How Economics Explains the World: A Short History of Humanity

by Andrew Leigh

“If you read just one book about economics, make it Andrew Leigh's clear, insightful, and remarkable (and short) work.” —Claudia Goldin, recipient of the 2023 Nobel Prize in Economics and Henry Lee Professor of Economics at Harvard University

A sweeping, engrossing history of how economic forces have shaped the world—all in under 200 pages

In How Economics Explains the World, Harvard-trained economist Andrew Leigh presents a new way to understand the human story. From the dawn of agriculture to AI, here is story of how ingenuity, greed, and desire for betterment have, to an astonishing degree, determined our past, present, and future. 

This small book indeed tells a big story. It is the story of capitalism – of how our market system developed. It is the story of the discipline of economics, and some of the key figures who formed it. And it is the story of how economic forces have shaped world history. Why didn’t Africa colonize Europe instead of the other way around? What happened when countries erected trade and immigration barriers in the 1930s? Why did the Allies win World War II? Why did inequality in many advanced countries fall during the 1950s and 1960s? How did property rights drive China’s growth surge in the 1980s? How does climate change threaten our future prosperity? You’ll find answers to these questions and more in How Economics Explains the World.

Genres: Economics, History, Nonfiction, Finance, Business, Audiobook, Politics

240 pages, Kindle Edition

Published September 3, 2024

About the author

Andrew Leigh is a member of the Australian Parliament. He holds a PhD from Harvard University, and is a fellow of the Academy of Social Sciences in Australia. Before being elected in 2010, he was a professor of economics at the Australian National University. His books include The Shortest History of Economics, The Luck of Politics and Randomistas.

Reviews

[Jason Furman · Rating 5 out of 5]

Claudia Goldin's blurb pretty much nails it, "If you read just one book about economics, make it Andrew Leigh's clear, insightful, and remarkable work."

Leigh's book sets out to "tell the story about how capitalism and the market system emerged; discuss the key ideas and people who shaped the discipline of economics; and outline how economic forces have affected world history" and succeeds at all three.

It is relatively short and easy reading, proceeding chronologically from the advent of agriculture to the present day. Underlying it is an immense wealth of scholarship and economic ideas about economic history, the process of growth, and economic concepts like opportunity cost and thinking on the margin that are almost invisibly woven into the fabric throughout the book.

The overarching theme is enthusiasm for the enormous progress we have made economically, the importance of economics in helping foster that progress, but also enthusiasm for a more robust social safety and appreciation of the role of government in addressing myriad market failures.

Most economists would benefit a little from the links it makes between different topics (and could read it quickly) but it is mostly written for--and I would guess enjoyable for--non specialists.

[Michael Muntisov · Rating 3 out of 5]

In his book How Economics Explains the World, author Andrew Leigh describes events that affected the course of world history. These range widely from discussions on Slavery to Climate Change; from War to Artificial Intelligence. In each case the author tries to draw on economic theory to explain why historical events occurred the way they did. The result is a compendium of interesting titbits.

For example, Leigh discusses how items we consider trivial today – mirrors and clocks – changed society in their day; why gridded cities produced the first skyscrapers; how a slaughterhouse inspired the factory assembly line; how the imposition of import tariffs prolonged the Great Depression; why democracies with a free press are extremely unlikely to suffer a famine; and how the COVID pandemic caused our current bout of inflation.

Leigh’s book has the subtitle “A Short History of Humanity”. This claim makes it a hard book to characterize. It is part Freakonomics (subtitle: The Hidden Side of Everything, 268 pages), part Sapiens (subtitle: A Brief History of Humankind, 512 pages) and part Guns, Germs and Steel (subtitle: A Short History of Everybody for the last 13,000 years, 580 pages).

Compared to these ‘short’ books it is even shorter coming in at 240 pages. The result is a narrative that bounces around leaving the reader hanging at times, and with the economic and historical threads very thin on occasion.

So even though How Economics Explains the World is not the most cohesive of narratives, it does offer an easy-to-read, if incomplete, history. The book contains a multitude of anecdotes that may prompt the reader to embark on more complete readings if they wish to explore some events more fully.

Link to my full review: https://courtofthegrandchildren.com/a...

[katie eu · Rating 4 out of 5]

a great starter book for those interested in economics. the ending quote "capitalism doesn’t guarantee the wellbeing of those who lack capital" made me do a double take. lots to think about.

