Sunday, February 25, 2024

Nathan Perl-Rosenthal's "The Age of Revolutions and the Generations Who Made It"

Nathan Perl-Rosenthal is an historian of the eighteenth- and early nineteenth-century Atlantic world. He focuses on the political and cultural history of Europe and the Americas in the age of revolution, with particular attention to the transnational influences that shaped modern national politics. He received his PhD in history from Columbia University in 2011, with a dissertation on epistolarity and revolutionary organizing, and published a first book on a different topic in 2015: Citizen Sailors: Becoming American in the Age of Revolution. That book, which argues that American sailors of the revolutionary era had an unknown and significant role in the formation of modern practices of national identification, won the Society for French Historical Studies’ Gilbert Chinard Prize, for “a distinguished scholarly book published in North America in the history of themes shared by France and North, Central, or South America.”

Perl-Rosenthal applied the “Page 99 Test” to his new book, The Age of Revolutions and the Generations Who Made It, and reported the following:
The ninety-ninth page of The Age of Revolutions and the Generations Who Made It drops you into a gathering political crisis in the city of Cuzco, high in the Andes mountains of South America, in 1783. I have admit that this page is not half bad as an introduction to the book’s scope, characters, and themes. Cuzco and Peru are main settings for the book—I return to them repeatedly throughout its pages, alongside examinations of North America, Haiti, France, and the Netherlands. This page describes a struggle for power between Spanish royal officials and Cuzco criollos (American-born Spaniards). Conflicts of this sort appear over and over in the book. And the main figure on this page, Madre Maria de la Concepción Rivadeneyra, is one of the six amazing individuals around whom I built a large part of the book’s story. (Spoiler alert: she was a noblewoman-turned-nun, fond of chocolate, mother-of-pearl, and high-stakes legal maneuvers!)

Still, this page is something of an outlier in the book. The political confrontation it describes is acute, while the book’s approach to politics is generational. That is, I aim to show how political change in the age of Atlantic revolutions (circa 1760 to 1825) unfolded over the course of decades, not weeks, months or even years. These long revolutionary processes had to start somewhere—sometimes with the sort of acute conflict that we see on page 99—but their full unfolding took years. A second oddity of this page, in the context of the book, is that there is not much in it about political organizing. The argument of The Age of Revolutions, in a nutshell, is that revolutionaries before 1800 had a very difficult time organizing sustained mass movements, especially across lines of class and racial difference, but that after 1800, as a new generation took command, sustained mass political movements became easier to form and keep together. To see how Madre Maria fits into this thesis, though, all you have to do is read the rest of chapter four (pp.79-104)!
Learn more about The Age of Revolutions at the Basic Books website.

--Marshal Zeringue

Friday, February 23, 2024

Merry Morash's "In a Box"

Merry Morash is Professor of Criminal Justice and University Distinguished Professor at Michigan State University. She is the author of Women on Probation and Parole: A Feminist Critique of Community Programs and Services.

She applied the “Page 99 Test” to her new book, In a Box: Gender-Responsive Reform, Mass Community Supervision, and Neoliberal Policies, and reported the following:
Page 99 presents the words of three women whose probation or parole agents referred them to mental health counseling. Two of the women described a connection between counseling and stopping illegal activity and one did not. This page, like most other pages, gives a good indication of what is contained in In a Box, because it cites what 3 of the 118 women who told their life stories said about themselves. It is also a good indication of the book’s contents because it focuses on some helpful actions that probation and parole agents take, and it is therefore consistent with a theme that runs through the book, which is that the Michigan Department of Corrections gender responsive reforms, and more generally reforms in supervision for everyone, “worked.” This is very different than the many books and articles that show harm after harm perpetuated by correctional actions and interventions. It is also consistent with the book’s recognition that some women in the criminal legal system continue breaking the law despite seemingly helpful interventions.

It is important to recognize that page 99 only gives a glimpse into the book’s contents. That page does not show deviations from the reforms and how they have harmful effects. Even more important, this page does not show how juvenile courts, neoliberal housing and welfare policies, and time limitations and other reasons for unavailability of mental health and substance abuse services undermine reforms. This page does not capture the flow of the book which entices the reader to get on to the next chapter after reading about Starting Points in life and moving towards Endpoints for 6 of the women. Finally, this page is 67 pages away from the last chapter, which highlights policy reforms including but much more encompassing than correctional change that the women on probation and parole recommend and that I back up with empirical evidence of success.
Learn more about In a Box at the University of California Press website.

