Next book

CREATED UNEQUAL

THE HIDDEN FORCES BEHIND THE CRISIS IN AMERICAN PAY

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

ISBN: 0-684-84988-7

Page Count: 368

Publisher: Free Press

Review Posted Online: May 19, 2010

Kirkus Reviews Issue: June 1, 1998

Next book

GOOD ECONOMICS FOR HARD TIMES

Occasionally wonky but overall a good case for how the dismal science can make the world less—well, dismal.

“Quality of life means more than just consumption”: Two MIT economists urge that a smarter, more politically aware economics be brought to bear on social issues.

It’s no secret, write Banerjee and Duflo (co-authors: Poor Economics: A Radical Rethinking of the Way To Fight Global Poverty, 2011), that “we seem to have fallen on hard times.” Immigration, trade, inequality, and taxation problems present themselves daily, and they seem to be intractable. Economics can be put to use in figuring out these big-issue questions. Data can be adduced, for example, to answer the question of whether immigration tends to suppress wages. The answer: “There is no evidence low-skilled migration to rich countries drives wage and employment down for the natives.” In fact, it opens up opportunities for those natives by freeing them to look for better work. The problem becomes thornier when it comes to the matter of free trade; as the authors observe, “left-behind people live in left-behind places,” which explains why regional poverty descended on Appalachia when so many manufacturing jobs left for China in the age of globalism, leaving behind not just left-behind people but also people ripe for exploitation by nationalist politicians. The authors add, interestingly, that the same thing occurred in parts of Germany, Spain, and Norway that fell victim to the “China shock.” In what they call a “slightly technical aside,” they build a case for addressing trade issues not with trade wars but with consumption taxes: “It makes no sense to ask agricultural workers to lose their jobs just so steelworkers can keep theirs, which is what tariffs accomplish.” Policymakers might want to consider such counsel, especially when it is coupled with the observation that free trade benefits workers in poor countries but punishes workers in rich ones.

Occasionally wonky but overall a good case for how the dismal science can make the world less—well, dismal.

Pub Date: Nov. 12, 2019

ISBN: 978-1-61039-950-0

Page Count: 432

Publisher: PublicAffairs

Review Posted Online: Aug. 28, 2019

Kirkus Reviews Issue: Sept. 15, 2019

Next book

THE NEW GEOGRAPHY OF JOBS

A welcome contribution from a newcomer who provides both a different view and balance in addressing one of the country's...

A fresh, provocative analysis of the debate on education and employment.

Up-and-coming economist Moretti (Economics/Univ. of California, Berkeley) takes issue with the “[w]idespread misconception…that the problem of inequality in the United States is all about the gap between the top one percent and the remaining 99 percent.” The most important aspect of inequality today, he writes, is the widening gap between the 45 million workers with college degrees and the 80 million without—a difference he claims affects every area of peoples' lives. The college-educated part of the population underpins the growth of America's economy of innovation in life sciences, information technology, media and other areas of globally leading research work. Moretti studies the relationship among geographic concentration, innovation and workplace education levels to identify the direct and indirect benefits. He shows that this clustering favors the promotion of self-feeding processes of growth, directly affecting wage levels, both in the innovative industries as well as the sectors that service them. Indirect benefits also accrue from knowledge and other spillovers, which accompany clustering in innovation hubs. Moretti presents research-based evidence supporting his view that the public and private economic benefits of education and research are such that increased federal subsidies would more than pay for themselves. The author fears the development of geographic segregation and Balkanization along education lines if these issues of long-term economic benefits are left inadequately addressed.

A welcome contribution from a newcomer who provides both a different view and balance in addressing one of the country's more profound problems.

Pub Date: May 5, 2012

ISBN: 978-0-547-75011-8

Page Count: 304

Publisher: Houghton Mifflin Harcourt

Review Posted Online: April 3, 2012

Kirkus Reviews Issue: April 15, 2012

Close Quickview