Book Review—Permacrisis—A Plan to Fix a Fractured World

By Steven Kamin

AEI scholar Steven Kamin reviews “Permacrisis— A Plan to Fix a Fractured World”, by Gordon Brown, Mohamed A. El-Erian, and Michael Spence, pub. Simon and Schuster, 2023.

In a section of its introduction titled “Our Manifesto,” Permacrisis—A Plan to fix a Fractured World asks us to “imagine a world in which high growth and prosperity are not just durable but also inclusive and environmentally responsible. Imagine a world in which leaders have a good understanding of where the economy is heading. Imagine a world in which policymakers domestically and globally co-ordinate well with each other…That can be our world.” Sound impossibly ambitious? It is! But before putting the book back on the remainders table at Barnes & Noble, notice the authors: Gordon Brown, former finance minister and then Prime Minister of the United Kingdom; Mohamed El-Erian, President of Queen’s College, Cambridge, former CEO of PIMCO, and established authority on all things macroeconomic and financial; and Michael Spence, winner of both the Nobel Prize and John Bates Clark Medal for his pioneering research into markets, competition, and economic growth. If these three intellectual powerhouses claim to have discovered the cure for the many afflictions that ail us, maybe that book is worth a second look? Well, I’ve now read the whole thing, and my advice to the reader is: lower your expectations! You will doubtless learn a thing or two, as the book covers a wide array of topics ranging from global economic growth to Federal Reserve policy to international financial institutions to climate change. But you will be little wiser about how to fix our fractured world than you were when you first walked into the bookstore.

At the outset, Brown, El-Erian, and Spence (BES) note that we are now living in an era of increasingly frequent and severe crises, citing Russia’s invasion of Ukraine, the widening rift between the US and China, soaring inflation, skyrocketing energy prices, increasing inequality, and accelerating climate change. Whether this qualifies as a “permacrisis,” and whether recent global developments are really more tumultuous and dangerous than in previous decades, is a point on which reasonable people could differ. But we can probably all agree that prospects for the global economy are not all that rosy and that, as policymakers like to say, “the risks are to the downside.”

In particular, the authors identify three key challenges to the prosperity and stability of the global economy. The first of these is the need to boost economic growth. As Fig.1 below makes clear, whether global growth is actually declining or not is a bit murky, and it depends on what period you look at. So I’m not sure weak growth counts as a “permacrisis,” but I’m happy to agree with BES that faster growth would be better than slower—it means higher standards of living, more people pulled out of poverty, fewer distributional conflicts, and more resources to devote to common problems such as combatting climate change.

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