THE ZERO-SUM SOCIETY: Distribution and the Possibilities for Economic Change by Lester C. Thurow

THE ZERO-SUM SOCIETY: Distribution and the Possibilities for Economic Change

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With the economy beset by so many problems--energy, inflation, unemployment, etc.--it's not easy to find a single thread that ties it all together. MIT economist Thurow thinks that he has found it. For him, the fundamental problem is that the economy is a ""zero-sum"" game in which for every winner there must be a loser. To deal with these interrelated problems would thus require a consensus on what an equitable distribution of economic goods would be; and such a consensus does not exist in a society composed of special-interest groups. An example is inflation, where any effort to hold down wages and prices runs up against determined opposition from whatever group's income would be cut. Similarly, the effort to replace antiquated production modes is stifled by the demand to prop up incomes in that sector. In the face of such intractable problems, it isn't surprising that Thurow's solutions should come up a bit lame. He argues for an equity principle that recognizes that the ""game"" has worked best for white males; a fair distribution of income would then be one which projects the spread for white males across the board. Government should adjust transfer payments accordingly, and orient such payments away from groups and toward individuals. Antiquated ""sunset"" industries would not be propped up, for example; instead, Thurow would have the government generously support affected individuals while they make the transition to ""sunrise"" industries. Seeing workers as ""human capital,"" Thurow's plan fits into a view of government's role in investment like that of Japan. The elimination of interest groups between the government and the people also entails the strengthening of the party system along the lines of the British to ensure accountability, The trouble is, while British economic growth is better than it appears to be, no one would seriously argue that the British government is any more ""disinterested"" than ours. Thurow is right to point to the lack of consensus, but the causes go beyond narrow economics to include cultural and political factors he doesn't touch.

Pub Date: April 1st, 1980
Publisher: Basic Books