"THE WINNER-TAKEALL SOCIETY: How More and More Americans Compete for Ever Fewer and Bigger Rewards, Encouraging Economic Waste, Growing Income Inequality, and an Impoverished Cultured Life"

An unsettling report from two economists on how new competitive forces are impacting Americans' social, business, and ethical lives. According to the Frank (Cornell Univ.; Passions Within Reason, 1988) and Cook (Duke Univ.), winner-take-all markets have two major characteristics: reward by relative rather than absolute performance and concentration of rewards in the hands of few top performers. In other words, these markets have rewarded winners disproportionately compared with runners-up, despite sometimes infinitesimal differences in outcomes (e.g., although Mary Lou Retton won her Olympic gold medal by only a slim margin, she went on to years of Wheaties endorsements, while the name of her rival is barely recalled). Although there are some benefits to these markets, they have widened the gulf between rich and poor, channeled citizens away from their natural talents and into less socially beneficial but potentially lucrative tasks, and even led to greater concentration of the best students into elite institutions. In recent years, winner-take-all imperatives have spread from professional sports and the performing arts to other sectors of the economy, including publishing, where the midlist book is being crowded out at the expense of the next blockbuster; law and investment banking, fields that lure flocks of college graduates looking for fast lucre; and even management. Frank and Cook ably explain the forces (e.g., global competition and technology) that have upped the competitive ante and raised the stakes so much that contestants will continually strive to maintain an advantage. To their credit, the authors urge changes in reward structures rather than direct regulations of career choices, though some of their proposals (e.g., loser paying in tort cases) might worsen the growing inequality that they cite as a result of winner-take-all markets. A thoughtful analysis of how today's haves and have-nots got this way.