Chicago’s Rajan Wins $47,500 FT/Goldman Prize for ‘Fault Lines’
Raghuram G. Rajan’s “Fault Lines,” a look at why the financial order is prone to blowing bubbles, won the Financial Times and Goldman Sachs Business Book of the Year Award, defeating Andrew Ross Sorkin and other authors on the financial crisis.
Rajan, a former International Monetary Fund chief economist who teaches at the University of Chicago, overcame competition from Sorkin’s “Too Big to Fail,” Michael Lewis’s “The Big Short” and other finalists to claim the award of 30,000 pounds ($47,414) during a dinner last night at the Pierre hotel in Manhattan.
“This is totally unexpected,” Rajan said in accepting the award. “As I was leaving the house tonight, my wife told me to remember to smile when the winner is announced.”
Books on the crisis were so prevalent in this year’s contest that Lloyd C. Blankfein, the chief executive of Goldman Sachs Group Inc., recused himself from the judging process for the first time since the prize was inaugurated in 2005.
Rajan, who predicted the crisis two years before it hit, says in “Fault Lines” (Princeton) that it’s tempting to pin the blame on bankers, governments and homebuyers. Yet these individuals, for all their shortcomings, were only responding to three fault lines, he argues: domestic political pressures, trade imbalances and incompatible financial systems. The fractures continue to threaten the world economy, he says, meaning “we risk going from bubble to bubble.”
“A book is always a complex product of many efforts,” he said last night. “My years at Chicago made me what I am.”
Each of the five other finalists received a prize of 10,000 pounds ($15,800), up from 5,000 pounds in previous years. They included Sorkin’s “Too Big to Fail” (Allen Lane/Viking), a fly-on-the-wall account of how Wall Street and Washington struggled to save the financial system, and Lewis’s “The Big Short” (Allen Lane/Norton), a look at a loner with a glass eye and other outliers who shorted the subprime market.
The other finalists were Sheena Iyengar’s “The Art of Choosing” (Little, Brown/Twelve), in which the Columbia University professor explores how humans make choices; David Kirkpatrick’s “The Facebook Effect” (Simon & Schuster), an absorbing account of how Mark Zuckerberg built the social- networking website; and Sebastian Mallaby’s “More Money Than God” (Bloomsbury/Penguin Press), a storied history of hedge- fund luminaries from Alfred Winslow Jones to Ken Griffin.
The contest is meant to highlight books that offer “the most compelling and enjoyable insight into modern business issues.”
‘Lords of Finance’
This year’s judges were Lionel Barber, editor of the Financial Times; Liaquat Ahamed, author of last year’s winning book, “Lords of Finance”; Helen Alexander, president of the Confederation of British Industry; Lynda Gratton, a professor at London Business School; Mario Monti, the former European Union competition commissioner; Jorma Ollila, chairman of Nokia Oyj; and Shriti Vadera, a former U.K. business minister who quit to advise South Korea on its presidency of the Group of 20 nations.
To contact the editor responsible for this story: Mark Beech at firstname.lastname@example.org.