THE POWER ECONOMY: Building An Economy That Works by John Oliver Wilson

THE POWER ECONOMY: Building An Economy That Works

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You've read about the power lunch and the power office; now get ready for the ""power economy."" Unfortunately, it never really becomes clear what Wilson means by his coined term. Wilson, chief economist of Bank of America, here analyzes the economic policies of five major nations and offers several remedies for global economic problems. However, those who know anything at all about the countries and issues covered in this book won't find anything new. Indeed, The Power Economy is a catechism of centrist economics, a gospel of conventional wisdom and ""correct"" responses to the excesses of the left and right. Wilson devotes much of his book to reviewing the recent economic policies of the five countries that account for nearly half of the world's production of goods and services: the U.S., Japan, West Germany, Great Britain, and France. He notes that the Keynesian policy consensus which they came to share in the 1960s was undone in the '70s. The dramatic rise in energy prices resulted in massive financial imbalances and a slowdown in global economic growth, world trade, and employment. Wilson says the five nations went off on separate economic experiments, a diversity that was a ""unique event in modern world history."" But such diversity doesn't seem new. Moreover, it's clear that Ronald Reagan's supply-side economics, Margaret Thatcher's monetarism, and Francois Mitterand's socialism are departures from what preceded them. The West Germany's free-market welfare state and Japan's focus on export markets just represent extensions of earlier policies. Moreover, Wilson doesn't emphasize the common elements. Following an early dose of nationalization, Mitterand has ended up pursuing a form of socialist realism that resembles efforts in the U.S., U.K., and West Germany to limit welfare expenditures, stimulate business innovation, and improve trade balances. Wilson devotes an entire chapter to industrial policy, too much to a pass, issue in this country. And he concludes that the focus of this policy should be strengthening this country's comparative advantage--its flexible, innovative, entrepreneurial populace, no surprise that. Thus he's against protectionism and narrow nationalistic policies, too. If the big five economic powers would only work together, he argues, the results would be a better world for all. He makes a good case, but so have others.

Pub Date: May 15th, 1985
Publisher: Little, Brown