Books to Get You Thinking
The world today faces the critical challenges of widening income inequality, slowdown in economic growth, and trade wars - all juxtaposed against the threat of climate change. The benefits of technological breakthroughs, innovation and economic growth in the past few decades have largely stayed confined to certain geographical areas and occupations while the exponential growth in the use of fossil fuels has resulted in global warming. As we look to economists, scientists and technology experts to provide us with solutions, there are several outstanding books that give a lucid perspective on how to make sense of the complex nature of the challenges we face and what kind of economic, social and institutional policies are needed to reduce and eliminate existing poverty levels. Here we highlight the research of three eminent scholars who discuss the dynamics of the economic systems responsible for where we are, and what governments could do address the most pressing economic constraints that continue to grip large sections of the world - all books are available at the Mercer County Library System!
The Great Reversal: How America Gave Up on Free Markets by Thomas Philippon
In this fascinating book, the author, Thomas Philippon, a leading economist and professor of finance at the Stern School of Business, New York University, examines the transformation of the American economy over the last three decades and presents a striking thesis that in many sectors, free competition - one of the key drivers of economic growth - has declined significantly. Relentless business innovation, technological breakthroughs and free market entrepreneurship enabled America to build a strong economy which became a model of economic growth and wealth creation. However, the rise of monopolies over the last two decades has reigned in free market forces and resulted in higher prices and lower services to consumers, stifled innovations and made the American economy more vulnerable to external competition. To support his theory of the great reversal in the American economy, the author has conducted comprehensive economic research and analysis using extensive financial data and economic modelling with specific case studies of the telecommunications and airline industries. The studies reveal that the concentration of a small number of firms and the growth of monopoly in an industry has contributed to a significant rise in corporate profits at the cost of consumers and employees, leading to higher profit margins for companies and lower levels of wages, productivity and employment. He attributes this negative development to the rising influence of corporate lobbyists and campaign contributions to the American legislative process, along with a lack of regulatory enforcement. One particularly illuminating analysis relates to a comparison of the American and European economies and how European regulatory and governing processes have been successful in controlling the rise of corporate monopolies. As policy prescriptions, Philippon advocates for government regulations that allow free markets by removing barriers to entry and growth of small firms, reorganizing inefficient companies and protecting transparency, privacy and data ownership.
People, Power, and Profits: Progressive Capitalism for an Age of Discontent by Joseph Stiglitz
Joseph Stiglitz, Nobel Prize winning economist and professor at Columbia University, has done extensive work on economic growth and inequality. In his newest book he explores how, in the process of transforming from a largely manufacturing economy to a service sector economy, market forces in the US have worked in a way where a small proportion of the population on the top has become wealthy - not from innovations that have created value but through the transfer of wealth between classes. Stiglitz identifies four different trends that have created most of the economic woes the US faces today. These forces include the growth of monopoly power over time, lack of adequate regulations, globalization and technology changes without any definite plans in place to counter the displacement of workers through retraining and creating new jobs. In the second half of the book, Stiglitz provides a policy framework that would help reclaim America by building a fairer economy, one with more equality of opportunity, where the gains of economic growth are distributed more equitably. This rests on a more active role for the government in making investments in education, science and technology research, the dissipation of knowledge, as well as managing globalization and climate change. Government intervention could also promote competitive markets by offering a public option in health insurance, and retirement annuities and mortgages to help curtail the concentration of market power in the hands of a few top companies. A system of financial regulations could be designed to safeguard public interests from the narrow, short-term profit goals of banks, investment and mortgage companies. To promote higher productivity and labor participation, Stiglitz suggests the government implementation of more family friendly policies such as better family leave policies. For preserving capitalism it is important to strengthen and maintain a balance between the different institutions of the economy that include both the government and the private sector.
Poor Economics: A Radical Rethinking of the Way to Fight Global Poverty by Abhijit Banerjee and Esther Duflo
Abhijit Banerjee, professor at MIT, was awarded the 2019 Nobel Prize in Economics along with his co-researcher and wife, Esther Duflo, and economist, Michael Kremer "for their experimental approach to alleviating global poverty". Poor Economics, which focuses on some of the world’s poorest communities, is based on eight years of field research using hundreds of randomized controlled trials to find out how people live in some of the most disadvantaged populations inhabiting the villages of India, Kenya, Indonesia and other developing countries. It investigates many different facets of poverty and how people with serious resource constraints think, reason and react in areas as finance, health, and education. The premise of the book is that using empirical economics to understand the rationale behind the day to day economic decisions taken by the poor can be an effective tool to formulate successful institutional and economic policies that target specific problems such as immunization and school enrollment. Traditional economic solutions rest on assumptions of an irrepressible dynamic economy, of rational decisions and movements of labor in response to changes in wages, incentives and opportunities. However, in reality there is a stickiness and inertia in poor communities - there is a reluctance to move freely between different jobs and geographical areas and this makes policies rooted in traditional economics ineffective.
