:
Tsunami Aceh: reliance & faith in traditional saving (gold) jumpstarted the economy (gold buyers/lenders) when all formal banks washed away. The human ability to continue living. Lesson: formal economies cannot always be relied on.
Jordan Syrian refugee camp: enterprising young smugglers. Taking advantage of supposed cashless system to exchange supermarket items for rials. Independent one-family businesses informally employing 60%. Commerce & trade thrives. Camp 2: opposite. Rigid rules & enforcement suffocating business. No communal market stifling human relationships. Purpose-built shop stalls almost empty. Lesson: allow economies free rein.
Louisianna prison: prison economy.
B) Dying yet should be thriving:
Glasgow: shipbuilding community living in shared housing tenements built long ago. Unable to re-structure competitively to compete against diesel powered ships. Post WW2, Japan overtakes yearly ships built -brand new ship building yards. Govt subsidies & bailouts keep afloat until early 1980s when finally shut down. Societal depression: unemployment, drugs, suicide. Shared housing system knocked down for housing blocks strips away social bonds keeping people together.
Darien Gap: central Panama. Rich in biodiversity & natural timber. Lack of employment forces locals to chop down natural wealth. Poorly priced timber doesn't capture externalities. *Darien adventures Scotland: follow English in trade colonies, believed in big profits, 50% Scotland capital financed a fleet of boats. Failure -most died tropical diseases, remaining sailed to jamaica or sold themselves as slaves. Scotland bankrupt, turned to England which = UK.
Kinshaha: local traders pay multiple taxes daily stripping away profits. Inability, or unwillingness, govt officials to direct natural resources for national growth. The people rely only on themselves.
C) Economies already dealing with tomorrow's issues:
Santiago Chile: Education. UChicago educated idealists (Chicago Boys) implements free market reforms during Pinochet era. Education system now one of the most unequal. **Metro stops & education achievement perfect correlation (further away centre the less educated). Public schools are free with token charges ( textbooks etc) that can be expensive. Proliferation of unregulated tertiary education schools -promise life altering benefits but certificates useless. ***Liberalised unregulated markets has failed the people in delivering quality education at affordable prices.
Japan: Ageing population. In Akita, almost all residents are over 65. Many living past 100yrs. Loneliness & poverty =suicide. Elderly utterly unprepared for the costs of a long life, many living in poverty - they are the first generation to face this problem. Over 50% Japan budget for elderly/pensioners. Despite strong cultural reverence for elderly, more younger people now critical & name calling increasing. Elderly remain active (cheerleaders, dancers, theatre group).
Tallin, Estonia: Digital capital. All govt paperwork now paperless. *Creativity: inventions & own businesses (tv show inventions). Helping to answer global issues with science & technology. Independent business & creativity highly valued.
May 31, 2023
The author is an economics journalist and former Economics adviser to the UK Government. This book attempts to use 9 case studies of different “extreme” economies to both find common important threads between them, as well as predict what future economies will look like. These case studies are split over the categories of Survival, Failure and Future.
Reading about economics is a bit like the eating my vegetables. It can feel like a chore but I know that it ultimately does me good. What I really value when it comes to writing about this subject matter is writing that is accessible, entertaining and thought provoking. I am happy to say that this book fulfils all three. By writing in this way and in this format the author gives the outsider a real reason to consider why many like the author find economics fascinating. Because ultimately it is. Looking at economic behaviour fundamentally is about looking at human behaviour warts and all.
The central premise of this book is uniquely inspired by the 17th Century physician William Harvey, who sought to make discoveries about the human body by analysing extreme cases. Hence the inspiration to look at “extreme” economies, those that are unique but are not necessarily frequently analysed.
The author’s travels led him to meet some genuinely fascinating characters with unique and sometimes relatable hopes and struggles. Sometimes those struggles are so intense, you marvel at people’s resilience. Resilience is a key theme which the author plays on. One of his central takeaways from his investigations is that it is often overlooked. As is the role of social capital in markets. In the latter case the chapter about the rise and fall of Glasgow was especially interesting and touching, hearing about how modest tenements used to be hubs of support for many families who were never too far away from destitution.
