MoneyWeek book reviews: 12 January 2024

The latest book reviews from the front lines of business and politics.

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Our expert MoneyWeek team takes a look at the books that you need to know about from finance and business to politics and culture.

Book of the Month: How Migration Really Works

How Migration Really Works - A Factful Guide to the Most Divisive Issue in Politics
Hein de Haas 

There is at the present time no more controversial issue than immigration. From the debate over the Rwanda scheme in the UK to the rise of the European far right, and Donald Trump ranting about immigration “poisoning the blood” of America, it’s fair to say that this is a topic that is top of the agenda, or at least appears to be. It is also one in which sensible debate and analysis have been drowned out by increasingly shrill rhetoric, both from those demanding more controls and from supporters of a more liberal policy, who claim that “no person is illegal”.

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How Migration Really Works by Hein de Haas aims to restore some fact-based rigour to the argument. Haas takes 20 statements, representing the current “conventional wisdom”, which he takes in turn and tries to show are either false or at least heavily exaggerated. Many of those statements are of the kind that you would hear from those supporting tougher restrictions – that most immigration is of the illegal kind, and that migrants push down the wages of domestic workers, for example. Others are from the pro-immigration side of the debate, such as the idea that immigration always helps fix the problems of ageing societies (rather than just deferring them).

Haas’s arguments are not beyond criticism. He makes a convincing case that much of the association between immigration and crime is a myth, for example, but that doesn’t mean badly designed policies can’t cause social problems under certain circumstances, as Sweden is finding out. And while surveys may find people are more open to immigration than they used to be, this may partly be due to them telling pollsters what they want to hear.

Stating that levels of immigration as a percentage of the population in developed countries are no higher than they were 100 years ago is a bit misleading as the 1920s saw a backlash against immigration in America and elsewhere, leading to a wave of restrictions. Yet his arguments are for the most part convincing and backed up by studies and hard data, rather than just anecdotes and stories. This is important as much of the current debate is increasingly dominated by the latter. He provides a service for policymakers determined to press ahead with the latest wheeze by reminding them that bad policies can have unintended consequences. He also deserves credit for injecting a degree of optimism into what can be a rather depressing subject. The background of Rishi Sunak, whose parents came from Uganda, was never an issue in his rise to high office – that would have been unthinkable 50 years ago.

Book in the news: The Wealth of a Nation

The Wealth of a Nation - Institutional Foundations of English Capitalism
Geoffrey M. Hodgson

One of the biggest debates among economic historians is the reason for the sudden take-off in British economic growth after 1760 during the industrial revolution. Some say it was down to good luck, combined with large amounts of cheap, easily available energy in the form of coal. Others argue it was the result of good policies, especially secure property rights. Geoffrey Hodgson, however, contends that it was all down to the development of “financial capitalism”. He claims that capitalist growth requires more than just free markets and property rights, which had existed for thousands of years – you also need a financial system that enables people to borrow, and buy and sell debt.

Creating such a system in England took a long time, not least because the feudal land-ownership structure was designed to ensure that property passed down from generation to generation. As a result, it was very hard for landowners and wealthier peasants to sell their property or use it as collateral for loans. The political and legal turmoil of the 17th century created an opening for the concept of mortgages, and the Dutch invaders of 1688-1689 brought with them Dutch banking and financial practices. Financial development was then supercharged by the need for the British government to borrow huge sums to finance the various wars of the 18th and early 19th centuries.

It’s an intriguing argument, but the book takes a long time to get going. The first section is devoted to historical theory, including a chapter on Karl Marx. It is not until the second section, roughly a third of the way through, that Hodgson starts looking at British economic history. His arguments about how the financial system developed during the 18th century, which is the period that Hodgson claims was most important, is shoehorned into just two out of the seven chapters. Students of economic history will find much of interest, but the book suffers from a lack of focus that might try the rest of us.

Corporate Crime and Punishment

Corporate Crime and Punishment - The Politics of Negotiated Justice in Global Markets
Cornelia Woll 

Critics of globalisation in the 1990s and early 2000s complained that companies were exploiting global free-trade rules to manipulate their legal residence and minimise their regulatory and tax liability. Many financial institutions chose to locate in the British Virgin Islands, while operating in the US and UK, for example. This mobility has, however, ended up cutting both ways – US authorities have pursued prosecutions to enforce US law, even in cases where the alleged violations occurred outside the US, where the companies were located. 

This trend, most notable in cases such as those involving Fifa and Alstom, has coincided with a tendency of US prosecutors to use deferred prosecution arrangements, which allow companies to avoid a trial or even admit guilt, in return for paying large fines and modifying their behaviour.

Supporters say this means that companies are being held to account for their misdeeds in a way that they have never been previously. Critics argue that it imposes US standards on the rest of the world and is, in effect, a form of economic warfare. 

This book by Cornelia Woll provides a short but comprehensive overview of the issues. Although primarily aimed at legal scholars, the book will appeal to those interested in the future direction of global business and international relations.

This article was first published in MoneyWeek's magazine. Enjoy exclusive early access to news, opinion and analysis from our team of financial experts with a MoneyWeek subscription.

Dr Matthew Partridge

Matthew graduated from the University of Durham in 2004; he then gained an MSc, followed by a PhD at the London School of Economics.

He has previously written for a wide range of publications, including the Guardian and the Economist, and also helped to run a newsletter on terrorism. He has spent time at Lehman Brothers, Citigroup and the consultancy Lombard Street Research.

Matthew is the author of Superinvestors: Lessons from the greatest investors in history, published by Harriman House, which has been translated into several languages. His second book, Investing Explained: The Accessible Guide to Building an Investment Portfolio, is published by Kogan Page.

As senior writer, he writes the shares and politics & economics pages, as well as weekly Blowing It and Great Frauds in History columns He also writes a fortnightly reviews page and trading tips, as well as regular cover stories and multi-page investment focus features.

Follow Matthew on Twitter: @DrMatthewPartri