[Pete · Rating 3 out of 5]

How Economics Explains the World : A Short History of Humanity (2024) by Andrew Leigh is an impressively short economic history of the world. Dr Andrew Leigh is a former professor of economics at ANU who is now a member of the Australian parliament.

Leigh has written a number of books about economics and is clearly a very smart guy. It’s quite incredible that he doesn’t have a senior job as Treasurer of Finance Minister in the Australian government. However, he is from the Australian Capital Territory. He is not in a strong ALP faction. So, he writes books and hosts podcasts instead of being a major part of the government.

This is the sixth book by Leigh that I’ve read and it is the weakest. It tries to cover too much in too few words. Short books are usually better. But, in this case, a longer book would better suit the aim of writing a book of economic history.

The first five chapters cover economic history up until the twentieth century. This is somewhat typical of economic history books but this book takes it to extreme.

The nine or so chapters on the twentieth century are very quick. They reference everything under the sun. This shows Leigh’s remarkable breadth of knowledge and his understanding. It would be hard not to learn something from them. Leigh is firmly from the center left and the book reflects his opinions there.

How Economics Explains the World is quite a good book. It’s surprising that it was in the Economist’s list of the best books for 2024. It’s too short and Leigh has to move too quickly over the material. However, Leigh writes well, has great understanding and does reasonably well with it.

[Shushman Choudhury · Rating 5 out of 5]

A delightful little book that lives up to the title!

[Robert Litan · Rating 5 out of 5]

This is a great, great book, the best single session book about economics for a lay audience that I have ever read (and I've even written one, Trillion Dollar Economists, aimed primarily at a business audience). Leigh has gift for distilling the essence of difficult concepts into short digestible sentences. He covers the waterfront in economics in a thoroughly enjoyable way

[Leslie · Rating 4 out of 5]

Easy to read and full of interesting nuggets! I learned a lot.

[Jung · Rating 5 out of 5]

In "How Economics Explains the World", Andrew Leigh dives into the foundational role that economics plays in shaping society, offering a compelling narrative that connects major historical milestones to economic principles. Economics, he argues, is not merely an abstract field of numbers and models; rather, it is deeply embedded in the choices we make, the policies we uphold, and the infrastructure we build. Through an exploration of epochs like the Agricultural and Industrial Revolutions, the Age of Sail, and the transformative policies of the 20th century, Leigh illustrates how economic forces have driven humanity forward, steering societies towards growth, prosperity, and even conflict.

Leigh starts with the Agricultural Revolution, a defining moment in history that occurred over 12,000 years ago, setting the stage for settled societies and specialized trades. This period, he notes, fundamentally changed how people lived, allowing communities to produce food surpluses that supported diverse social roles, innovations, and early urbanization. However, with these advancements came new issues, like malnutrition due to diet changes and the rise of social hierarchies that exploited wealth accumulation. Leigh highlights that Eurasia’s geographic advantages—abundant domesticable crops, animals, and a favorable east-west axis—enabled a faster spread of agricultural and technological progress. These factors led Eurasian societies to develop and expand more quickly, often at the expense of others.

As societies progressed, the Age of Sail marked a new chapter where human agency and technological advancements allowed for significant changes in global trade and exploration. Infrastructure like China’s Grand Canal became a symbol of economic and social transformation, integrating regions, facilitating trade, and fostering prosperity. Similarly, the emergence of maritime exploration led to the rise of global commerce, new trade routes, and connections between continents. However, Leigh does not shy away from the darker sides of these developments, such as the Atlantic slave trade and the violent spread of European colonialism. Still, cities like Venice and Alexandria flourished as trade hubs, where innovations in risk-sharing systems, such as Venice's Colaganza, democratized access to trade profits and enhanced social mobility—at least for a time. Leigh illustrates how societies that promoted social mobility and innovation grew stronger, while those that stifled these values fell into decline, as seen in Venice’s eventual economic stagnation.

The Industrial Revolution is framed as a transformative era that set the stage for the modern economic landscape. The advent of technologies like the steam engine not only accelerated industrial output but also reshaped transportation and, consequently, global trade. Although these changes did not immediately improve living standards, by the mid-19th century, they enabled substantial economic growth. Trade policies, such as Britain’s repeal of the Corn Laws, illustrated a pivot towards free trade and open markets, though not all trade was beneficial. The Opium Wars exemplified the exploitative aspects of commerce, showcasing the darker motives behind international trade expansion. As corporations and financial institutions emerged, limited liability companies allowed for large investments with minimized risk, boosting economic growth. Leigh also discusses how technological innovations, such as Ford’s assembly line, revolutionized manufacturing and consumption patterns, making products accessible to a broader demographic.

