129 of 149 people found the following review helpful:
5.0 out of 5 stars
All men are created equal, October 9, 2008
I must say that this book turned what I believe about the economy on its head, but it also enlightened me about how the economy is connected to fairness and equality. I used to think that our biggest problem was deficit spending, but now I see the biggest problem is fairness. Galbraith, who is the son of the famous John K. Galbraith who wrote The Modern Industrial State, which I read 40 years ago and gave me my first insights into how the economy works, describes how inequity in wages has distorted the market and created an environment not unlike Alice in Wonderland where people disenfranchise themselves by believing that free markets are somehow all-seeing and lead to the greatest possible good. Galbraith makes a case against this hands-off approach to markets and argues that unregulated markets will lurch from one bubble to the next. Crises like global warming will never be dealth with because there is no financial incentive to do so. Planning is the only thing that can save us and will have to involve a serious political battle because the corporations have saturated the media with the belief that the markets work best when left alone, which prescription leaves most of us on the bottom level of the next pyramid scheme while the corporate executives accumulate vast fortunes for themselves at our expense. The writing isn't bad, but it can be a bit hard to see what he's driving at at times. The resolutions he offers at the end make the read worth while. This book came out in Spring of 2008. Given the financial meltdown here in the Fall, the warnings in this book are eerily prescient.
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92 of 114 people found the following review helpful:
3.0 out of 5 stars
Interesting thesis, although not totally convincing, November 5, 2008
James Galbraith, this book's author, is the son of famous economist John Kenneth Galbraith. His father was an important figure in economics, with books such as "The New Industrial State" on his resume. I mention this since this volume mentions Galbraith pere approvingly on a number of occasions.
Galbraith begins by noting that our economic discussion is based on a fallacy--that free markets and competition govern our economic sphere. This idea is now the dominant view of how an economic system ought to function in the United States. He goes on to say that (Page xi): ". . .the doctrine serves as a kind of legitimation myth--something to be repeated to schoolchildren but hardly taken seriously by those on the inside." The guiding metaphor for this book, a predatory state, is outlined early on by Galbraith. He says that this refers to (Page xiii): "the systematic abuse of public institutions for private profit or, equivalently, the systematic undermining of public protections for the benefit of private clients."
He develops this thesis, beginning with a first chapter entitled "Whatever happened to the conservatives?" He begins by noting the elements of the Reagan revolution (or Reaganomics as it was then termed)--(1) tax reduction to trigger investment and economic growth; (2) tight money to halt the inflation that had sapped the energy of the economy; (3) deregulation and assaults on unions, to, once more, let market forces rule. He goes on to argue that, first, this perspective did NOT achieve what its supporters allege, and, second, that contemporary conservatives have in essence abandoned these principles to "take over" the government and use that power to enhance the interests of the moneyed and powerful class. As a result, Regan's vision has been replaced by "the predator state," which he defines as (Page 131) ". . .a coalition of relentless opponents of the regulatory framework on which public purpose depends, with enterprises whose major lines of business compete with or encroach on the principle public functions of the enduring New Deal."
If that is the problem, what would the solution be? Galbraith suggests three components of addressing the predator state. One is to institute a system of planning, to think ahead and not depend on short term profit making motives of business enterprises. Another is for government to become more involved in setting wages and ensuring a more equal distribution of pay and income (his argument is that there is no evidence that letting wealthy people get wealthier has positive economic benefits). Three, the United States is part of a world economy, and that should help to discipline and inform our policy.
His policy proposal? If you want higher wages, raise them? If you want better jobs--create them. If you want safer foods and cleaner air, mandate it. Don't depend on the market. Just do it. That won't sit well, of course, with those who advocate markets as the answer. But, then, by the terms of his argument, the market will not do that since it does not describe how things work. The final chapter examines how one might pay for his policy choices.
Plenty of examples are mentioned. This is a book that is not always clear in what it argues, although that is not a major problem. It does provoke reflection on how things work, and that is to the good. I must confess that I am not convinced by what are, generically, referred to as conspiracy theories, and this book has a flavor of a conspiracy at work. Nonetheless, in the aftermath of the economic troubles that have beset the United States and other countries, it is useful to examine alternate perspectives and see if they add anything of value to discourse.
3 1/2 stars. . . .
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88 of 112 people found the following review helpful:
5.0 out of 5 stars
I love this book, August 18, 2008
Searing insights into neoclassical economics (the academic standard),past conservative economic policies, and liberal acquiesence to the conservative mantra of free markets. This book is a must (so are all good commentaries)even for those that profess ignorance of economics in companionship with McCain. If you want to know why the U. S. is terribly awry and needs attention and sweat and great effort to come about to some semblance of normalcy but you didn't have the metaphors or knowledge to tackle the contortions of the past and present, read this even if you are not an economist. This is about the enslavement of our government to the will of the wealthy and the corporations and how and what can be done.
Most who pay attention know this, but do they understand it quite as well as elucidated by this great economist?
An long ago graduate in economics,and, institutional economist from, U. of Texas,Austin
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