A review by ninjalawyer
The Economists' Hour: False Prophets, Free Markets, and the Fracture of Society, by Binyamin Appelbaum
5.0
This is a book with endless end notes, on a subject (economics) that should be dry, and yet is completely captivating.
The author makes the point that, since around the 1970's, Friedman-style economists have had an outsize influence on public policy. These economists have promoted the view that the best way to drive efficiency is by deregulating markets, and they've been such good ad-men that free markets have become a state religion in most western countries. This is in spite of the fact that efficiency isn't the same as benefiting the largest number of people, inequality has exploded and millions have been cast out of work.
Just to clarify, the author is not anti-market. However, he argues that market efficiency, divorced from the real-world results, should not be (but often has been) the end goal of economics. A more inefficient market that provides a more equal distribution of wages, for example, may be more desirable than one where most people are worse off but a handful are showered in wealth. While the point is only briefly made in the book, he also suggests that lower inefficiency for a goal like this can actually boost overall economic growth.
A clear takeaway is that economics is often thought of as a hard science, but is in reality a soft science (and occasionally the equivalent of astrology). Economists, whether intentionally or not, have frequently started with a conclusion based on whatever ideology they like (lowering taxes is good), worked backwards to come up with a theory and models that supports the preferred conclusions, and then worked with policy makers to subject million in the real world to economic experiments that they pointedly ignored the results of.
The author makes the point that, since around the 1970's, Friedman-style economists have had an outsize influence on public policy. These economists have promoted the view that the best way to drive efficiency is by deregulating markets, and they've been such good ad-men that free markets have become a state religion in most western countries. This is in spite of the fact that efficiency isn't the same as benefiting the largest number of people, inequality has exploded and millions have been cast out of work.
Just to clarify, the author is not anti-market. However, he argues that market efficiency, divorced from the real-world results, should not be (but often has been) the end goal of economics. A more inefficient market that provides a more equal distribution of wages, for example, may be more desirable than one where most people are worse off but a handful are showered in wealth. While the point is only briefly made in the book, he also suggests that lower inefficiency for a goal like this can actually boost overall economic growth.
A clear takeaway is that economics is often thought of as a hard science, but is in reality a soft science (and occasionally the equivalent of astrology). Economists, whether intentionally or not, have frequently started with a conclusion based on whatever ideology they like (lowering taxes is good), worked backwards to come up with a theory and models that supports the preferred conclusions, and then worked with policy makers to subject million in the real world to economic experiments that they pointedly ignored the results of.