World Wars I and II dramatically impacted the global economy, setting the stage for both economic progress and turbulence in the 20th century. Leigh discusses the economic devastation in Germany post-World War I, highlighting the harsh reparations that led to hyperinflation and eventually fostered conditions for political extremism. The Great Depression, he explains, led to a clash between economic ideologies, particularly Keynesian interventionism versus Hayek’s free-market approach. Following World War II, the Allied nations’ economic power shaped a new world order. Institutions like the World Bank and IMF were established to stabilize the global economy, and the adoption of Keynesian policies supported extensive welfare programs, which fueled prosperity for the next few decades in Western nations. While this period brought substantial growth, wealth was unevenly distributed globally, leaving some regions, like Maoist China and heavily regulated India, lagging in economic development.

The latter half of the 20th century saw pivotal shifts in economic policies, particularly with the onset of inflation control and free-market reforms. Leigh highlights China’s economic transformation as an example, noting how local farmers, in defiance of collectivist policies, initiated small acts of market-based production that eventually spurred massive economic growth. At the same time, Western nations adopted policies inspired by economists like Milton Friedman, emphasizing reduced government intervention and deregulated markets. Political figures like Margaret Thatcher and Ronald Reagan implemented policies that reshaped economies, often creating significant winners and losers. For instance, unions lost bargaining power, and public assets were privatized. These reforms spurred growth but also increased inequality. Leigh further explores how inflation targeting, first implemented by New Zealand, revolutionized monetary policy by setting clear inflation goals, reducing political interference, and enhancing economic stability.

As the global economy entered the 21st century, countries like India embraced economic liberalization, fostering rapid growth and increased foreign investment. The creation of the World Trade Organization and the adoption of the Euro symbolized a deeper global interconnectedness, further integrating economies. Leigh acknowledges that while these economic transformations fostered unprecedented growth, they also brought challenges, including rising inequality and environmental concerns. Through each era, Leigh emphasizes the complex relationship between economic progress and social consequences, reminding readers that with every advancement comes a new set of challenges.

In his conclusion, Leigh reflects on economics as a crucial tool for understanding the past, managing the present, and preparing for the future. He observes that economics has allowed societies to innovate, specialize, and improve living standards, yet it has also highlighted the widening inequalities and environmental threats we face. Moving forward, he underscores the need for economic strategies that consider long-term impacts, particularly in addressing climate change and managing emerging technologies like artificial intelligence. While we have made great strides, the future demands a balanced approach that integrates economic growth with ethical considerations and sustainable practices. Economics, as Leigh presents it, is not just a study of money but a story of human resilience, creativity, and the enduring quest for a better world. Through understanding this economic journey, Leigh encourages readers to not only grasp the forces shaping our current landscape but also to actively engage in shaping a more equitable and sustainable future.

[Mahmoud Ashour · Rating 4 out of 5]

The book lives up to its title, offering a concise yet insightful history of the world through the perspective of an economist. Beginning with the agricultural revolution and concluding with the COVID-19 pandemic, it weaves historical events with economic evolution.

The author provides a wealth of knowledge on how the market economy has shaped world history, detailing the emergence and impact of economic theories such as capitalism, free trade, and Keynesianism. Alongside these, the book thoughtfully explores well-known criticisms of the capitalist system, including issues like inequality and the concentration of wealth. It also proposes potential remedies, such as high-quality free education, welfare states, progressive taxation, and infrastructure investment.

Here are some of my favourite quotes from the book:
"WWII brought advances in econometrics....One practical concern was how to best reinforce bombers to increase their chances of surviving enemy fire. Naive colleagues had looked at the underside of returning aircraft and seeing disproportionate damage to places like the tail, had suggested reinforcing those spots. But mathematician Abraham Wald...recognized that they were only seeing part of the picture What they saw was the damage that a bomber could sustain and still return home, The absence of returning bombers with nose damage suggested that it was precisely spots like this that required additional reinforcement."

