Created: 1999-09-12
Last Modified: 1999-09-12
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Davos without a Translator

J. Bradford DeLong

September 10, 1999

A Review of Lewis Lapham (1999), The Agony of Mammon (New York: Verso).

Every year in Davos, Switzerland a number of the world's great and good--or at least powerful and egocentric--meet for a few days at the World Economic Forum to discuss the economic destiny of humanity. Business executives, central bankers, politicians, intellectuals, futurologists, journalists--all descend to hear each other make speeches and to talk to each other in the halls.

To this assembly went Lewis Lapham, the somewhat iconoclastic high-ranking member in good standing of the American literary establishment. The Agony of Mammon is his report of what he heard there.

My initial set of reactions on picking up this book were three:

First, the book is so short--only 80 pages, big print, each page only 6" x 4". It has a total of 19,000 words. Printed with normal margins in 12-point Times, its manuscript must have taken up only 48 pages. For Verso to charge $15.00--6.25 times the cost of xeroxing the manuscript for each copy--strikes me as extremely self indulgent. Books are supposed to be a more efficient way of reproducing text than a xerox machine. If Verso doesn't make money on this book, shame on them for gearing up the machinery of modern printing for something with such a trivial print run. If they do make money on this book, shame on them for overcharging those who bought the book.

Second, the book seems to miss the thing that is most interesting about the annual Davos meeting of the World Economic Forum: that it happens at all, and that it is thought newsworthy by those who are not there. In previous eras the meetings that were of genuine interest were those between princes to decide between war and peace, or between churchmen to decide which of their number were heretics to be burned at the stake and which districts would suffer the fire and sword of the crusade. But in this era people meet to talk about monetary policy, productivity, business organization. To me at least that is a very hopeful sign--commerce and productivity being much more pleasant things to experience than war or excommunication. Yet Lewis Lapham doesn't seem to be aware that in the long historical perspective economics is an unusual subject for a worldwide newsworthy meeting.

Third, when Lewis Lapham arrives in Davos it soon becomes clear that he does not understand what he is hearing. When MIT economist Rudiger Dornbusch calls for the rich investors of New York and Frankfurt to be forced to eat a large share of the collective losses from the East Asian financial crisis, Lewis Lapham hears Rudi as a voice calling for "austerity"--a voice saying the same thing as the central bankers who say that European unemployment benefits are too high or the corporate princes who urge that the last shreds of the social-democratic welfare state need to be purged from South America. But Rudi was saying something completely different from the central bankers and the corporate princes: Rudi's point was that the East Asian financial crisis had already destroyed great wealth, and the question was whether the richest 1% were going to pay or the non-richest 99%. Rudi's speech was a message of anti-austerity. But that was not what Lewis Lapham heard.

Why not? Because Lewis Lapham doesn't speak the language. He doesn't understand the denotation of the words that he heard at Davos--that when X was said, it meant that Y was excluded, and that everyone else there understood the functioning of the economy well enough to know that if you wanted Q you also had to take R, and that S and T were compatible only in the absence of U. And Lewis Lapham did not take along a translator: there was no economist tagging along behind him to point out that he had failed to understand Rudi Dornbusch, or the Chinese entrepreneur for whom the coming of the pager to China is a big deal, or George Soros, or Alan Greenspan, or indeed the organizer Klaus Schwab, or in all probability most of the other people he talked to. As a reporter of what was actually said and meant at Davos, Lewis Lapham is the ultimate unreliable narrator.

But if he did not understand denotations, what then did he hear? And this is where the book becomes truly interesting. For not understanding the denotations he is forced to listen to the connotations: the emotional penumbra cast by the thoughts and ideas had and expressed at Davos. And in his listening to the connotative penumbra he hears four interesting--and I think very true--things.

  • That in their claims to control--or even to understand--the course of the global economy, high politicians are faking it: Bill Clinton's "fine pose of high presidential seriousness was exactly that--a pose, an extended television commercial, a department store window display." That is not to say that there are not half-successful attempts to manage the global economy: there are, and they are half-successful. But politicians who promise all good things to all people and deny that there are choices (more insurance against global warming or more minivans? faster economic growth or smaller recessions?) are not the ones who make them.
  • The uneasy combination of confidence in the utility and rightness of market forces--the market as the creator of wealth and efficiency, and also as the rewarder of industry and expertise--with the awareness that "...the market, like God, didn't always answer everybody's prayers... and that the world was a more uncertain place than one might guess sitting here on the terrace of the Berghotel Schatzalp..."
  • "The sincerity of... [the] devotions or the wealth of... [the] good intentions" of those who had come to Davos to discuss the state of the world--but coupled with their inability to understand how the world was going to move, for the attendees at Davos were the world's best managers, not politicians, not visionaries. And it was politicians and visionaries that are needed to lead, not managers.
  • The extraordinary role of Alan Greenspan--who truly has been "outfitted" (albeit not hastily) by the globe's businessmen and speculators with proconsular power to calm the world economy...

So definitely a recommended book.

But don't read it if you don't understand monetary policy, or the world economy--you will wind up confused because you will try to read it for the denotations, and you can't because Lewis Lapham doesn't understand them.

And don't buy it: it is socially inefficient--wasteful of time and energy and resources--to put the covers of a book around a manuscript so small. If the market is going to work as a social planning and resource allocation mechanism, organizations like Verso need to be punished for their destructive deviancy. Instead of buying it, read it in the bookstore. It will only take you at most thirty minutes, after all.

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Professor of Economics J. Bradford DeLong, 601 Evans Hall, #3880
University of California at Berkeley
Berkeley, CA 94720-3880
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