--Marshal Zeringue

Wednesday, February 21, 2024

Michael Sierra-Arévalo's "The Danger Imperative"

Michael Sierra-Arévalo is an Assistant Professor in the Department of Sociology and Associate Director of the Liberal Arts Honors Program at the University of Texas at Austin.

His new book, The Danger Imperative: Violence, Death, and the Soul of Policing, shows how policing’s preoccupation with danger shapes police culture and violence in the United States.

Sierra-Arévalo applied the “Page 99 Test” to The Danger Imperative and reported the following:
Half of page 99 is taken up by the image of a Dallas police car swathed in stuffed animals, flowers, balloons, and signs supporting police. The shrine was erected in the days following the July 7, 2016, ambush on Dallas police which killed 5 officers and injured an additional 9. One of those signs reads, “#BackTheBlue Because Someone I Call Dad Is on the Force!” The photograph was sent to me by an officer from West River who flew to Dallas with other WPD officers to pay their respects to the fallen officers. The remainder of the page begins to describe the days following the ambush, during which nearly a thousand officers from across the country rushed to Dallas to attend fallen officers’ memorial services. During one such service, President Barack Obama reminded every officer present of the unique danger of their work.

The Page 99 Test captures a core element of The Danger Imperative — the rare but no less real violence that claims the lives of officers. But it does not articulate my broader argument about how such violence is core to the recreation of police culture and inequalities in police violence.

Ironically enough, though, that the one page a potential reader turns to is about a tragic incident of violence and its use as proof of policing’s profound danger is an eerily concise reflection of The Danger Imperative’s argument. As I describe in the book, though deadly violence is exceedingly rare in the scope of officers’ work, the preoccupation with violence and the provision of officer safety are emphasized at all levels of the police institution. Incidents like the Dallas ambush serve as dramatic proof not only for officers in Dallas, but for any officer, no matter where they work, that any shift might be one in which they are confronted with a fight for their very lives.

Through academy training, unquestioned rituals, powerful symbols, and the daily task of making sure they go home at the end of their shift, officers reconstruct their world and work as one defined by the possibility of violence and death. As I continually reiterate throughout The Danger Imperative, police face very real violence. But the intense emphasis on such violence within police culture encourages behaviors that undermine police legitimacy, harm public wellbeing, and even lead to the injury and death of officers themselves.
Visit Michael Sierra-Arévalo's website.

--Marshal Zeringue

Tuesday, February 20, 2024

David L. Weimer and Aidan R. Vining's "Dog Economics"

David L. Weimer is Fellow of the National Academy of Public Administration. His contributions to public policy scholarship have been widely recognized as he has received the Policy Field Distinguished Contribution Award from the Association for Public Policy Analysis and Management and the Outstanding Achievement Award from the Society for Benefit-Cost Analysis. Aidan R. Vining is Emeritus CNABS Professor of Business and Government Relations, Simon Fraser University. He is a winner of the John Vanderkamp Prize (Canadian Economics Association) and the J.E. Hodgetts Award (Institute of Public Administration of Canada). He has published widely.

They applied the “Page 99 Test” to their new book, Dog Economics: Perspectives on Our Canine Relationships, and reported the following:
Page 99 falls in a chapter reporting on original empirical research by one of the authors showing how economists ask people about their willingness to make tradeoffs between money and mortality risk­––in this case for their dog! More generally, Dog Economics draws on economic theory and evidence to organize a synthesis of the relationship between dogs and humans. It might (incorrectly, we think) imply a book aimed primarily at professional economists rather than general readers interested in dogs. However, the page 99 chapter provides an accessible explanation of how economists estimate the implicit value people place on their lives and especially the lives of their pet dogs.

