Friday, February 10, 2017

Review: James Kwak's *Economism*

(Review also posted at Goodreads. If you want to buy a copy, I recommend or your local bookstore.)

A well-argued debunking of the ideology of free markets, perfect competition, and rational actors, the book explains how these have become the excuses for cruel policies leading to the impoverishment of the overwhelming majority in the USA. The book is deceptively simple in its organization: the first chapters is an overview of the book's argument, the second explains the economistic (Econ 101) model of markets and the third covers the marketing of the model. Following chapters explode, with data, economism as applied to the minimum wage, taxation, health care, the mortgage market, and international trade. The last is a summary and prospect.

The short-short summary here is that an oversimplified model of economic behavior and outcomes has become the excuse for policies which impoverish the vast majority of Americans and much of the world. When politicians say that raising the minimum wage makes people poorer, that is an economistic argument, and the data does not support it. When they say that taxation invariably decreases overall wealth, that is an economistic argument, and the data does not support it. And so on.

It is a short simple book, and the text is within the reach of any literate adult. The footnotes carry you into the economic literature, and that is not so accessible, but that is the point of such a book; to make economic conclusions and data available to the literate public without extensive study.

It's a quietly written, rather academic book — the author is a law professor — but that is, in many ways, its strength. Instead of being a loud blatant polemic, it quietly destroys the intellectual underpinnings of US economic policy since Reagan.


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