"Deterrence depends on both the penalty and the odds of detection. If potential criminals place little value on the long term, then doubling police patrols might be a more cost-effective way to reduce street crime than doubling jail sentences."

"From an economic standpoint, this increase in life expectancy may well be more important than the increase in average incomes ..this point serves as a reminder that what lies at the heart of economics is well-being, not income...Economics is no more about money than architecture is about inches."

"in 1946 Henry Hazlitt wrote (a book titled) Economics in one lesson..seven decades later John Quiggin wrote Economics in two lessons..Hazlitt showed why markets foster growth a key reason why capitalist economies have produced higher living standards than communist economies. Quiggin explained how markets can fail, producing pollution, unemployment and bullying monopolies"

"Capitalism does not guarantee the well-being of those who lack capital."

[Sam Reaves · Rating 3 out of 5]

It doesn't really, not entirely, but it's an element that's missing in a lot of histories, and it makes a catchy title for an accessible introduction to the topic. Andrew Leigh starts with the labor cost of fire in prehistoric times and talks us through millennia of human progress viewed through the lens of the dismal science. It's concurrently a history of civilization and a history of the discipline of economics, fitting advances in economic theory into their historical context.
Any historical development, of course, is the product of multiple factors, whether cultural, political, military, ecological or climatic. Leigh makes sure that the economic factors are not overlooked, and he makes a reasoned case for a well-managed capitalism with acknowledgment of market failures and possible remedies. If economics is a mystery to you, this is a good place to look for clues.

[Fragmaster Jed · Rating 2 out of 5]

Was a little too quick on the causes for me. As an example, the statement that civilizations with high wealth inequality build monuments. Monuments are built as a matter of spending prioritization, not wealth inequality. The funding mechanism is independent. Kim Jong Un builds monuments to himself because of a cult of personality and because he gets to set the national priorities. Even though there is wealth inequality between Kim Jong Un and his subjects, that is in no way the root cause of North Korea building monuments. He also sets a national priority on military capability — is military capability also caused by wealth inequality? That’s just one example, and I found a number of subjects oversimplified on causes as to be misleading.

[Wick Welker · Rating 3 out of 5]

Pretty run of the mill, broad scope, economics book. If you're familiar with economic theory and history, there is nothing new for you here. If you aren't, this is a great place to start. I found this not really to be an analysis but a recitation of how economic theory has changed over the last 500 years and how it molds, and is molded by, politics and society. Not a thought provoking read for me.

A much better and more granular version of this book would be Mariana Mazzucato's The Value of Everything

https://www.goodreads.com/book/show/2...

[Vicki Hodder · Rating 3 out of 5]

It was very readable, collecting and connecting a lot of interesting facts and encouraging readers to look at history more holistically and just differently. The chapter on the Industrial Revolution in particular pulled together several interlocking revolutions in a really engaging way.
But because it covered and pulled in so much, it was the type of book that (for me, at least) requires you to continually refer back to previous pages to keep it all straight. Not to mention retention issues, with all the myriad facts tossed around.

[Travis · Rating 4 out of 5]

Really enjoyed this short book that applies an economic lense to much of human history. The early chapters are especially good as the author covers historical topics such as the discovery of agriculture and the Industrial Revolution that are not standard fare in economics textbooks. The later chapters cover more familiar territory, eg. the aftermath of World War II, and are thus a bit less interesting if you have a background in the subject. Still, overall it’s a quick read sprinkled with interesting observations.

[Charlie Deichman-Caswell · Rating 3 out of 5]

Solid I guess. As a defense it’s strong and is very helpful for those with a limited understanding of economics. Generally was unconvinced by the whole “jobs for jobs sake” argument (see Bullshit Jobs). And concerning the take that economists were among the first to worry about exploitation and human rights violations by multinational corporations (unless I need to expand my view of what an economist is?). This book accurately explains the system we live in (and extra points for the bit about Trump Tariffs. Very relevant) but leaves very little room for imagination. Aside from a small mention of the !Kung there is very little discussion of alternative forms of exchange. Instead, it generally lends itself to a linear idea of economic evolution. Sociologists have shown why this is flawed.
Still, as decent of a book as most “short history of humanity” titles are.

[E · Rating 5 out of 5]

I really enjoyed reading this book. Leigh covers a lot of information in this book, breaking it down in simple terms. I was astounded that in just two pages Leigh explains the 2008 housing crisis in the most accessible way I have ever read.
I would absolutely recommend this as an economics primer or to somebody wanting a refresh.
Thank you to Netgalley and the publisher for an advanced readers copy.