Economists use a variety of methods to measure the value of statistical life (VSL). The VSL estimates the implicit value an average person places on his or her own life in making decisions that affect his or her own mortality. The VSL is used by regulators to place a monetary value on avoided deaths that are predicted to occur from proposed rules aimed at reducing mortality risk. Rules, such as those that set standards for pet food quality, aim to reduce the mortality risk for dogs: the value of a statistical dog life (VSDL). To value these reductions, however, regulators need a plausible estimate of the VSDL, which is the implicit value that people on average place on the lives of their dog when making decisions relevant to changes in the mortality risk faced by their dogs. The page 99 chapter carefully explains how a survey experiment was used to estimate the VSDL. Interestingly, the VSDL has a number of potential uses related to a dog’s life, such as in determining compensation in cases of the wrongful death of a dog and the allocation of dog custody in divorce cases.
Learn more about Dog Economics at the Cambridge University Press website.

--Marshal Zeringue

Monday, February 19, 2024

George Fisher's "Beware Euphoria"

George Fisher is the Judge John Crown Professor of Law at Stanford Law School, where he has been teaching evidence, prosecution practice, and criminal legal history since 1995. He began practice as a Massachusetts prosecutor and later taught at Boston College Law School, Harvard Law School, and Yale Law School.

Fisher applied the “Page 99 Test” to his new book, Beware Euphoria: The Moral Roots and Racial Myths of America's War on Drugs, and reported the following:
Page 99 of Beware Euphoria recounts a singular episode in the history of American attitudes toward alcohol prohibition. Set in Philadelphia in 1788, this vignette concerns an address by Dr. Benjamin Rush, widely thought the leading physician of his day, to a congress of American Methodists. Rush counseled the congress to tighten the faith's rule governing distilled alcohol. That rule traced to Methodism's founders, John and Charles Wesley, who enjoined followers in 1743 to shun "[d]runkenness, buying or selling spirituous liquors, or drinking them, unless in cases of extreme necessity." Speaking from a medical standpoint, Rush declared spirits necessary only when "a person was chilled with cold, or wet, or was ready to faint with fatigue." After Rush's address the congress struck out the last six words of the Wesleys' original injunction -- "unless in cases of extreme necessity" -- rendering the rule an absolute ban against "buying or selling spirituous liquors, or drinking them." This new rigidity, however, proved a bridge too far. It staked out an extreme moral position, one that outstripped mainstream morality. Only two years later the Methodists reversed the change.

From this episode the reader can discern four themes of my book. The first is that this study of the moral roots of America's war on drugs takes a long look backward at the regulation of alcohol and, even earlier, of nonprocreative sex. The second is that all three moral regimes -- those governing sex, alcohol, and recreational drugs -- reflect a moral revulsion to appetitive pleasures that blot out reason. Third, all three moral regimes extended an indulgence in cases of necessity, especially medical necessity. Hence no moral teacher ever rejected all sex, for humans must procreate. Anti-alcohol regimes, likewise, always made provision for medicinal use. And dangerous addictive drugs, even fentanyl, are perfectly legal when prescribed or employed by physicians. A fourth theme, finally, is that legal regimes governing euphoric substances or activities that outstrip mainstream morality typically cannot hold. Hence almost no Western prohibition of even nonintoxicating drinking has survived much longer than a dozen years.

These four themes define the first half of the book and explain the first half of my subtitle: "The Moral Roots and Racial Myths of America's War on Drugs." The book's latter half considers those "racial myths." If moral impulses largely motivated our earliest anti-drug laws, racial hatred did not. Hence the book documents overwhelming historical evidence disproving commonly uttered claims that racial prejudice prompted early lawmaking against opium, cocaine, and cannabis. Such claims prove not merely mistaken -- they are exactly wrong. For these were laws about whites, written by white lawmakers anxious to protect the moral purity of white women and youth. White cops enforced these laws primarily against white users and those who sold to them. So a very different form of racism was at work, one that exposed indifference to the moral welfare of nonwhites.
Learn more about Beware Euphoria at the Oxford University Press website.

--Marshal Zeringue

Sunday, February 18, 2024

Alexa Bankert's "When Politics Becomes Personal"

Alexa Bankert is Associate Professor in the Department of Political Science at the University of Georgia. Her work has appeared in peer-reviewed journals such as the Journal of Politics, Political Psychology, and Political Behavior. She is the recipient of several awards, including the Distinguished Junior Scholars Award, given by the Political Psychology Section of the American Political Science Association.

