The Predator State How Conservatives Abandoned the Free Market And Why Liberals Should Too by James K. Galbraith
This book is an attack on supply side and conservative economics. It argues against many accepted dogmas of current economics. There are discussions of price controls, planning, and national standards which are no longer part of the national policy debate. Numerous examples abound of how many accepted ideas are false. For example, James K. Galbraith argues that full employment is more effective for the economy because it limits waste of resources.
One of the central tenets of the book is that the free market is excessively focused on consumption and individual economic freedoms. These freedoms concentrate capital into a small number of economic hands. At the same while the free market has become sacrosant, the rights of labor have disappeared from the discussion, as well as the meaning of achieving the American dream.
This concentration of capital has created a new kind of politician. With excessive CEO pay, it allows corporate CEOs to move easily into the political sphere. Many of these corporate representatives turned politicians become predatory. Their primary interest is to extract resources from the government and turn it over to private corporations. James K. Galbraith gives numerous examples from Enron and Tyco, vouchers in schools, social security privatization, to efforts to deregulate entire industries. The majority of this extraction is occurring in programs that help the middle class.
Because most of this political and corporate activity is focused on short term profits, it often leads to financial instability in the United States. This is partially what caused the current fiscal crisis in the United States.
He further argues that the world financial trade system is not a system of free trade. The United States may not be able to maintain its position on top if it continues to generate more financial crises. The Euro or a combination of currencies could possibly take the place of the dollar.
This book is very biased against conservatives and libertarians. However, it has many important points to make. In many parts it is not an enjoyable book to read because it attacks so many basic beliefs. However, it does shed some light on the fiscal crisis in the United States.
James K. Galbraith is the son of John Kenneth Galbraith. James Galbraith holds to Keynesian economics which have gone out of style as well as many of the economic theories of John Kenneth Galbraith.
In the beginning of the book, the author states he is writing a popular book, not an academic treatise. I wish he had included some statistics and put in some charts and tables. It would have made the book far better. There is an index, but there is no bibliography. A bibliography would have been helpful. He footnotes the book, but does not include endnotes. The book is printed by the Free Press which is known for its focus on printing books with new and often radical ideas.
Showing posts with label economics. Show all posts
Showing posts with label economics. Show all posts
Sunday, October 5, 2008
Sunday, August 10, 2008
The Post American World by Fareed Zakaria-- Review
The Post American World by Fareed Zakaria-- Review
I did not like The Post American World by Fareed Zakaria. I thought it was a hyped up book designed to capitalize on Americans preconceptions of how the world works. The book focused on India and China and their rise in the world. It fed into the idea that a rising China will be the most important world power. So will a rising India. I think that this is overblown. Certainly, the world is changing, but not in the way the author is describing.
While the book applauds China's rise to being the largest manufacturer, it does little to point out that while China is a producer of cheap goods, it is not as productive in patents and selling end products where most of the money is made. Essentially, China has become the worlds manufacturer for basic goods the world over.
It also applauds India's rise as a manufacturer and producer of services. Once again, the book misses the boat in many ways. The Philippines are producing nurses, doctors, and programmers and sending them abroad. Indonesia is doing the same. We look at India and we see their ubiquitousness in customer service and call center work. India is very good at producing high technology manufacturing. The Tata corporation is massive. It already is producing the worlds cheapest cars.
My main objection to the book is that it mainly focuses on second world countries, glosses over the European Union, and does not touch deeply enough on the rise of the Scandinavian countries, Australia, and Canada. While India and China are important, several other things which will have more impact are already occurring than the rise of India and China.
Also, I think it avoids talking about the rise of the Central Asian Republics, Kazakhstan, Turkmenistan, and the rebirth of Turkey as a world power. There is also very little about the coming energy crunch which will reshape the middle east.
The Canadian, Australian, and European currencies are matching the dollar. Canada is growing much stronger economically. Australia is also. Canada has the largest reserves of tar sands or hard to extract oil. It is also adopting clean energy technologies at a much greater pace than the United States.
