The geniuses who crafted capitalism

Aug 05, 2011

Our Weekly Read column features Fortune staffers' and contributors' takes on recently published books about the business world and beyond. We've invited the entire Fortune family -- from our writers and editors to our photo editors and designers -- to weigh in on books of their choosing based on their individual tastes or curiosities. Each Friday we feature a different review. This week, Rik Kirkland, a former Fortune managing editor who is now a McKinsey & Co. partner, weighs in on Sylvia Nasar's sweeping account of the men who created our financial system, Grand Pursuit: The Story of Economic Genius.



FORTUNE -- In A Beautiful Mind (1998) Sylvia Nasar told, with a novelist’s eye for narrative and detail, the tragic tale of a solitary genius, Nobel-prize winning mathematician John Nash. Her reward: critical acclaim and a bestseller that later became a hit movie, starring Russell Crowe and directed by Ron Howard.

With her second book Grand Pursuit: The Story of Economic Genius, Nasar shifts from micro to macro. However, this is not a traditional history of economic thought or a conventional string of bios of great men. Rather it is the story of the evolution of a radical, planet-reshaping idea -- “the idea that humanity could turn tables on economic necessity -- mastering rather than being enslaved by material circumstances.”



The canvas is epic: Victorian London, war-shattered Europe, imperial Washington. The details are fresh, at times startling: Karl Marx deploying his favorite conversation starter, “I am going to annihilate you”; Joseph Schumpeter, he of “creative destruction” fame, riding around Vienna as finance minister in a horse-drawn carriage “with a call girl or two on his arm”; conservative icon Milton Friedman as a young Treasury wonk-on-the-make inventing for FDR that ultimate postwar “revenue-raising machine” -- the withholding tax. (Who knew?) At the same time, gnarly but critical concepts, such as the “money illusion” (how inflation and deflation distort decision-making) or the way productivity serves as the primary driver of wages and living standards, shine through in all their richness and complexity. If only Econ 101 had been this interesting!

Despite some inevitable wandering as her saga rushes on, Nasar never loses sight of her central theme: the powerful role modern economics has played in helping to solve what John Maynard Keynes called “the political problem of mankind” -- how to combine “economic efficiency, social justice and individual liberty.” If Hollywood comes knocking this time round, it will take a David Lean, orchestrating a cast of thousands, to capture the epic -- and ultimately deeply uplifting -- sweep of the action.

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