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Notes An Upbeat Foreword 1. John Maynard Keynes, Economic Possibilities for our Grandchildren, in: John Maynard Keynes, Essays in Persuasion (New York: W.W. Norton and Co, 1963), p. 358–373. 2. Grzegorz W. Kolodko, Truth, Errors, and Lies: Politics and Economics in a Volatile World (New York: Columbia University Press, 2011) (paperback 2012). Russian, Chinese, Arabic and other language editions see http://www. tiger.edu.pl/english/kolodko/ ksiazki.htm. 1 A Truthful Economics, or What Modern Economics is – and What it Should Be 1. John Lehrer, “The Truth Wears Off”, The New Yorker, December 13, 2010. 2. Nouriel Roubini and Stephen Mihm, Crisis Economics. A Crash Course in the Future of Finance (New York: The Penguin Press, 2010). 3. Edmund S. Phelps, Mass Flourishing: How Grassroots Innovation Created Jobs, Challenge, and Change (New York: Princeton University Press, 2013). 4. Richard A. Posner, A Failure of Capitalism: The Crisis of ’08 and the Descent into Depression (Cambridge, MA and London, England: Harvard University Press, 2009). 5. Vito Tanzi, Dollars, Euros, and Debts. How We Got into the Fiscal Crisis and How We Get Out of It (New York: Palgrave Macmillan, 2013). 6. Daniel Kahneman, Thinking, Fast and Slow (New York: Farrar, Strauss and Giroux, 2011). 7. David Freedman, Wrong: Why Experts Keep Failing Us – And How to Know When Not to Trust Them (New York, Boston and London: Little, Brown and Company, 2010), and Kathryn Schultz, Being Wrong: Adventures in the Margin of Error (New York: Ecco, 2010). 8. Obama, “Shootings Should Prompt ‘Soul-searching’”, USA Today, August 6, 2012. 9. A certain Mr. Pratt of Gun Owners of America said: “Where the guns are allowed freely to be carried... we have very low murder rates”. BBC News, “Piers Morgan: Thousands Petition for Deportation” (http://www.bbc.co.uk/ news/entertainment-arts-20838729). 10. Paul Slovic, Baruch Fischhoff and Sarah Lichtenstein, “Facts and Fears: Societal Perception of Risk”, Advances in Consumer Research, vol. 08, 1981. 11. See Anna-Marie Lever, “Walnuts ‘Improve Sperm Health’ ”, BBC online, August 16, 2012. 12. Read more in: Tomáš Sedláček, Economics of Good and Evil: The Quest for Economic Meaning from Gilgamesh to Wall Street (Oxford and New York: Oxford University Press, 2011). The author, starting his deliberations from the Sumerian story, 211 212 Notes limits himself to the Judeo-Greek-Christian culture, overlooking the presence of the issue of good and evil in other philosophies and religions, especially in Taoism, Confucianism, Hinduism, Buddhism and Islam, which are the cultures of over half of mankind. The Christian culture is just a third of it. 13. Olivier Blanchard, “Global Economy: Some Bad News and Some Hope”, iMFdirect. The International Monetary Fund’s global economy forum, Washington, DC, October 8, 2012. 14. Richard Wilkinson and Kate Picket, The Spirit Level: Why Greater Equality Makes Societies Stronger (New York: Bloomsbury Press, 2009). 15. See data provided by Vito Tanzi and Ludger Schuknecht, “The Growth of Government and the Reform of the State in Industrial Countries”, IMF Working Papers, 95/130, Washington DC, 1995. See also Grzegorz W. Kolodko, From Shock to Therapy. Political Economy of Postsocialist Transformation (Oxford and New York: Oxford University Press, 2000). 16. Vito Tanzi, Government versus Markets. The Changing Economic Role of the State, (New York: Cambridge University Press, 2011). This is the work from which I borrowed the data I quote, the source of which is the IMF and the EU for public spending and Luxemburg Income Study for the Gini index. 17. Two American authors write about their own experience of evidently neolib- eral practices and how they feel about being involved in them: John Perkins, Confessions of an Economic Hit Man (San Francisco: Berrett-Koehler Publishers, 2004) and John C. Bogle, Enough: True Measures of Money, Business, and Life (Hoboken, NJ: John Wiley and Sons, 2009). 18. John Maynard Keynes, The General Theory of Employment, Interest and Money (London: Macmillan, 1960). 2 A Blueprint for the Future 1. Star Wars, directed by George Lucas, Lucasfilm & 20th Century Fox, San Francisco-Los Angeles 1977. 2. Matthew Glass, Ultimatum (New York: Atlantic Monthly Press, 2009). 3. Oscar Wilde, Lord Arthur Savile’s Crime and Other Stories (New York: Penguin Books, 1994). 4. Adair Turner, “Securitisation, Shadow Banking, and the Value of Financial Innovation”, “The Rostov Lecture on International Affairs”, School of Advanced International Studies (SAIS), John Hopkins University, Washington, DC, April 19 2012. 5. John Cassidy, “What Good Is Wall Street?”, The New Yorker, November 29, 2010. See also by this author: How Markets Fail: The Logic of Economic Calamities (New York: Farrar, Straus and Giroux, 2009). 