All of the case studies felt worth a read and introduced the reader to unique successes, failures and trends that could turn into either. The case studies on Akita in Japan and Tallin in Estonia were cases in point. Akita, a city where the average age is 65, talked about the unique problems an ageing population brings but also described some surprising entrepreneurial successes around it. Tallin and Estonia at large is a hub of innovation which has bet heavily on innovation. Yet this glitzy success hides social divides over lingering fears about technology potentially displacing labourers, and that between Estonian and Russian speakers, many of whom effectively live apart. Again, we see the underreported social element.
As a mainly non-fiction reader I love books that make me think and challenge my horizons. This book made me think seriously about how we should look at economies. In particular it made me realise that if they are not shaped and directed by regulations correctly, even well-intentioned ones, they can lead to frustrating and even tragic long-term consequences. Many of these consequences came about due to a lack of concern for policymakers who came before to try and look into the long--term effects of their policies. However, now we have historical hindsight to aid us.
As the author makes clear, we have reasons to be cautiously hopeful for the future. But this hope should be tempered by realism. Instead of dismissing people’s fears about technology we should be considering more carefully about how much better it can help those people. Instead of fearing the coming of an ageing population we can learn a lot from countries which are already a step ahead of us. We should also think carefully about where market competition is and is not appropriate to determine some of what we rely on solely, such as in many cases education and healthcare.
It will be hard to find another book about economics which puts the human element into it so well.
Reading about economics is a bit like the eating my vegetables. It can feel like a chore but I know that it ultimately does me good. What I really value when it comes to writing about this subject matter is writing that is accessible, entertaining and thought provoking. I am happy to say that this book fulfils all three. By writing in this way and in this format the author gives the outsider a real reason to consider why many like the author find economics fascinating. Because ultimately it is. Looking at economic behaviour fundamentally is about looking at human behaviour warts and all.
The central premise of this book is uniquely inspired by the 17th Century physician William Harvey, who sought to make discoveries about the human body by analysing extreme cases. Hence the inspiration to look at “extreme” economies, those that are unique but are not necessarily frequently analysed.
The author’s travels led him to meet some genuinely fascinating characters with unique and sometimes relatable hopes and struggles. Sometimes those struggles are so intense, you marvel at people’s resilience. Resilience is a key theme which the author plays on. One of his central takeaways from his investigations is that it is often overlooked. As is the role of social capital in markets. In the latter case the chapter about the rise and fall of Glasgow was especially interesting and touching, hearing about how modest tenements used to be hubs of support for many families who were never too far away from destitution.
All of the case studies felt worth a read and introduced the reader to unique successes, failures and trends that could turn into either. The case studies on Akita in Japan and Tallin in Estonia were cases in point. Akita, a city where the average age is 65, talked about the unique problems an ageing population brings but also described some surprising entrepreneurial successes around it. Tallin and Estonia at large is a hub of innovation which has bet heavily on innovation. Yet this glitzy success hides social divides over lingering fears about technology potentially displacing labourers, and that between Estonian and Russian speakers, many of whom effectively live apart. Again, we see the underreported social element.
As a mainly non-fiction reader I love books that make me think and challenge my horizons. This book made me think seriously about how we should look at economies. In particular it made me realise that if they are not shaped and directed by regulations correctly, even well-intentioned ones, they can lead to frustrating and even tragic long-term consequences. Many of these consequences came about due to a lack of concern for policymakers who came before to try and look into the long--term effects of their policies. However, now we have historical hindsight to aid us.
As the author makes clear, we have reasons to be cautiously hopeful for the future. But this hope should be tempered by realism. Instead of dismissing people’s fears about technology we should be considering more carefully about how much better it can help those people. Instead of fearing the coming of an ageing population we can learn a lot from countries which are already a step ahead of us. We should also think carefully about where market competition is and is not appropriate to determine some of what we rely on solely, such as in many cases education and healthcare.
It will be hard to find another book about economics which puts the human element into it so well.
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