You mean accounting has a history?  Yes, it does, and it should matter to you, because the accounting profession, and the audit function that it serves, affects all the companies in your 401(k) program.  Remember WorldCom, remember Enron? Every time a large holding of yours writes off the goodwill from a failed acquisition--there are too many examples to recite here--you've just had an accounting moment. In The Big Four: The Curious Past and Perilous Future of the Global Accounting Monopoly (Berrett-Koehler Publishers, 2018), Ian D. Gow and Stuart Kells describe the history of the auditing profession and how it has come to be concentrated in four global entities. They assess the current challenges the industry faces and where it could head to address those challenges. People in finance, business owners, and anyone with a 401(k) should find this book of interest.Daniel Peris is Senior Vice President at Federated Investors in Pittsburgh. Trained as a historian of modern Russia, he is the author most recently of Getting Back to Business: Why Modern Portfolio Theory Fails Investors. You can follow him on Twitter @Back2BizBook or at http://www.strategicdividendinvestor.com Learn more about your ad choices. Visit megaphone.fm/adchoicesSupport our show by becoming a premium member! https://newbooksnetwork.supportingcast.fm/finance

Is microfinance the magic bullet that will end global poverty or is it yet another a form of predatory lending to the poor? In her new book Financializing Poverty: Labor and Risk in Indian Microfinance (Stanford University Press, 2018), Sohini Kar brings ethnography to bear on this urgent question. Drawing on fieldwork with a for-profit microfinance institution (MFI) and its intended beneficiaries in the Indian city of Kolkata, the book brings into view the perils of “financial inclusion” for the poor. Kar argues that new streams of credit are increasingly used to capitalize on poverty rather than to challenge it. Richly peopled, the book evinces a deep commitment to understanding economic life as it is lived and experienced by everyday people rather than through abstract models. We meet founders of MFIs remaking themselves with narratives of social business, loan officers trying to balance the performance of care with pressures of debt-recovery, poor women taking out consumption loans and striving for middle-class identities, and debt-ridden borrowers struggling to manage the costs of living and the pressures of repayment. The experiences of this cast of characters are framed within the larger histories of debt and power in Kolkata, in West Bengal, and in India more broadly. Financializing Poverty combines theoretical sophistication with clear and engaging prose to shed light on the ways in which profit is made off of poverty. The book will be of interest to readers in the fields of anthropology, economics, and development studies, as well as readers interested in South Asia and global poverty.Aparna Gopalan is a Ph.D. student in Social Anthropology at Harvard. Learn more about your ad choices. Visit megaphone.fm/adchoicesSupport our show by becoming a premium member! https://newbooksnetwork.supportingcast.fm/finance

The vast chasm between classical economics and the humanities is widely known and accepted. They are profoundly different disciplines with little to say to one another. Such is the accepted wisdom. Fortunately, Professors Gary Saul Morson and Morton Schapiro, both of Northwestern University, disagree.  In their new book, Cents and Sensibility: What Economics Can Learn from the Humanities (Princeton University Press, 2017), they argue that the mathematically rigid world of classical economics actually has a lot to learn from the world of great literature. Specifically, they argue that “original passions” (the term is from an overlooked work of Adam Smith) in the form of culture, story telling, and addressing ethical questions are found in great works of literature, but lacking in modern economic theory. Good judgment, they write, “cannot be reduced to any theory or set of rules.” Along the way, they weave together Adam Smith, Lev Tolstoy, Jared Diamond, college admissions practices, the US News and World Report rankings, and the family.  This is an ambitious and original work. Many will disagree with it, but few will be able to put it down. Daniel Peris is Senior Vice President at Federated Investors in Pittsburgh. Trained as a historian of modern Russia, he is the author most recently of Getting Back to Business: Why Modern Portfolio Theory Fails Investors. You can follow him on Twitter @Back2BizBook or at http://www.strategicdividendinvestor.com Learn more about your ad choices. Visit megaphone.fm/adchoicesSupport our show by becoming a premium member! https://newbooksnetwork.supportingcast.fm/finance

Today we spoke with with Dirk H. Ehnts to talk about his new book Modern Monetary Theory and European Macroeconomics (Routledge, 2017). This is a very accessible text for those interested in discovering how monetary policy works and those interested in approaching the debate on the challenges of the Euro area. We talked about the notions of endogenous and exogenous money and how central banks and commercial banks contribute to the creation of monetary aggregates. We discussed the difficulties of the European common currency project and its future of reform or dissolution. The book introduces the reader to the many relationships between money and other economic variables. In our conversation we also discussed how contemporary politics might affect the reform of the Euro area institutions. This is a very interesting and timely book. It was published in 2016 and there might be soon need for a newer edition in both cases of success or failure of the Euro. Carlo D’Ippoliti is associate professor of economics at Sapienza University of Rome, and is editor of the open access economics journals PSLQuarterly Review and ‘Moneta e Credito’. His recent publications include the ‘Routledge Handbook of Heterodox Economics’ (Routledge, 2017) and ‘Classical Political Economy Today’ (Anthem, 2018), both as co-editor. Andrea Bernardi is Senior Lecturer in Employment and Organization Studies at Oxford Brookes University in the UK. He holds a doctorate in Organization Theory from the University of Milan, Bicocca. He has held teaching and research positions in Italy, China and the UK. Among his research interests are the use of history in management studies, the co-operative sector, and Chinese co-operatives. His latest His latest project is looking at health care in rural China. He is the co-convener of the EAEPE’s permanent track on Critical Management Studies. Learn more about your ad choices. Visit megaphone.fm/adchoicesSupport our show by becoming a premium member! https://newbooksnetwork.supportingcast.fm/finance