We look at China making goods, but the book does not acknowledge what is happening with German reunification. Germany is becoming even more of a manufacturing powerhouse. It is now the third largest exporter in the world after China. Germany is not manufacturing cheap goods. German machinery is already becoming superior to American counterparts. For example, BMW had to send Americans to Germany to train them for precision manufacturing. No American trade school could match their training.
There is a brief nod toward Sweden when Fareed Zakaria mentions that China is looking towards the Swedish model for its future economic and political success, not the American model. However, the author once again does not acknowledge the changes in politics which are putting many of the Scandinavian countries as the model for economic and political development. It is not just in economics that we are seeing changes. Australia, Sweden, Ireland, Denmark, and many of the European countries have higher standards of living than the United States.
United States politicians like this author are telling us to look backwards and be afraid of (BRIC) Brazil, Russia, India, and China because they are taking jobs away from us. It is called outsourcing. These jobs, however, are often not the highest paying jobs, nor the most technically skilled.
In many areas of manufacturing other countries are moving way ahead of the United States. The United States imports most of its solar panels from Japan and Germany. Vestas sends us many of our new windmills. We buy many of our cell phones from Nokia.
Mr. Zakaria talks about how the world is slowly pulling out of poverty. India and China have moved away from a large portion of their populations being in poverty. So have many other countries like Nigeria and Vietnam. This is a good sign that the world is changing in positive ways. However, it has not changed enough. There is still too much poverty in the global south.
I think the book panders to much to what we expect seeing. It focuses too much on China and India which are important, but not as important as the story of the rise of Australia, the Scandinavian countries, Canada, and the expansion of the European Union. The book should have been more inclusive. I thought it missed too much.
I did not like The Post American World by Fareed Zakaria. I thought it was a hyped up book designed to capitalize on Americans preconceptions of how the world works. The book focused on India and China and their rise in the world. It fed into the idea that a rising China will be the most important world power. So will a rising India. I think that this is overblown. Certainly, the world is changing, but not in the way the author is describing.
While the book applauds China's rise to being the largest manufacturer, it does little to point out that while China is a producer of cheap goods, it is not as productive in patents and selling end products where most of the money is made. Essentially, China has become the worlds manufacturer for basic goods the world over.
It also applauds India's rise as a manufacturer and producer of services. Once again, the book misses the boat in many ways. The Philippines are producing nurses, doctors, and programmers and sending them abroad. Indonesia is doing the same. We look at India and we see their ubiquitousness in customer service and call center work. India is very good at producing high technology manufacturing. The Tata corporation is massive. It already is producing the worlds cheapest cars.
My main objection to the book is that it mainly focuses on second world countries, glosses over the European Union, and does not touch deeply enough on the rise of the Scandinavian countries, Australia, and Canada. While India and China are important, several other things which will have more impact are already occurring than the rise of India and China.
Also, I think it avoids talking about the rise of the Central Asian Republics, Kazakhstan, Turkmenistan, and the rebirth of Turkey as a world power. There is also very little about the coming energy crunch which will reshape the middle east.
The Canadian, Australian, and European currencies are matching the dollar. Canada is growing much stronger economically. Australia is also. Canada has the largest reserves of tar sands or hard to extract oil. It is also adopting clean energy technologies at a much greater pace than the United States.
We look at China making goods, but the book does not acknowledge what is happening with German reunification. Germany is becoming even more of a manufacturing powerhouse. It is now the third largest exporter in the world after China. Germany is not manufacturing cheap goods. German machinery is already becoming superior to American counterparts. For example, BMW had to send Americans to Germany to train them for precision manufacturing. No American trade school could match their training.
