From Publishers Weekly
Armed with vivid case studies and a populist axe to grind, Columbia economics professor Adler debunks the conventional economic wisdom that what's good for the rich and powerful is good for the economy through discussions of economic efficiency and how wages are determined. His main target is "the critical building block of modern economics"--Pareto efficiency--the theory that no one can be made better off without someone else being made worse off. Pareto efficiency balks at equitable resource allocation (especially from rich to poor); Adler argues that the model, carried to its extreme, proves that poor people should not be allowed to breathe clean air and that rich people pay far too many taxes, leading into a fascinating discussion of wage disparity. The claim that a person earns an amount determined by the value of what she produces is fundamentally flawed, he maintains, and the evidence shows that wages are determined by the powers a worker possesses--or does not possess--at the bargaining table. Adler's frustration with wrongheaded economic thinking is as entertaining as it is thought provoking.
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Academic Adler sets out to explain the key concepts and theories of mainstream economics and less-known alternatives. The book considers the two cornerstones of economics. One is economic efficiency and its definition, which at one time included distribution of income but now focuses upon free markets, ruling out government intervention to decrease inequality. The second cornerstone, what a worker earns, is not based on the value of an individual’s contribution to production, which the author contends is a flawed concept; wages are determined by the power workers possess or do not possess at the bargaining table, and Adler points to CEOs’ obscene compensation, which he concludes is awarded because they work for shareholders who are too numerous and lack control. Everyone will not agree with the author, but he makes thoughtful arguments intended for educated readers who are not schooled in economics. --Mary Whaley