In his engaging and original book The Wisdom of Finance: Discovering Humanity in the World of Risk and Return (Houghton Mifflin Harcourt, 2017), Harvard Professor Mihir A. Desai takes on the daunting task of explaining the world of finance through the prism of the humanities, yes the humanities. Using stories from literature, film, music, popular culture and daily life, Desai argues that rather than being an impenetrable jumble of algorithms used to strip the innocent of their money, the core concepts of modern finance can be used to understand how people make everyday decisions small and large about their lives. Diversification, leverage, risk and return, agency costs—all can be seen and explained without dense mathematical formulas. Whether you agree with this effort or not, you will never read Jane Austen’s Pride and Prejudice or see Mel Brooks’ The Producers the same way again. Daniel Peris is Senior Vice President at Federated Investors in Pittsburgh. Trained as a historian of modern Russia, he is the author most recently of Getting Back to Business: Why Modern Portfolio Theory Fails Investors. You can follow him on Twitter @Back2BizBook or at http://www.strategicdividendinvestor.com Learn more about your ad choices. Visit megaphone.fm/adchoicesSupport our show by becoming a premium member! https://newbooksnetwork.supportingcast.fm/finance

Of what use is history, particularly for economists and people in finance? If you’ve ever wondered about this, you should read Daniel Peris‘s book Getting Back to Business: Why Modern Portfolio Theory Fails Investors and How You Can Bring Common Sense to Your Portfolio (McGraw-Hill Education, 2018). Before he became a portfolio manager, Peris was a professional historian. He was trained as such, wrote books about such, and taught such. In Getting Back to Business, he brings his background in this regard to a little considered question: Why, historically speaking, do we invest money the way we do? The “we” here is your financial advisor and, if you invest your own money, you. And you use something called “Modern Portfolio Theory” or MPT. That theory—like any theory—has a history. It was created by particular people in a particular historical context for a specific historical purpose. It was a tool fit for that specific historical purpose. Peris masterfully traces how it was invented, disseminated, and eventually reached (pardon the expression) “market saturation” among financial advisors. It’s a fascinating story, really an intellectual-institutional history of modern investment thought. But Getting Back to Business more than an academic exercise because Peris is no longer an academic; he manages 20 billion dollars. And his historical exploration has led him to the conclusion that the tool we call “MPT” is no longer fit for purpose. It used to work, but times have changed (partly because of the widespread adoption of MPT itself) and it no longer does, at least in its standard form. Peris has some suggestions about how we might design a new tool, one better fit to modern conditions. This books is a rare beast: applied, relevant, meaningful, news-you-can-use history. Were that there were more books like it. Learn more about your ad choices. Visit megaphone.fm/adchoicesSupport our show by becoming a premium member! https://newbooksnetwork.supportingcast.fm/finance

We spoke with Ilene Grabel, Professor at the University of Denver and Co-director of the MA program in Global Finance, Trade & Economic Integration at the Josef Korbel School of International Studies. Ilene just published a very timely, interesting and important book on the evolution of the global financial governance and its institutions: When Things Don’t Fall Apart: Global Financial Governance and Developmental Finance in an Age of Productive Incoherence (MIT Press, 2017). In the foreword, Dani Rodrick from Harvard University defines the book as follows: “It happens only rarely and is all the more pleasurable because of it. You pick up a manuscript that fundamentally changes the way you look at certain things. This is one such book. Ilene Grabel has produced a daring and delightful reinterpretation of developments in global finance since the Asian financial crisis of 1997–1998.” The book is an account of the gradual, uneven, disconnected, ad hoc, and pragmatic innovations in global financial governance and developmental finance induced by the global financial crisis. In When Things Don’t Fall Apart, Ilene Grabel challenges the dominant view that the global financial crisis had little effect on the financial institutions. Most observers discount all but grand, systemic ruptures in institutions and policy. Grabel argues instead that the global crisis induced inconsistent and ad hoc discontinuities in global financial governance and developmental finance that are now having profound effects on emerging market and developing economies. Grabel’s chief normative claim is that the resulting incoherence in global financial governance is productive rather than debilitating. In the age of productive incoherence, a more complex, dense, fragmented, and pluripolar form of global financial governance is expanding possibilities for policy and institutional experimentation, policy space for economic and human development, financial stability and resilience, and financial inclusion. All this in a very enjoyable book that students, scholars, policymakers and managers of financial institutions should read right now. Andrea Bernardi is Senior Lecturer in Employment and Organization Studies at Oxford Brookes University in the UK. He holds a doctorate in Organization Theory from the University of Milan, Bicocca. He has held teaching and research positions in Italy, China and the UK. Among his research interests are the use of history in management studies, the co-operative sector, and Chinese co-operatives. His latest project is looking at health care in rural China. He is the co-convener of the EAEPE’s permanent track on Critical Management Studies. Learn more about your ad choices. Visit megaphone.fm/adchoicesSupport our show by becoming a premium member! https://newbooksnetwork.supportingcast.fm/finance

