by James K. Galbraith ‧ RELEASE DATE: Aug. 25, 1998
A tour de force by an economist not so handicapped by theoretical orthodoxy that clear thinking is impossible. Economist Galbraith's (Univ. of Texas, Austin) central concern is America's growing inequality. He begins by debunking conventional explanations that employ market theories to dismiss inequality as a function of technological innovation. Economists need to believe that supply and demand control a labor market that is ultimately beneficial if their theories are to remain unquestioned, but Galbraith demonstrates what everyone else already knows: Inequality is rooted in public policies. Given that inequality is mutable, the relevant concern is to identify its cause. An extensive analysis points to unemployment as the culprit, and inequality began its rise as economists and government began to give up on full employment as a policy goal. Galbraith concludes that the ""real evil of our time"" is the association of inequality with conscious decisions, such as tolerating unemployment; the question, then, is what policies to change. At the core of the contemporary less-than-full-employment strategy, Galbraith argues, is the Federal Reserve's anti-inflation campaign. While many commitments are necessary to maintain full employment, maintenance of low, stable interest rates is fundamental, and as long as the Fed sees interest rates as a weapon in the war against inflation, full employment will be sacrificed. There is no doubt where Galbraith's prejudices lie--he sees the Fed as ""the most ridiculous of all government agencies, the platypus of institutions""--but it also seems undeniable that the Fed's actions have fed inequality. For Galbraith, the classical economics that underlies contemporary policy is only relevant once full employment is obtained; otherwise, market explanations constitute a self-interested (for those who benefit) or self-delusional (for those who theorize) walk through fantasy land with horrific consequences for the majority of people who live in the real world. Sophisticated but accessible and powerful arguments for the open-minded.
Pub Date: Aug. 25, 1998
Page Count: 368
Publisher: Free Press
Review Posted Online: N/A
Kirkus Reviews Issue: July 1, 1998
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