The argument of this book can be summarised as follows. Western Nations are growing much less quickly than many in Asia and especially China. Western nations are at risk of losing their influence in global affairs. Further, the slowness of growth in Western nations threatens their own social and political arrangements.

To increase their growth rates, Western nations need to increase investment to a level similar to that in Asia and especially China. Further, investment should be concentrated in activities that are more likely to increase productivity greatly. These activities are “clustered round mechanisation, the application of technology and the use of power” (p.9). This investment needs to be complimented by policies that ensure Western nations’ exports, especially of physical goods, are competitive in global markets. It is argued that the exchange rate of many Western nations is too high, especially when compared with currencies from Asian countries, reducing their competitiveness. As a result, central banks in Western nations would “need to change [their] principal objectives away from keeping the inflation rate close to 2% to maintaining an exchange rate target” (p.177). Capital controls are also suggested used to discourage incoming capital “especially if what is involved is the acquisition of existing assets rather than financing of new productive capacity”. A withholding tax on the dividends and income received by non-residents should also be imposed. (p. 176).

The observation made in the book about the relative growth rate of Western economics and those in Asia, especially China, have been made before. However, when it comes to China in particular, the prospect of growth continuing at rates achieved over the past 20 to 30 years is now being questioned by many. In that sense, the immediate fears expressed in the title of the book seem over stated. Furthermore, I suspect many would disagree with the particular policy prescriptions made in the book. For example, is the call for a change in central bank objectives a recommendation for exchange rate targets and therefore the emasculation of monetary policy? My reading of the proposition is that this would be needed but this is not stated explicitly. But let’s step back a little and take a broader perspective.

Arguably, the book’s more interesting aspect is its concentration on growth. In this, there is a commonality with ex UK Prime Minister Liz Truss’s speech to the Conservative Party conference in October 2022 stating “I have three priorities for our economy: growth, growth and growth.”

Despite the poorly devised and short-lived growth agenda of the Truss administration, the need to increase the rate of growth in Western countries should not be under-estimated. It is important in maintaining economic and social stability. Alessio Terzi’s2022 book “Growth for Good” covers this issue well.

The author of this book seems to recognise this and makes the following comment in the first chapter “Although, expanding output at a reasonable rate is clearly a central policy goal for almost all governments, regardless of their political hue, economics as an intellectual discipline has never been as seriously oriented towards explaining what produces increased output as it has towards other matters, particularly how resources are allocated and existing output distributed, and how to control inflation and avoid unemployment. There is no generally accepted growth theory that explains how to get the growth rate up” (p. 14) I suspect many would splutter in disagreement with that comment. The sources of economic growth at the national level are regularly discussed and written about in intellectual discourse. For example, I plugged the term “economic growth” into the American Economic Association’s website, restricting the search to only the American Economic Review and only to titles in that publication, and 25 papers popped up. Much has been written in many countries and many journals about the productivity paradox, which is related to persistently slow economic growth. There is no shortage of academic work on the topic. In the UK, the LSE Growth Commission has written extensively on the topic. Nevertheless, I can understand the frustration of the book’s author if it can be interpreted as disappointment with the explanatory power of macroeconomics. He is not alone. Noah Smith’s 2022 Substack column “Macroeconomics is still in its infancy. A lot of ideas; not a lot of conclusions” written as recently as 8 November 2022 and Prof Diane Coyle’s 2021 book “Cogs and Monsters” both seem to express similar frustration.

This frustration and the alternative policies recommended may have something to do with the author’s background. John Mills is a highly successful entrepreneur. His website notes that he is “the founder and Chairman of JML, the consumer goods distribution company, which exports to more than 70 countries around the world. He is also an economist and author, noted for his writing on BREXIT, the Labour Party and exchange rate policy”. He is a practical and well informed person, not an academic. The book’s concentration on the need for increased investment, especially in certain industries, in Western countries is likely informed by his own experiences. Few, including those with an academic bent, would disagree with at least the need for both increased and more effective investment.

The policies suggested by Mr Mills may be controversial but not completely from left field. Michael Pettis has written extensively about the role of exchange rates in shaping economic growth at the national and international level in two of his books – “The Great Rebalancing” in 2013 and co-authored with Matthew Klein “Trade Wars are Class Wars” in 2020. Also remember that the US Treasury declared China a currency manipulator in 2019 but removed that designation in 2020. When it comes to capital controls, various countries have restrictions on capital mobility and take-over review boards regularly restrict the ability of foreign companies to buy domestic corporations and real estate.

As to encouraging investment in particular industries, this is a common approach by governments. It is also fraught with difficulty. Think of the troubled UK battery firm Britishvolt as a recent example. If Mr Mills is supporting the concept of a well-designed industrial policy and regional regeneration, he has plenty of support from governments in many countries. Economists – even of an academic bent - such as Mariana Mazzucato (Mission Economy) and Eric Lonergan and Corinne Sawers (Supercharge Me) would seem to be in agreement with him.

Where I consider Mr Mills falls short in his exposition, at least from a UK perspective, is that he does not mention the role of excessive financialisation in limiting and distorting investment opportunities. This is well covered by Andrew Smithers in his 2019 book “Productivity and the Bonus Culture”. Arguably, there is also a case for a government backed British Investment Bank to make finance more readily available for those companies that will provide the type investment Mr Mills believes will increase growth. Indeed, such a government-backed development bank has been proposed in the past. The call Mr Mills makes for increased investment in particular industries may well happen in the future but his views on exchange rate management are less likely to find favour.