There is a brief nod toward Sweden when Fareed Zakaria mentions that China is looking towards the Swedish model for its future economic and political success, not the American model. However, the author once again does not acknowledge the changes in politics which are putting many of the Scandinavian countries as the model for economic and political development. It is not just in economics that we are seeing changes. Australia, Sweden, Ireland, Denmark, and many of the European countries have higher standards of living than the United States.
United States politicians like this author are telling us to look backwards and be afraid of (BRIC) Brazil, Russia, India, and China because they are taking jobs away from us. It is called outsourcing. These jobs, however, are often not the highest paying jobs, nor the most technically skilled.
In many areas of manufacturing other countries are moving way ahead of the United States. The United States imports most of its solar panels from Japan and Germany. Vestas sends us many of our new windmills. We buy many of our cell phones from Nokia.
Mr. Zakaria talks about how the world is slowly pulling out of poverty. India and China have moved away from a large portion of their populations being in poverty. So have many other countries like Nigeria and Vietnam. This is a good sign that the world is changing in positive ways. However, it has not changed enough. There is still too much poverty in the global south.
I think the book panders to much to what we expect seeing. It focuses too much on China and India which are important, but not as important as the story of the rise of Australia, the Scandinavian countries, Canada, and the expansion of the European Union. The book should have been more inclusive. I thought it missed too much.
Thursday, May 22, 2008
Common Wealth Economics For Crowded Planet-- Jeffrey D. Sachs, Review
Common Wealth Economics For A Crowded Planet by Jeffrey D. Sachs is about how to address pressing common human global problems: global environmental issues, population planning, sustainable development, and persistent poverty. It is written in very clear, understandable language. There is no academic jargon here. These issues will affect everyone rich and poor alike.
If we do not address these issues at the source, our security is threatened. For example, the crisis in Ethopia and Sudan can be traced back to lack of water, arable land, and overpopulation. This pushes people into warfare and conflict over very limited resources.
Human beings are now the major cause for environmental change: desertification, global warming, species loss, and industrial pollution are caused by human beings. Jeffrey Sachs sets down a set of specific goals on how to reach these ends.
The problem here is that he couches the goals in the language of the left and the language of the United Nations which can be disconcerting at times. Jeffrey Sachs has worked with United Nations Millenium Project. His language is very much focused on international peace and diplomacy. He wants to considerably reduce global armaments and put the money into peaceful development.
This is quite idealistic. One of the advantages of this approach is that it is a soft power approach, based on diplomacy, development, culture, and superior technical knowledge something which the United States has not followed at all in recent years. He claims that if we do not address these issues we will have more terrorists, more wars, more underdevelopment, and more conflict.
The problem is one of how to balance the need to change underlying problems and still at the same time deal with the issues of terrorism and security.
There is going to be quite a bit of opposition to his ideas from the right as well. He pushes for a combination of family planning and pre-natal care. This is to reduce population pressure and encourage people to have less children. This will be hard to fund because many lobbyists do work against birth control.
I happen to think that his ideas on development are quite interesting. He puts forth the idea that government, society, and business are inseperable. In order for business to move forward infrastructure like roads, schools, and telecommunications need to be built. It is as important to make sure there is an adquate food supply as there are free market reforms.
At the end of many of the chapters, he gives examples on how to address specific problems that are fairly practical. For example in the section on climate change he endorses carbon sequestration and hybrid cars. For persistent poverty, he claims that people should drill wells in communities, open schools, introduce school lunch programs provided by indigenous farmers, distribute new seed stocks, distribute new breeds of livestock, and remove any leftover ordnance from old wars in the countryside.
If you strip away a lot of the political talk, this book gives quite a few good examples on how to address common human problems. I think it is worth reading for the solutions described, not the politics.
Jeffrey D. Sachs is the Director of the Earth Institute at Columbia University and Special Advisor to the U.N. Secretary General Ban Ki Moon on the Millenium Development Goals.
This book is well written and easy to follow. It has notes, a bibliography, and an index. There are eight pages of full color illustrations. I would have liked more illustrations in this book.