Bankert applied the “Page 99 Test” to her new book, When Politics Becomes Personal: The Effect of Partisan Identity on Anti-Democratic Behavior, and reported the following:
Page 99 provides a detailed description of party affiliations among Dutch respondents in one of the many data samples I analyze in the book to show the distinction between negative and positive partisanship. While page 99 is necessary to assess the extent to which these two types of partisanship exist among Dutch voters, it does not provide any insights into their relationship or their differential effects on political behavior. It also focuses exclusively on the Netherlands - which presents only one of the five countries I investigate in the book. Yet, page 99 reiterates two interesting findings: First, negative partisanship is stronger than positive partisanship in many European multi-party system – which means that negativity in politics is not an exclusively American phenomenon. Second, right-wing parties tend to evoke the strongest levels of negative partisanship in many European multi-party systems. Ultimately, the book argues that partisan animus is not inevitable: We can be strong partisans without demonizing our political opponents.
Visit Alexa Bankert's website.

--Marshal Zeringue

Saturday, February 17, 2024

Jane Ohlmeyer's "Making Empire"

Jane Ohlmeyer is Erasmus Smith Professor of Modern History at Trinity College Dublin, where she served as Trinity's first Vice-President for Global Relations (2011-14). She was a driving force behind the 1641 Depositions Project and the development of the Trinity Long Room Hub Arts and Humanities Research Institute which she directed (2015-20). She is a passionate teacher and has held appointments and fellowships at institutions in Brazil, England, France, India, Scotland, South Africa, and the US. She chaired the Irish Research Council (2015-21) and has served on numerous editorial and other boards. She is the author or editor of numerous articles and 13 books. She is the executive producer of a 6-part documentary called From that Small Island: the story of the Irish.

Ohlmeyer applied the “Page 99 Test” to her new book, Making Empire: Ireland, Imperialism, and the Early Modern World, and reported the following:
Page 99 of Making Empire is the opening page of Chapter 4, entitled ‘Agents of Empire’, which I quote from fulsomely here.

The chapter begins with a heated exchange taken from Brian Friel’s play, Making History (1988), between Hugh O’Neill, earl of Tyrone, and his wife, Mabel, about her brother, Henry. Hugh roared:
It’s always the Henrys, the menials in the middle, who get the kicks, isn’t it? … Our Henry? Nobody better. London couldn’t have a more dutiful servant than Our Henry. As you and I know well – but as London keeps forgetting – it’s the plodding Henrys of this world who are the real empire-makers (Brian Friel, Making History (London, 1989), p. 27)
Sir Henry Bagenal, like his father Sir Nicholas, had served as the marshal of the army in Ulster and as a member of the Irish privy council. Chapter 2 of Making Empire had focussed on anglicisation and drew on the life and experiences of Hugh O’Neill, earl of Tyrone, and Chapter 3 had looked to his wife, Mabel, and her sister Mary, as it explored assimilation and the particular significance of marriage. This chapter uses the careers of their brother, Henry Bagenal, and O’Neill’s close ally, Red Hugh O’Donnell, as points of departure from which to discuss empire and enterprise. Bagenal and O’Donnell, one a member of the Protestant ‘New English’ community and the other a Catholic Gael, came from very different cultures and beg the question of what it meant to be ‘Irish’ at the turn of the seventeenth century? Strictly speaking only the Gaelic-speaking Catholic natives regarded themselves as being ‘Irish’. The ‘Old English’ (or those of Anglo Norman ancestry), many of whom were Catholic, consistently stressed their ‘Englishness’ often at the expense of their ‘Irishness’. The ‘New English’ settlers, the majority of whom were Protestant, who colonized Ireland from the 1530s, flaunted their ‘Englishness’.

Serendipitously page 99 does provide a number of insights into a book which is about how empire shaped Ireland and how people from Ireland then made – and unmade – empires.

First, on page 99 we return to Friel’s play, Making History, which I use to interrogate four interconnected themes which underpin Making Empire: first, that Ireland formed an integral part of the English imperial system with its land and labour fuelling English expansionism; second, that people from Ireland operated as agents of empire(s); third, Ireland served as laboratory in and for the English empire; and, finally, the impact of empire(s) on people living in early modern Ireland.

