Balance: The Economics of Great Powers From Ancient Rome to Modern America

In This Review

Balance: The Economics of Great Powers from Ancient Rome to Modern America
by R. Glenn Hubbard and Tim Kane
Simon & Schuster, 2013
368 pp. $28.00
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Hubbard and Kane take readers on a rapid romp through imperial history, covering the Roman, Chinese, Spanish, Ottoman, Japanese, and British empires and finding the seeds of their failures in fiscal incontinence and the rise of loss-averse special interest groups. Historians often date the beginnings of imperial declines, identifying them with some external event, usually military in character. The authors argue persuasively that the decay typically starts long before such events and usually originates with some internal change. Against this background, they discuss the looming failures of Europe, the United States, and even California, the world’s tenth-largest economy. Their central thesis is that modern democracies have become dysfunctional and can be rectified only by changing the perverse incentives they create for politicians. (It is worth noting, of course, that their historical examples illustrate that dysfunction is hardly limited to democracies.) To accomplish this improvement in democratic governance, Hubbard and Kane propose eliminating safe electoral seats, abolishing term limits, and imposing tight fiscal rules on budgeting.