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 theelements 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 ofthe 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 As a result, Regan's vision has been replaced by "the predator state," which he defines as (Page 131) ".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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The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too (Hardcover)
I rate this book very highly. I was a big fan of the first edition and it proved to be a good servant to many of my students. The new edition is even better and I guess it would be a very useful test for economics and business first years as well as older readers who want to get to grips with economics.
I truly enjoyed this book.It is a clear and concise introduction to financial policies in which developing and industrial countries engage while globalization continues to affect the world.The book truly helps the reporter and layperson understand the world in which we live.
The author succinctly dismantles the mainsteam kudos of globalization without remorse. This is the story of how globalization has widened inequality, corrupted politicians, estranged neighbors from one another, torn families apart, privitized the commons(even rainwater!), prostituted women, caused numerous suicides, and sadly, the gut wrenching beat of betrayal goes on. 