Customer Reviews

The Zero-Sum Society: Distribution and the Possibilities for Economic Change

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This was one of the most readable non-fiction books I've ever come across. It's written in clear effective English and makes its point (mainly through repetition) very well.

Thurow has one basic idea - that the American economy was paralysed in the 1970s because of the variety of groups (upper-class versus lower-class, blacks versus whites, industrial versus agricultural etc.) with conflicting interests that made it impossible for the government to undertake effective policies. As such, this book seems pretty commonsensical and hardly revolutionary nor particularly enlightening. Thurow takes us through the various economic problems that the US faced at the time to show how this is the case.

This problem appears to be the combined flaw of democracy - that people have a say in how the country is run - although he didn't explore that; and capitalism - the doctrine of self-interest. The groups all want to protect themselves. This means that any change will inevitably be vetoed/subject to prolonged protest by at least one group - namely, the group that will have to suffer (by seeing their incomes decline) so that the rest of the economy can benefit. This shows up in the protection of inefficient industries such as steel and textiles, the unwillingness to impose strict income and price controls etc. In effect, the economy will continue to stay stagnant until certain groups are imposed on for the sake of everyone else.

He also makes the interesting case that inflation was not really a problem, backing this up with statistics that show that the average American's standard of living rose; and income differences didn't widen. Rather, it was a matter of perception and psychology.

Couldn't agree with the previous review. Even the title is wrong. The economy... any economy is NEVER a zero-sum game. Here is a quote from the author: "Can economic command significantly... accelerate the growth process? The remarkable performance of the Soviet Union suggests that it can... Today the Soviet Union is a country whose economic achievements bear comparison with those of the United States." That was in 1989, JUST BEFORE the Soviet system collapsed. How can anyone be more wrong? Unfortunately, these people teach our kids.

Having worked on Wall Street for 25 years, by and from experience I can assert that ANY economic behavior by any human does entail a marginal error toward/from the misinterpreted phrase "zero sum game.Simply research historic Federal Reserve monetary policy to understand this, let alone structured finance!

Prof. Thurow's point is that the US political economy, its citizens, and those "elites" who make its policy are asymetrically informed. Sooner or later, the US has to restructure its misapplication of redistributing wealth; hence the shock of the 70's, the long-term mess Regan has left; the stock bubble of the mid-90's; the current housing bubble. Another shock a la 1973 and 1978 might redirect this country's "elites'" thinking towards more long-term pragmatic lines.

This book was a sensation when it first appeared in 1980.
But then something unexpected (by Thurow at least) happened. Ronald Reagan was elected President and ignited a period of spectacular economic growth, coupled with low inflation and high employment, that lasted through the next two administrations - thus proving Thurow totally wrong!
Why do publishers keep reprinting books that have been invalidated by history? Why not allow then to sink silently into the dustbin of failed theories where they belong?
As Charlie Chan once said: Theory like mist on eyeglasses. Obscures facts.