3 On Employing Economics to Shape Reality 1. Vernon L. Smith, Bargaining and Market Behavior: Essays in Experimental Economics (Cambridge, UK: Cambridge University Press, 2000). 2. See Daniel Kahneman, Thinking…, op. cit., p. 269. 3. Richard H. Thaler and Cass R. Sustain, Nudge: Improving Decisions About Health, Wealth and Happiness (New Haven and London: Yale University Press, 2008). Notes 213 4. William Easterly, The Elusive Quest for Growth: Economists’ Adventures and Misadventures in the Tropics (Cambridge, MA: MIT Press, 2002). See also a book by the same author The White Man’s Burden: Why the West’s Efforts to Aid the Rest Have Done So Much Ill and So Little Good (Oxford and New York: Oxford University Press, 2006). 5. Yang Jisheng, Tombstone: The Great Chinese Famine 1958–1962 (New York: Farrar, Straus and Giroux, 2012). 6. Quoted after “JP Morgan ‘may pay record $13bn fine’”, BBC online, October 20, 2013 (http://www.bbc.co.uk/news/business-24599345). 7. Richard E. Nisbett, The Geography of Thought. How Asians and Westerners Think Differently… and Why (New York: Free Press 2003). 4 Globalization – an Accident of History? 1. Francis Fukuyama, The End of History and the Last Man (New York: Free Press, 1992). 2. Christopher M. Andrew and Vasili Mitrokhin, The World Was Going Our Way. The KGB and the Battle for the Third World (New York: Basic Books, 2005). 3. Pankaj Ghemawat, World 3.0: Global Prosperity and How to Achieve It (Cambridge, Mass.: Harvard Business Review Press, 2011). 4. The process of financial crisis circumstances growing in the USA is beauti- fully presented in Inside Job, directed by Charles Ferguson, Sony Pictures Classics 2010. This motion picture won the Oscar for the best documentary film in 2011. 5. Joseph E. Stiglitz, Freefall: America, Free Markets, and the Sinking of the World Economy (New York: Farrar, Straus and Giroux, 2010). 6. Gerald A. Epstein, ed., Financialization and the World Economy (Cheltenham, UK: Edward Elgar Publishing, 2007). 7. Hereinafter, unless I specify that I mean the Republic of the Congo with a capital in Brazzaville, the Democratic Republic of the Congo shall be referred to in short as the Congo. 8. Eui-Gak Hwang, The Korean Economies: a Comparison of North and South (Oxford: Clarendon Press, 1993). 9. “Parallel Economies What the North and South Koreans Can Learn from the Reunification of Germany”, The Economist, December 29, 2010. 10. Vladimir Ilyich Lenin, Imperialism, the Highest Stage of Capitalism (New York: Penguin Books, 2010). 11. “Bombing Iran”, The Economist, February 25, 2012. 12. Dani Rodrik, The Globalization Paradox: Democracy and the Future of the World Economy (New York and London: W. W. Norton, 2011). 13. Opinion of an expert from research and advisory company Gartner cited in “The World is What You Make of It”, special report “Technology and Geography”, The Economist, October 27, 2012. 14. Extensive information about the Millennium Development Goals, about the progress achieved and factors underlying lack thereof, as well as about preparations for further measures in that respect is provided on the special UN online portal, available at www.un.org/millenniumgoals. See also The Millennium Development Goals Report 2011 (New York: United Nations, 2011). 15. See Dani Rodrik, The Globalization Paradox…, op. cit., p. 200 and next. 214 Notes 16. I exclude from this ranking the mini-states, such as Liechtenstein, Andorra and San Marino as well as territories without formal independent country status, officially recognized under international law, such as Hong Kong, Macao and Taiwan, and some enclaves, mainly insular ones, from the Cayman Islands in the Caribbean to Jersey in the English Channel. 17. Detailed data are available for 187 countries. See the UN report: Human Development Report 2011. Sustainability and Equity – A Better Future for All (New York: United Nations Development Programme (UNDP), 2011). 18. Grzegorz W. Kolodko, Globalization and Catching-up In Transition Economies (Rochester, NY, and Woodbridge, Suffolk, UK: University of Rochester Press, 2002). 5 Market Versus Government in an Age of Globalization 1. Adam Smith, The Wealth of Nations (Amherst, NY: Prometheus Books, 1991). 2. Adam Smith, The Theory of Moral Sentiments (Calgary: Theophania Publishers, 2012). 3. Nicholas Phillipson, Adam Smith: An Enlightened Life (New Haven & New York: Yale University Press, 2010). 4. Emma Rothschild, Economic Sentiments: Adam Smith, Condorcet and the Enlightenment (Cambridge, Mass.: Harvard University Press, 2001). 5. Michał Kalecki’s contribution to macroeconomics is described at length by Mario D. Nuti in “Kalecki and Keynes revisited: Two original approaches to demand-determined income – and much more besides”, in: Zdzisław