[Henry Ogilby · Rating 4 out of 5]

Good, fast, and easy read. Covers a lot of business school topics in a non quantitative way. I found it more of a crash course on econ and politics, which is very much in my readong wheelhouse at the moment. I found the book a little introductory and high level, but it was both fast and engaging, so I sped through. Interesting that Leigh writes about comparative advantage in trade, yet my previous read, Zeihan's The End of the World is Just the Beginning, did not!

[Seamus Buckley · Rating 3 out of 5]

3.5

Very solid and easy to digest

[Julie Longfritz · Rating 4 out of 5]

Easy to understand, interesting, and less than 200 pages

[Stijn De Waele · Rating 3 out of 5]

Accessible, tilted towards a positive assessment of modern history

[Monique Miquel · Rating 5 out of 5]

Super easy to read and interesting books about how economics has shaped human history!! Love it and would definitely recommend to anyone it’s a fun way to get you thinking about how the world works

[Kieren McConville · Rating 5 out of 5]

Simple but learnt lots!

[Dayna Dueck · Rating 5 out of 5]

Loved everything about this

[Navin Valrani · Rating 5 out of 5]

This book should be mandatory reading for every Economics high school student and an Econ junkie like me. A quick synopsis of the importance of the subject written in a way that makes reading Econ fun! Learned a great deal including:

1. The oldest ploughed field is attributed to Kalinngan in India.
2. Low labour costs remain a curse for technological innovation.
3. The word money comes from moneta (from the Romans).
4. Highest levels of social mobility are in Scandinavia.
5. The modern mirror laid the foundation for a more self-centred world that helped fuel capitalism.
6. Education must move at the same pace or faster than technology to reduce inequality.
7. High quality early childhood education makes a difference for disadvantaged preschoolers.

And much more!!!

[Sekar Writes · Rating 3 out of 5]

Economics might seem dry at first glance, but How Economics Explains the World by Andrew Leigh brings it to life in a way that feels deeply personal and relatable. Leigh focuses on people: their choices, challenges, and the ways their decisions shape history.

Through engaging storytelling, Leigh unpacks the rise of capitalism, introduces the key thinkers behind economic theories, and connects their ideas to pivotal events in history. From wars to social change and even religious movements, Leigh reveals how economic forces have quietly shaped the world.

By blending macro and micro perspectives, Leigh makes the complex both clear and fascinating.

[Me, My Shelf, & I · Rating 2 out of 5]

This was a bit of a mixed bag for me. The first chapter started out really really strong and interesting. There was a direct relationship between the subject matter and economics and how it's shaped culture.

But as the book wore on, there were a lot of moments that felt more like current events or history, and how it related to economics in particular was more tenuous. I also don't really agree with the author on a couple of points (like that it's good/natural for humans to derive their identity from their job) and it kinda speaks to his upbringing and privilege. eg Grocery clerks and janitors are essential jobs, but I don't think they're the kind of identity/purpose he's talking about.

Though I at least appreciate that he mentioned alternate schools of thought and clarified that it's just his opinions and not necessarily the position supported by studies, I also don't think a non-fiction is really the right place for those discussions.

...I'm honestly tempted to even lower my rating to two stars, based on this segment at the end:

Pinker notes that, due to better diets and more schooling, IQ scores have risen so rapidly that the average person today would score better than 98 per cent of the population a century ago. The odds of a typical European being murdered are less than one-tenth of what they would have been 500 years ago. Across the globe, attitudes on gender, race and sexuality have become more progressive, such that young Middle Eastern Muslims are about as tolerant as young Western Europeans were in the 1960s.

1. That's literally not how IQ tests work, my dude. I get what you're trying to say, but that's absolutely not the way to say it.
2. Holy racism, Batman! Big big yikes here.

Thank you to Mariner Books and NetGalley for the arc. All thoughts and opinions are my own.

