Enter your mobile number below and we'll send you a link to download the free Kindle App. Then you can start reading Kindle books on your smartphone, tablet, or computer - no Kindle device required.
Getting the download link through email is temporarily not available. Please check back later.
To get the free app, enter your mobile phone number.
The Competition Solution: The Bipartisan Secret Behind American Prosperity Hardcover – January 1, 2005
About the Author
Top Customer Reviews
London argues that the increase in prosperity was caused far more by increased competition in private industry than by federal monetary or fiscal policies. It was not the Federal Reserve's monetary policy of the 1980s-1990s that killed inflation, but rather increased competition, which meant that companies were no longer free to indiscriminately raise prises. Likewise, it was increased competition rather than lower tax rates that forced existing companies to increase their investment in productivity-boosting capital. Higher living standards were the happy result for consumers, employees, and investors alike.
Most of London's evidence is anecdotal rather than empirical, but on the plus side this makes the book highly readable. An enthusiastic five stars.
These corporations used their might (along with union might and supportive governmental regulation) to fight off and restrict competition. Mr. London sees this weak competitive environment as one of the causes of the inflation during the seventies. He also faults Richard Nixon for his wage and price controls and political influence on the Federal Reserve. He gives great credit to Presidents Ford and Carter for having the political courage to fight inflation and to take painful steps to right the economic cart.
He notes that it was Carter, not Reagan, who put Volcker in charge of the Federal Reserve and deserves the credit for Volcker's success. Mr. London also expresses some skepticism in the monetary and tax cut approach to encouraging growth. He goes so far as to say that Greenspan's reputation is inflated because he had little to do with the success of the economy in the eighties and especially in the nineties. For Mr. London, it was the competition with the Japanese that forced the automotive companies to increase efficiency and hold prices down. It was small steel companies such as Nucor that saved the American Steel industry. He also notes that breaking up the AT&T cartel that fought every innovation that has led to vastly increased service offerings at a much lower cost.Read more ›