Second, the mention of O’Neill and O’Donnell on page 99 serves as a reminder of Irish opposition to English imperialism both during the Nine Years War (1594-1603) and over the centuries, as Ireland served as an exemplar for resistance to imperial rule. Resistance ranged from aristocratic revolts to major rebellions (after 1594, 1641 and 1688) and from agrarian, political, and intellectual protest to a continued commitment to Catholicism, to speaking the Irish language, and following Irish ways.

Third, issues of identity touched on page 99 – and so central to Friel’s play - permeate Making Empire. What did it mean to be ‘Irish’, ‘English’, and even ‘British’ in an era of intense colonisation and mobility? What becomes clear is that ‘Irishness’ meant a variety of things to different people and that events that occurred in the early modern period continue to shape identity in Ireland today.

Fourth, there is much truth in Friel’s assertion on page 99 that ‘the plodding Henrys of this world’ were ‘the real empire-makers’. However, they were male and female and came from diverse faiths, ethnic groups, and social backgrounds as they traversed – as migrants, merchants, mercenaries, and menials - the empires of the early modern world. By the 1660s men and women from Ireland were to be found in the Spanish, French, and Dutch Caribbean, the Portuguese and later Dutch Amazon, across New Spain, and in English settlements from Newfoundland to the Chesapeake in North America, the Caribbean, India and the Mediterranean, at Tangier in North Africa. By the 1680s Irishmen, involved in the trade of enslaved people, were also based in West Africa. In short, the Irish were trans-imperial, creating an ‘Irish global empire’ built on the back of other European powers.

What is less clearly stated on page 99 but is central to Making Empire, are two things. First, how, during the early modern period, Ireland served as laboratory for imperial rule as men from Ireland established structures and formulated policies that were first implemented in colonial Ireland and later transferred to other parts of the English/British empire. Ethnocentric ideas and ‘tools of empire’ were trialled in Ireland and then adopted, albeit having been adapted to suit local circumstances, throughout the early modern Anglophone world. They included plantation and modes and structures of governance; policies and practices associated with Anglicization, especially the promotion of English culture, language, religion, education and law; and, finally, knowledge gathering and the need to map and survey land, people, and natural resources. Second, how empires shaped the lives, the landscapes, and the mindsets of those living in early modern Ireland and how early modern events and experiences of empire were remembered (or not), represented, and mis-represented.
Visit Jane Ohlmeyer's website.

--Marshal Zeringue

Friday, February 16, 2024

Troy Tassier's "The Rich Flee and the Poor Take the Bus"

Troy Tassier is a professor of economics at Fordham University with additional affiliations in the Urban Studies Program and the International Political Economy and Development Program. He is a world expert in the fields of economic epidemiology and social network analysis whose comments on the Covid-19 pandemic appeared in major media outlets such as the Associated Press, Reuters, Chicago Tribune, Los Angeles Times, New York Times, Washington Post,, Crain’s New York Business, and many others.

Tassier applied the “Page 99 Test” to his new book, The Rich Flee and the Poor Take the Bus: How Our Unequal Society Fails Us during Outbreaks, and reported the following:
Page 99 of The Rich Flee and the Poor Take the Bus contains a transition between two sections of Chapter 4, “Bridges of Disease.” The top of the page, concludes a description of a 17th century Black death quarantine in Eyam, a small English village. The quarantine successfully prevented a plague outbreak from spreading outside of Eyam and into other nearby villages. The bottom of the page begins to describe a clever experiment by social psychologist Stanley Milgrom from the 1960s. Milgrom chose a group of random people out of two phone books – one from Wichita, Kansas and the other from Omaha, Nebraska. He then mailed individual postcards to the selected people and asked them to attempt to contact a specific banker in Boston, Massachusetts. The recipients were asked to mail their postcard to a personal friend whom they believed to be socially closer to the Boston banker. These second recipients were asked to do the same, and onward, until someone received the postcard that knew the banker personally. This person then mailed the postcard directly to the banker. Milgrom counted the number of mailings that it took to reach the Boston banker from the original recipients. On average the postcards arrived to the banker in five to six mailings. Milgrom’s experiment helped to create the “six-degrees of separation” and “it’s a small world” memes that are familiar today. The paths connecting people from the American heartland to Boston are then used in later pages to describe similar paths that allow epidemics to spread throughout society.