[Manish · Rating 5 out of 5]

The fundamental concepts of economics that drive much of the economics thinking
Incentives: why people do the things that they do
Specialization: e.g., i can do haircuts, write software, cut grass, etc. given sufficient time to learn. But that is not best use of my time.
Big changes are not caused by changes in norms/culture but instead by changes in tech or policies. E.g., world trade increased because over successive years, countries developed policies encouraging global trade
Indus valley civilization (3000 - 1300 BCE)
The reason why there are no big monuments that survive in this civilization is because the society was highly equal. Meaning that there was no one who was king/super powerful who could command excessive wealth and then force people to make big monuments (E.g., egyptian or mayan pyramids)
Earliest example of farming is from indus valley
Eurasia is broad (east-west) and therefore has similar weather. Animals could be easily tamed - e.g., sheep, cows. And this encouraged people to travel within the continent, grow farming and grow wealth. Which is why eurasia became the conqueror and africa/americas became the conquered - because to conquer one needs wealth which increases when you have more land. In contrast americas and africa are narrow but long (north-south) therefore different weather, and animals that were harder to tame - kangaroos and zebra
Religion
Competition is good for consumers. And intense competition gave rise to 3 abrahmic religions - judaism, christianity, islam
It is beneficial for religions to enforce some strict requirements (about eating, drinking, etc) because this increases the price of converts so that they can not get the benefits of the religion without paying a cost
The world is expected to become more religious because religious people have more children
Religions with relaxed practices have more lapsed members where as religions with stricter practices have more engaged members. Conservative religions have more children and therefore the world is going to become more and more towards these strict religions (islam, catholics)
People can be conceptualists or experimentalists. Conceptualists do most of their good work at a young age because of a concept they had. E.g, picasso in painting, herman melville in writing or orson welles in movies. Experimentalists do much of their good work at a later age because they learn from experience and are constantly improving on it. E.g., rembrandt in painting, charles dickens in writing and clint eastwood in movies
In 1921, a black economist Sadie Alexander, said that in difficult economic times conservative, right-wing politicians win. This is because the black worker is the last to be hired and the first to be fired. Hence during difficult times, when there are fewer jobs than the population needs, the whites feel that they are competing with blacks - and therefore vote for right-wing politicians
Before wwii most people in most countries did not pay taxes. But after wwii people wanted some safety net. And to provide this safety net, income taxes got instituted
If education stagnates while tech advances society becomes more unequal and vice versal
If return on capital ( r) is greater than economic growth then inequality increases (thomas picketty)
Given the demand for a safety net after wwii, and the understanding that countries would be better placed if they worked together, Roosevelt did Bretton Woods where tariffs across countries were eliminated. This rose income levels across most countries. And given the demand for safety net income tax on highest earners increased (as high as 70%). And many companies were taken over by the government with the thinking that certain sectors should really be owned by the gov
In 1980s, Regan and Thatcher, did the opposite to reduce taxes. Wave of privatisation happened, income taxes were reduced, competitive laws were relaxed - both of them were inspired by Milton Freedman (UChicago professor)

[Michael Johnston · Rating 3 out of 5]

Informative and interesting, How Economics Explains the World attempts to touch on the importance of economics to most of what we think of as modern civilization. In particular, Leigh focuses on the great economic revolutions in history and the impact of free market economies on the advance of human wellbeing.

Speaking of the Industrial revolution, Leigh notes that in the sweep of human history, rising living standards are a fairly new event. For example, he cites an economic historian who noted that "in the 1700s most of the world's population lived lives that were no better than their ancestors' on the Africa savannah." But "all that changed with the industrial revolution. Since then, life expectancy at birth has doubled, real incomes have increased fourteen-fold, and average heights have increased by around 10 centimetres (4 inches)." He goes on to underscore the significance of free market economies saying, "more than two centuries on, the evidence is clear: living standards are higher in market economies than controlled economies."

All is not puppy dogs and rainbows, however, as he acknowledges significant economic externalities (pollution, climate change, the wealth gap, etc.) that reflect market failures and the need for government intervention to assist in curing those failures. He also points out that despite our current lack of trust in government, "major technological breakthroughs have often come when governments have invested in technological 'missions' - such as the landing on the Moon or building the internet."

Leigh also has some thoughts on our current moment and our penchant as humans to over-weight our own times in our perception of progress. Most of us are familiar with the pace of news online, in daily newspapers, or even in our weekly local news sources. "But what if we had a newspaper that came out every fifty years?", Leigh asks. Other economic historians have asked this question, and their answer is that "such a newspaper would be far more likely to discuss longer-term positive trends. Instead of celebrity gossip, the front page of a fifty-year newspaper today might report on the global child mortality rate dropping from 14 per cent to 4 per percent, or the fact that services employment now constitutes a majority of all jobs worldwide."

