Shutdown

Shutdown is a history of the world macroeconomic response to COVID-19, covering 2020 and the very beginning of 2021.

But wait, you might be saying. It's only the end of 2022 right now, and this book was published in September of 2021. That's not history, that's journalism. And yes, I think that's a valid critique. Shutdown is doing something rather odd, and I'm not certain it was a good idea, but I do think it has a (somewhat narrow) audience.

Descriptions first. After an awkward introduction (more on that later), Tooze launches into an essentially chronological history in four parts: the initial viral spread and early political and public health response, the economic hard stop and macroeconomic response, the summer fallout and political complications, and the more-organized aftershocks of the fall. The early chapters are closer to a history, with a clear timeline and the tracery of cause and effect. The closer the narrative comes to the time Tooze was writing it, the more that clarity drops away. The last few chapters feel like a collection of simultaneous events that may or may not be related or have long-term significance.

Everyone reading this lived through those events, and if you're at all like me, consumed far more news coverage of them than was healthy. The obvious question, then, is why read a book that rehashes all of that? For me, there are two answers: Tooze pays attention to more of the world than makes it into the local headlines and tries to synthesize a larger picture, and the focus of this book is the macroeconomic facilities used in the response. I remember the fights over school closures in the US. I didn't know about the impact of unprecedented Federal Reserve action on the bond market for emerging market government debt.

If you're the sort of person who reads The Economist religiously (which I am not), you may not learn anything new here. If you're not, and you have a general interest in international finance, there were probably some wrinkles you missed. Even if you stay up-to-date on the more technical news, Shutdown provides an intermediate consolidation and restructuring. It's not ready to be a history in the traditional sense, but it's a first pass at putting events in order and tracing the implications for the global financial system.

Read in that sense, Shutdown felt like a continuation of Tooze's Crashed, following the same themes of a hegemonic but unstable dollar system and a Federal Reserve that has increasingly taken on the role of backstop to the entire world (and how the only tools it has available tend to increase wealth inequality). If you've not read Crashed, read it first. I think it's the stronger and more thorough book (not the least because it had more time and data to construct a coherent history), and it's the best introduction to the international macroeconomic risks that Tooze traces in Shutdown. This book was, for me, an update of the Tooze's thinking in Crashed for the COVID era.

Tooze is very good at clearly describing macroeconomic shocks. I recently read Lev Menand's The Fed Unbound, which is in part about the same intervention during the COVID shock that Tooze describes here, and yet it wasn't until I read Shutdown that I grasped that the Treasury purchases by the Fed had arguably crossed the political red line of monetizing government debt, even though the Fed probably had no choice and few people noticed in the middle of the crisis. This is where Tooze's background as a historian is helpful. Most people writing on this topic are either economists, who seem to take inferences like that for granted and dive into the technical debate, or journalists, who rarely understand the nuance and often jump to facile conclusions. Tooze is a historian with an extensive economics background; he can explain the mechanics while still focusing on the limitations of politics, which is the sort of analysis that I want to read.

The problem with this book as a history is that it necessarily raises more questions than it answers. In the conclusion, Tooze writes:

A severe tightening in U.S. monetary policy or even a full-fledged taper tantrum would put global resilience to a stern test. So too would a violent escalation of geopolitical tension in one of the major regions of the world economy.

Both of those events have subsequently happened, which throws any tentative conclusions Tooze can offer into question.

For another example, when Tooze wrote Shutdown, China's zero COVID policy was widely celebrated inside China and had enabled a fast economic recovery while the rest of the world was still in serious difficulty. Before Omicron, it was conceivable (if extremely risky) that China could continue to avoid a major COVID surge. In December of 2022, it's obvious they only managed to delay, and while delay meant vaccination and the price in deaths may well be smaller than was paid for the route taken by most of the rest of the world, the trade-offs are now even harder to analyze.

There are, of course, other examples, the most obvious of which is the rise of global inflation simultaneous with a strengthening dollar. A history written from a distance of several decades would have included that aftermath. A snap history with a distance of only a few months cannot.

The other problem with this book is that it's not as polished. Viking did an amazing job turning publication around in roughly six months, dramatically faster than publishing normally works, but there are parts that could have used more editing. The introduction, in particular, reads more like a blog post than an edited book, and while I'm a happy reader of Tooze's Chartbook, the recap of COVID's impact was a bit trite and Tooze's abstract musings on polycrisis could have used tightening and clarity. The meat of the book is better, but there is a messy stream-of-consciousness feel that is inherent in a book written to this tight of a timeline.

I think the audience of this book is, narrowly, people who have read Crashed and want to follow that line of reasoning into the COVID era. Crashed is one of the better books on macroeconomic history that I've read, and I did indeed want to follow that train of thought, so I am part of that audience. This is not the sort of book that I would widely recommend, however. If you want to read it, you probably know that already; if you are new to Tooze's analysis, Crashed is the place to start.

Rating: 7 out of 10

Reviewed: 2022-12-20