I was joined in Oxford by Ben Clift, Professor of Political Economy, Deputy Head of Department and Director of Research at the Department of Politics and International Studies of the University of Warwick. Ben has just published a very important, timely and interesting book on the IMF: The IMF and the Politics of Austerity in the Wake of the Global Financial Crisis by Ben Clift (Oxford University Press, 2018). The book provides the first comprehensive analysis of major shifts in IMF fiscal policy thinking as a consequence of the great financial crisis and the Eurozone debt crisis. It widely presents the IMF’s role in the politics of austerity. The book also offers an innovative theory specifying four mechanisms of IMF ideational change – reconciliation, operationalization, corroboration, and authoritative recognition. It combines in-depth content analysis of the Fund’s vast intellectual production with extensive interviews with IMF economists and management. The book is structured in seven chapters plus conclusions: 1: The IMF and the Politics of Austerity in the Wake of the Global Financial Crisis 2: Ideational Change at the IMF after the Crash 3: IMF, Economic Schools of Thought, and Their Normative Underpinnings 4: Analysing the IMF Surveillance of Advanced Economies: The Social Construction of Fiscal Space 5: The Fund’s Fiscal Policy Views and the Politics of Austerity 6: The IMF, the UK Policy Debate, and Debt & Deficit Discourse 7: The IMF and the French Fiscal Rectitude amidst the Eurozone Crisis Conclusion – IMF Intellectual Authority and the Politics of Economic Ideas After the Crash IMF has been strongly criticised by economists, politicians, intellectuals and activists of the protest movements. This book might surprise many of them because it presents a much more pluralist if not heterodox set of economic ideas present and followed by the IMF’s economists and managers. The readers would discover that during the Greek crisis the IMF suggested a more flexible approach. In the case of Britain the IMF criticised the austerity policy of the Coalition Government. And in general the IMF has recently signalled that fiscal rectitude is not enough without support to aggregate demand and that inequality has to be monitored as well. Professor Clift argues that the Fund’s crisis-defining economic ideas, and crisis legacy defining ideas, were important in constructing particular interpretations of the crisis. ‘Fund leadership articulated a Keynesian market failure understanding of the crisis, focussing on deficiencies of aggregate demand, and on the destabilising properties of financial markets. The Fund’s re-emphasising of Keynesian insights into liquidity traps, demand deficiency, higher fiscal multipliers, and the folly of all countries consolidating at once sat outside orthodox economic policy-making ideas at the time. These were not the lessons policy-makers had typically drawn from academic economics before the crisis.’ This book is for those interested in the politics of economic ideas and in the interaction between economics and politics. IMF is presented as an arena where new economic ideas and the dominance of different schools of economic thought emerge. Despite internal politics, institutional rules and member states’ influence, the IMF has shown autonomy and intellectual authority. Our conversation ended talking about the future of the institution particularly looking at the European Union financial integration. Learn more about your ad choices. Visit megaphone.fm/adchoicesSupport our show by becoming a premium member! https://newbooksnetwork.supportingcast.fm/finance

In Austrian Reconstruction and the Collapse of Global Finance, 1921–1931 (Harvard University Press, 2018), Nathan Marcus, analyzes the events that took place around the financial crisis in Austria after World War I. When Austria was the first interwar country in Europe to suffer a hyperinflation the League of Nations stepped in to offer financial support and advice. But a total collapse of the financial system in 1931 couldn’t be avoided. Nathan Marcus offers a new perspective on the already well researched subject and an individual approach not only with regards to content but also on a methodological level by interlacing multiple perspectives and sources (such as journals and caricatures, literature, anecdotes etc.) with each other to create a wider understanding for the events. Nathan Marcus is an Assistant Professor of Modern European History at the Higher School of Economics, National Research University, Saint Petersburg, Russia. Learn more about your ad choices. Visit megaphone.fm/adchoicesSupport our show by becoming a premium member! https://newbooksnetwork.supportingcast.fm/finance

Michael Sandel is Anne T. and Robert M. Bass Professor of Government at Harvard University. Sandel is an internationally renowned political philosopher who Newsweek has lauded as “the world’s most relevant living philosopher.” His latest project is a video series titled What Money Can’t Buy, which has Michael and an international group of college students exploring the question “What, if anything, is wrong with a world in which everything is for sale?” You can view the series for free at whatmoneycantbuy.org.The "Why We Argue" podcast is produced by the Humanities Institute at the University of Connecticut as part of the Humility and Conviction in Public Life project. Learn more about your ad choices. Visit megaphone.fm/adchoicesSupport our show by becoming a premium member! https://newbooksnetwork.supportingcast.fm/finance