BOOK OF THE DAY: AftershockBy Philippe Legrain Little, Brown; 436pp, £12.99

A USEFUL way of proofing a book for accuracy is to check out what it has to say about a subject with which one is familiar. Philippe Legrain's Aftershock, a comprehensive survey of the state of the world economy, contains 23 page references to Ireland, which makes this type of proofing exercise easy for an Irish reader.

The result? Legrain passes with flying colours. His treatment of Ireland relies on facts, avoids exaggeration (though who needs to exaggerate the performance of a country where the jobless rate has almost trebled and the government budget has moved from surplus to a 14.3 per cent of GDP deficit in three years?) and reveals a sound understanding of the economy’s dynamics and policy context.

The opening chapters examine the causes and consequences of the international financial crisis and, as such, cover ground that is depressingly familiar. They do so in an accessible way, however, which commends the book to the general reader. Legrain moves quickly from analysis to prescription: he is principally concerned with proposals for reshaping the international financial system and reducing the risk of future crises. He argues for selective reintroduction of capital controls, strengthening of the IMF, and introduction of more regional currencies. He is an unapologetic fan of the euro.

The tone of the book is optimistic. Legrain strongly believes in the transformative power of globalisation. He has great faith in the impetus given to innovation and enterprise by cultural diversity, and devotes a long chapter to an analysis of the new patterns of international migration, threaded through with anecdotal evidence drawn from interviews with migrants.

He is in awe of the potential for enhanced living standards in China and India. He paints a picture of these huge economies providing the locomotive of growth for the West in the years ahead through their demand for imports, and cites Peter Mandelson’s arresting quotation of a 19th century source: “If everyone in China lengthened their shirt tails by a foot, the textile mills of England would spin for a year.”

A real threat to this scenario is that governments succumb to protectionist instincts. Instead, they should adopt policies that promote adaptability in their economies and workforces. This is not just a matter of making it easy for firms to hire and fire; it also requires that workers have access to educational and training programmes, and enjoy reasonable levels of replacement income when they’re between jobs. Legrain sees the Danish “flexicurity” system as having much to commend it.

A key argument is that keeping markets open is an objective most likely to be achieved if workers exposed to international competition feel less insecure about their living standards. So, the relatively parsimonious US welfare system may be viewed as a threat to free trade.

Legrain rejects the notion that the crisis marks the return of big government, but also the notion that, pre-crisis, the world had moved to some kind of neoliberal monolith. He says the idea that countries are being forced to converge on a single economic model is flawed: globalisation need not threaten the European-style welfare state.

This is a book that is big in its breadth of content and vision, and refreshingly hopeful about the possibility of harnessing globalisation to the betterment of all mankind.

Jim O’Leary is a senior fellow of the department of economics, finance and accounting at NUI Maynooth