Wednesday, April 22, 2009

Book Review: The Predator State


The Predator State – How Conservatives Abandoned the Free Market and Why Liberals Should Too.
by James K. Galbraith.

Being somewhat more knowledgeable than the average economist Galbraith states at the beginning of The Predator State “the disciplined application of conservative principles to economic policy leads to disaster.” From there, he proceeds to deconstruct the free market myth. He starts with the “free” aspect first, showing that the freedom to act is owned by business concerns, for the rest of us, it is the freedom to shop (and thus be satisfied, indeed satiated, such that we do not complain about the state of anything).

Tax cuts take the next hit, reaching the conclusion that “the entire thirty-year history in promoting saving in order to increase investment has been a bust.” Inflation comes next, with the argument that neither interest rates nor low employment cut inflation, but the collapse of labour unions and globalization did the trick (with a resulting increase in inequality between haves and have nots.) Balanced budget’s are the next myth, wherein “balancing the budget is a mission impossible and a fool’s errand.”

His last hit is on “free trade” itself. Several subtopics enter this argument but the bottom line appears to be that the consumptive wealth of the US is upheld by its “symbiotic” ties to China, a “marriage of convenience…not the product of comparative advantage, and it did not emerge from free trade.”

Upon entering his arguments for predation, the current state of US business, Galbraith looks at several issues. First is the understanding of pay versus wealth. Second is the largesse of the US government sector “responsible for well over half of economic activity. Third is the corporate crisis in which “the market has a tendency to undermine the law.” This all leads to the predator state where “nothing is done for the common good” but to obtain “complete control of the apparatus of state” for private gain.

Posted via web from jimnichols's posterous

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