In some ways the Page 99 Test works well despite there being different ideas at the top and bottom of the page. The Rich Flee and the Poor Take the Bus, alternates between historical examples of real-world epidemic outbreaks, like the one in Eyam, and descriptions of behavior and patterns of social connections (friends, relatives, co-workers, and others) that determine how epidemic outbreaks spread in today’s world. Ultimately, however, the Page 99 Test fails to get to the heart of the book. Our day-to-day interactions often lead to impoverished and socially marginalized people being harmed most frequently during epidemic outbreaks. The reader will not be able to connect the Eyam quarantine or Milgrom’s experiment to the book’s central topics of social and economic inequality by reading only page 99.

However, the material on page 98, when combined with page 99, offers an example that is closer to the book’s more general theme. The Black death quarantine in Eyam only succeeded because of the financial support of the Earl of Devonshire. He provided the Eyam villagers with food and other goods that allowed them to survive their quarantine. Without this support the quarantine would have failed and this Black death outbreak would have spread more widely. Interactions like these between epidemics and economics help to determine epidemic outcomes in the past as well as today.

While there is an element of chance in epidemic outcomes, there is also a great regularity that exists across time. Marginalized and disadvantaged groups of people most often bear the brunt of physical and financial turmoil during epidemic outbreaks. The Rich Flee and the Poor Take the Bus describes the many entangled ways that our social world and our financial circumstances intermix with biology and medicine to determine who is most effected by epidemic outbreaks and why. It also offers suggestions for how to better protect all of society when future epidemic outbreaks occur by thinking about epidemics in social and economic terms in addition to more conventional ideas from biology and medicine.
Visit Troy Tassier's website.

--Marshal Zeringue

Thursday, February 15, 2024

Andre Schmid's "North Korea’s Mundane Revolution"

Andre Schmid is Associate Professor in the Department of East Asian Studies at the University of Toronto.

He applied the “Page 99 Test” to his new book, North Korea’s Mundane Revolution: Socialist Living and the Rise of Kim Il Sung, 1953–1965, and reported the following:
Could Ford Maddox Ford have ever imagined that his Page 99 Test would apply to a book on a place like North Korea? Not likely, but it does – if only barely.

North Korea’s Mundane Revolution raises questions about the cartoon-like visions of North Korea – the military parades, the mass games, and the leaders with curious coiffures – so prominent in the media. The book argues North Korea has its own complex history, one which has enabled this one-time aspiring socialist country to survive longer than the Soviet Union. The book centers not on the Kim family and their personality cult but on how the population actively engaged in rebuilding their cities after the Korean War as part of a state and popular project to create what was called the “New Living” – a socialist-style living, in short.

Much of the book deals with the postwar turn to the family. It explores tension between how the consolidation of the Party-state came with the re-establishment of male social power – even as the regime celebrated passing the first gender equality laws in all of Asia. For many women, the gender equality laws eased the path into a wide array of wage work in realms previously dominated almost exclusively by men, everything from biologists to factory workers, architects to construction workers. And by the end of the Korean War in 1953, in which mass deaths and defections led to a 12 per cent population decline, the wage work of women was desperately needed in the centrally planned economy.

Yet participation rates of women, in the eyes of economists, remained stubbornly low, contributing to a dire labor shortage that interfered with economic growth – the key, it was believed, for transitioning to full socialism. While neither officials nor economists quite came out to say it explicitly, they blamed women who stayed at home – “playing and eating,” they accused – for holding the country back.

My page 99 deals with a number of top-down state initiatives to heighten participation rates. Model stories of the likes of Yi Poksil who, responding to the call, took up work in a tobacco plant, stand side by side with letters-to-the-editors from readers who took it upon themselves to complain about women and officials who did not do their part. So, too, does my page 99 recount the resistance of factory managers, who did not want to invest in daycare facilities to enable wider participation. The page gives a sense of the social richness of urban life and how for a state often seen as totalitarian, even the implementation of the simplest priority was not so straightforward. The story doesn’t stop there, however, and the rest of the book picks up on themes such as the growth of non-routinized women’s labor, which often enabled local officials to meet their goals and get the central plan to “work”; the lionization of mother-workers; and the various ways the Women’s Federation carefully within the authoritarian environment to legitimate domestic work under a regime that could not quite come around to see their efforts in the home as ‘labor.’ Page 99, in short, brings up one aspect of a bigger theme, while giving a good sense of the book’s methodology.
Learn more about North Korea’s Mundane Revolution at the University of California Press website.