Monday, December 17, 2007
Alan Greenspan The Age of Turbulence Adventures In A New World-- Book Review
Alan Greenspan The Age of Turbulence Adventures in A New World is currently on the New York Times Bestseller list. It is 529 pages long with two sets of black and white pictures. The pictures are some of the best political photographs I have ever seen. My favorite picture is of Alan Greenspan lying on the floor of the white house.
This book is both a biographical account, a book on economics, and a story about the federal reserve. The book embodies history in the making. Because Alan Greenspan was directly involved he can talk with authority about the fall of the Berlin Wall, the World Trade Organization protests, Nixon's presidency, and his experiences with leaders around the world from China, Russia, Latin America, and other countries.
The book gives a nice sense of Alan Greenspan as a person. There are anecdotes about him like he takes a bath every morning. In the bath, he takes notes for his morning meetings. It also gives his political viewpoint. He is both an objectivist, a Libertarian Republican, an admirer of President Ford, and a free market capitalist.
Alan Greenspan demonstrates original thinking and a willingness to hold viewpoints which are not popular. He makes some interesting statements like global warming is real, the Iraq war is about oil, and the free market is useless without property rights and the rule of law. At the same time, he claims that carbon caps are futile and we should build nuclear power plants and electric cars so we can cut global warming.
The book is quite readable. There is not a lot of jargon or complex business terms. He addresses the reader directly in plain language. Despite this, the book has a tremendous amount of ideas and opinions in it.
On a personal level, there is some useful information. If you read carefully, you may learn a bit more on how to prepare to live in a complex world. For example, he claims that managers earn 57% more than line workers. The main determiner of this is reliance on highly complex technical education. It makes me rethink what I am going to do with my time.
There is also quite a bit on how the federal reserve monitors the economy. While he does not talk about how to pick stocks, he does talk about how the federal reserve effects the stock markets and banks with its decisions. There is enough on the process of business cycles, irrational exuberance, the internet, and the effects of globalization to make it worth reading if you are an investor.
There is an amazing amount of material covered in this book. It took me about a week to read this book. It is impossible to summarize everything that was written in this book. If you want to learn how economics effect the real world, this book is for you.
This book is both a biographical account, a book on economics, and a story about the federal reserve. The book embodies history in the making. Because Alan Greenspan was directly involved he can talk with authority about the fall of the Berlin Wall, the World Trade Organization protests, Nixon's presidency, and his experiences with leaders around the world from China, Russia, Latin America, and other countries.
The book gives a nice sense of Alan Greenspan as a person. There are anecdotes about him like he takes a bath every morning. In the bath, he takes notes for his morning meetings. It also gives his political viewpoint. He is both an objectivist, a Libertarian Republican, an admirer of President Ford, and a free market capitalist.
Alan Greenspan demonstrates original thinking and a willingness to hold viewpoints which are not popular. He makes some interesting statements like global warming is real, the Iraq war is about oil, and the free market is useless without property rights and the rule of law. At the same time, he claims that carbon caps are futile and we should build nuclear power plants and electric cars so we can cut global warming.
The book is quite readable. There is not a lot of jargon or complex business terms. He addresses the reader directly in plain language. Despite this, the book has a tremendous amount of ideas and opinions in it.
On a personal level, there is some useful information. If you read carefully, you may learn a bit more on how to prepare to live in a complex world. For example, he claims that managers earn 57% more than line workers. The main determiner of this is reliance on highly complex technical education. It makes me rethink what I am going to do with my time.
There is also quite a bit on how the federal reserve monitors the economy. While he does not talk about how to pick stocks, he does talk about how the federal reserve effects the stock markets and banks with its decisions. There is enough on the process of business cycles, irrational exuberance, the internet, and the effects of globalization to make it worth reading if you are an investor.
There is an amazing amount of material covered in this book. It took me about a week to read this book. It is impossible to summarize everything that was written in this book. If you want to learn how economics effect the real world, this book is for you.
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