Good Economics for Hard Times by Abhijit Banerjee and Esther Duflo
Good Economics for Hard Times, the second book by the two development economists, focuses on broader solutions to some of these critical challenges beyond those offered by traditional economic models. They advocate ‘Good Economics’ that emphasizes dignity for all as a central goal. Randomized-controlled trials and sophisticated empirical studies can be used to help identify specific social and economic policies that governments could implement to help not just poorer communities in developing countries, but also lift communities that have been left behind by globalization and technology advances in the more resource riche countries such as the United States. In addition, using specific empirical studies, the authors also systematically highlight the fallacies of many existing beliefs about tariffs, trade and migration policies and their effects on local employment and wage levels.
The Great Reversal: How America Gave Up on Free Markets by Thomas Philippon
In this fascinating book, the author, Thomas Philippon, a leading economist and professor of finance at the Stern School of Business, New York University, examines the transformation of the American economy over the last three decades and presents a striking thesis that in many sectors, free competition - one of the key drivers of economic growth - has declined significantly. Relentless business innovation, technological breakthroughs and free market entrepreneurship enabled America to build a strong economy which became a model of economic growth and wealth creation. However, the rise of monopolies over the last two decades has reigned in free market forces and resulted in higher prices and lower services to consumers, stifled innovations and made the American economy more vulnerable to external competition. To support his theory of the great reversal in the American economy, the author has conducted comprehensive economic research and analysis using extensive financial data and economic modelling with specific case studies of the telecommunications and airline industries. The studies reveal that the concentration of a small number of firms and the growth of monopoly in an industry has contributed to a significant rise in corporate profits at the cost of consumers and employees, leading to higher profit margins for companies and lower levels of wages, productivity and employment. He attributes this negative development to the rising influence of corporate lobbyists and campaign contributions to the American legislative process, along with a lack of regulatory enforcement. One particularly illuminating analysis relates to a comparison of the American and European economies and how European regulatory and governing processes have been successful in controlling the rise of corporate monopolies. As policy prescriptions, Philippon advocates for government regulations that allow free markets by removing barriers to entry and growth of small firms, reorganizing inefficient companies and protecting transparency, privacy and data ownership.
Joseph Stiglitz, Nobel Prize winning economist and professor at Columbia University, has done extensive work on economic growth and inequality. In his newest book he explores how, in the process of transforming from a largely manufacturing economy to a service sector economy, market forces in the US have worked in a way where a small proportion of the population on the top has become wealthy - not from innovations that have created value but through the transfer of wealth between classes. Stiglitz identifies four different trends that have created most of the economic woes the US faces today. These forces include the growth of monopoly power over time, lack of adequate regulations, globalization and technology changes without any definite plans in place to counter the displacement of workers through retraining and creating new jobs. In the second half of the book, Stiglitz provides a policy framework that would help reclaim America by building a fairer economy, one with more equality of opportunity, where the gains of economic growth are distributed more equitably. This rests on a more active role for the government in making investments in education, science and technology research, the dissipation of knowledge, as well as managing globalization and climate change. Government intervention could also promote competitive markets by offering a public option in health insurance, and retirement annuities and mortgages to help curtail the concentration of market power in the hands of a few top companies. A system of financial regulations could be designed to safeguard public interests from the narrow, short-term profit goals of banks, investment and mortgage companies. To promote higher productivity and labor participation, Stiglitz suggests the government implementation of more family friendly policies such as better family leave policies. For preserving capitalism it is important to strengthen and maintain a balance between the different institutions of the economy that include both the government and the private sector.
Good Economics for Hard Times, the second book by the two development economists, focuses on broader solutions to some of these critical challenges beyond those offered by traditional economic models. They advocate ‘Good Economics’ that emphasizes dignity for all as a central goal. Randomized-controlled trials and sophisticated empirical studies can be used to help identify specific social and economic policies that governments could implement to help not just poorer communities in developing countries, but also lift communities that have been left behind by globalization and technology advances in the more resource riche countries such as the United States. In addition, using specific empirical studies, the authors also systematically highlight the fallacies of many existing beliefs about tariffs, trade and migration policies and their effects on local employment and wage levels.
- by Nita Mathur, West Windsor
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