Book Reviews

Abstract

Bruno S. Sergi of University of Messina and Harvard University reviews “The Philosophy, Politics and Economics of Finance in the 21st Century: From Hubris to Disgrace”, by Patrick O'Sullivan, Nigel F. B. Allington, and Mark Esposito. The Econlit abstract of this book begins: “Twenty-four papers explore topics regarding the philosophy, politics, and economics of finance and present insights into the workings of contemporary finance and its regulation in the early twenty-first century. Papers discuss the nadir of 2008 and its aftermath; asset management—some considerations on performance; risk in the age of crises; financialization; whether Islamic finance is a complement to conventional western finance—underlying principles and viability; stakeholder expectation and its role in decision making in the financial sector; the impact of the subprime financial crisis on the Eastern European transition economies, and why Poland is an outlier; China as cause and victim of the US subprime crisis—the crisis and its impact on China and the Asian economies; default invariance—a naive category theory of law and finance; why Europe needs the liberal Keynes; neologism as theoretical innovation in economics—the case of “financialization”; ethics—from negative regulations to fidelity to the event; the bank, its societal functions, and its practices—conflictual relationships between an economic agent and democracy; the sufficiency economy—a Thai response to financial excesses; ethics should not cloud business or financial decisions—the enduring power of the neoclassical paradigm; regulation and fraud—a critical assessment of accounting information, corporate governance, and complex systems of business control; the psychology of unethical behavior in the finance industry; financial liberalism and new institutional environment—the 2007-08 financial crisis as a (de)regulatory deadlock; naturalizing techniques and naturalized discourses—thoughts on the media's role in the Great Recession; initially less obvious areas where financial interests and pressures are exercising a subtle and perhaps more ideologically charged influence on private or public policy choices; thinking well about financial ethics; developing country perspectives—a look at the Nigerian banking sector crisis; theological and historical perspectives on contemporary accounting; and where finance is headed and how finance and its role in the economy ought ideally to evolve.” O'Sullivan is Professor of Business Ethics and Corporate Social Responsibility at Grenoble École de Management and the University of Warsaw. Allington is Professor of Applied Macroeconomics at Grenoble École de Management and Fellow and Director of Studies in Economics in Downing College at the University of Cambridge. Esposito is Associate Professor of Business and Economics at Grenoble École de Management, a member of the teaching faculty at the Harvard University Extension School, and Senior Associate at the University of Cambridge-CISL.