--Marshal Zeringue

Wednesday, February 14, 2024

Richard Holden's "Money in the Twenty-First Century"

Richard Holden is Professor of Economics at UNSW Business School, Director of the Economics of Education Knowledge Hub @UNSWBusiness, co-director of the New Economic Policy Initiative, and President of the Academy of the Social Sciences in Australia.

Prior to that he was on the faculty at the University of Chicago and the Massachusetts Institute of Technology.

Holden received an AM and a PhD in economics from Harvard University.

He applied the “Page 99 Test” to his new book, Money in the Twenty-First Century: Cheap, Mobile, and Digital, and reported the following:
From page 99:
There is an intellectual history to the idea that what it is known as “fractional reserve banking” could be done away with and that there could be a full separation of credit and money creation. The so-called “Chicago Plan” was a banking-reform plan proposed by a number of University of Chicago economists in the aftermath of the Great Depression. The plan proposed a complete separation of the monetary and credit functions of the banking system. To achieve this, the plan had two limbs. First, deposits would need to have 100% backing by government-issued money. Second, financing of new (bank) credit could only occur through borrowing of government-issued money, or from retained earnings. That is, there could be no credit provision through the creation of money by commercial banks.

Perhaps ironically, this would return the way the Fed influences interest rates to the way it was done during the term of Paul Volcker as Fed chair in the late 1970s and early 1980s. When Volcker took over as Fed chair the Federal Funds Rate was managed by increasing or decreasing the amount of reserves in the banking system. The Fed would create a shortage of reserves when they wanted to push official rates up and would create a surplus of reserves when they want to push the rate down. Volcker changed this in a meeting on October 6, 1979 that also ushered in his era of inflation-conquering high interest rates. Volcker instituted a change where the quantity of growth in money supply (in reality, bank reserves) would be set and the interest rate would adjust to equilibrate supply and demand. This was consistent with conservative economist Milton Friedman’s doctrine of monetarism which held that inflation was very closely linked to growth of the money supply—captured in Friedman’s aphorism “inflation is always and everywhere a monetary phenomenon.”

There is one important way in which Fedcoin would expand the toolkit of central bankers. And that concerns what happens when they want to set interest rates really low. Recall from earlier that, since the early 1990s, many central banks in advanced economies—the Fed included—have made explicit an inflation target. That is, they try to adjust interest rates to keep inflation within some kind of low (but not zero) level. In the U.S. that’s 2%. In Australia it’s a band between 2 and 3 percent. But the idea is the same—low, stable inflation. Remember that on of Raghu Rajan’s key accomplishments at the RBI was to chart a path to RBI credibility on inflation. As he put it “the best way for the central bank to generate growth in the long run is for it to keep inflation low and steady…in order to generate sustainable growth, we have to fight inflation first.”
This page of Money in the 21st Century goes to the heart of the book’s core argument—which is that the United States Federal Reserve should create a Central Bank Digitial Currency (CBDC) that I dub “Fedcoin.” This is an essential step to ward off the creation of a potentially dominant private digital currency, like the one Facebook attempted with Libra/Diem. It is also necessary to ensure that China’s eCNY digital Yuan does not leapfrog the US Dollar as the world’s global reserve currency.

Creating a Fedcoin involves a number of important design choices, and page 99 speaks to perhaps the most important of those choices. One option is to allow everyone to have a (digital) account at the Fed, thereby removing the need for the current commercial banking system altogether. A second option—one which I argue is better—is for the current commercial banking system to operate along side Fedcoin. But this would still change commercial banking. At present, commercial banks essentially create money when they make loans. When a loan is made banks put the loan amount in an account for the borrower (a liability for the bank), and create a corresponding obligation for the borrower to repay the loan (an asset for the bank).

Fedcoin would change this. The Fed would control the amount of Fedcoins in circulation, and therefore perform all credit creation. Commercial banks would be mere intermediaries—deciding to whom to make loans. This would change the current roles of the Fed and commercial banks in a way that I argue has many benefits.
Visit Richard Holden's website.

--Marshal Zeringue