Leigh concludes by noting that his book tells "both sides of the story - how open markets have brought millions out of poverty, and why it is essential to address market failures for economies to prosper."

How Economics Explains the World is an interesting review of some of the most significant economic developments in human history and how they have impacted global wellbeing and progress. But ultimately, it tries to cover too much history and too many implications for it to be fully comprehensive. Interesting, but perhaps not really a compelling read.

[Sarah Cupitt · Rating 3 out of 5]

Went a little over my head considering I was talking to family about finances at the same time

Notes:
- answers lie in the interplay of geography, resources and human ingenuity
- geographic advantage helps explain why Eurasian societies developed faster and eventually colonised other parts of the world
- By the year 1000 CE, China's average daily income surpassed that of England, underscoring the transformative power of infrastructure in shaping a prosperous society. On a global scale, other advances in maritime technology slowly began to revolutionise trade and exploration as well. The Age of Sale led to groundbreaking expeditions by explorers like Christopher Columbus and Vasco da Gama, kick-starting the exchange of crops, animals, and sadly, diseases between the old and new worlds. These developments facilitated unprecedented growth in international commerce but also had dark consequences, like the rise of European colonialism and the Atlantic slave trade. Coastal cities like Lisbon, Alexandria, and Athens flourished as financial hubs
- Innovations in risk-sharing, such as Venice's Colaganza system, allowed poorer merchants to participate in sea voyages
- After World War I, Germany faced crippling hyperinflation as it struggled to pay massive war reparations, contributing to the conditions that led to the rise of Hitler. Globally, the 1920s had brought prosperity to many, but this boom ended abruptly with the stock market crash of 1929, sparking the Great Depression.
- Many countries were grappling with hyperinflation, prices were spiralling out of control in places like Hungary, Argentina and Zimbabwe, to the point where ATMs couldn't handle the number of zeros. To combat this chaos, a new approach emerged – inflation targeting. New Zealand led the way in 1990, mandating its central bank to keep inflation between zero and two percent. It was like giving the economy a thermostat, allowing central bankers to adjust interest rates and maintain stability.
- Economics has helped us understand how specialization and trade can drive prosperity, how technology sparks revolutions in economic activity, and how market forces can simultaneously generate wealth and deepen inequality.
- It helps us grasp the importance of pricing carbon emissions, investing in ethical AI, and fostering global cooperation to mitigate existential risks. On a more everyday level, economics offers insights into ongoing issues like traffic congestion and recurring economic crises, while also providing frameworks for personal decision-making by encouraging us to weigh opportunity costs and marginal benefits

[George Benaroya · Rating 5 out of 5]

Embark on a fascinating journey through the economic milestones of the 20th century with Andrew Leigh's masterful work. This book offers a comprehensive and engaging exploration of pivotal events, influential figures, and transformative policies that shaped the modern economic landscape.

Key Features:

Vivid accounts of historical events, from J.P. Morgan's 1907 banking crisis intervention to China's economic reforms in the 1980s

Insightful analyses of technological innovations, including Ford's assembly line and the standardization of shipping containers

Fascinating profiles of economic titans like John Maynard Keynes and visionaries such as Ray Kroc of McDonald's

In-depth examinations of economic phenomena, including hyperinflation in post-WWI Germany and the 1929 US stock market crash

Exploration of major policy shifts, from the Bretton Woods Agreement to Reagan's tax cuts

This meticulously researched book seamlessly weaves together economic theory, historical narrative, and human interest stories. Leigh offers readers a nuanced understanding of how economic forces have shaped our world, from the rise of central banks to the impact of globalization.

Highlights
The Power of Innovation: Learn how Ford's assembly line revolutionized manufacturing and made cars accessible to the masses

Economic Crises and Solutions: Explore the causes and consequences of major economic upheavals, from the 1907 banking collapse to the Great Depression

Global Economic Shifts: Understand the formation of international economic institutions and their impact on world trade

Social and Cultural Impact: Discover how economic policies affected everything from drug use to popular music

Perfect for economics students, history enthusiasts, and anyone interested in understanding the forces that drive our modern economy. Andrew Leigh's five-star read will leave you with a deeper appreciation of the complex interplay between economics, politics, and society throughout the 20th century.