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Book report

August 7th, 2016

I’ve been getting lots of free books lately, and the implied contract is that I should write about at least some of them. So, here are my quick reactions to some books CT readers might find interesting. They are

The Great Leveler: Capitalism and Competition in the Court of Law by Brett Christophers

The Rise and Fall of American Growth:
The U.S. Standard of Living since the Civil War
by Robert J. Gordon

The Sharing Economy:The End of Employment and the Rise of Crowd-Based Capitalism by Arun Sundararajan

Econobabble: How to Decode Political Spin and Economic Nonsense by Richard Denniss

Generation Less: How Australia is Cheating the Young by Jennifer Rayner

I’ll be on a panel discussing the last two of these at the Brisbane Writers Festival, Sep 11-16.

The Great Leveler: Capitalism and Competition in the Court of Law by Brett Christophers looks at the balance between competition and monopoly in capitalist economies, and makes the case that it has shifted heavily towards monopoly for two reasons. First, intellectual property is increasingly central to the value of corporations. Second, the Chicago critique of antitrust policy has been widely accepted, with the result that more and more markets are dominated by a handful of firms. To that list, I’d add privatisation and corporatisation of government businesses, which have greatly reduced the role of public ownership as a policy response to monopoly, particularly in relation to utilities and infrastructure. More speculatively, I think that there’s a complementary relationship between monopoly profits and financialisation.

The Rise and Fall of American Growth:
The U.S. Standard of Living since the Civil War
presents detailed evidence for Robert J. Gordon’s view that the US has entered a period of permanently depressed economic growth, particularly because the low-hanging technological fruit has been picked and partly because of developments endogenous to the economy, such as rising inequality. The book is massive already, but I nevertheless think that it suffers as a result of treating the US in isolation. The fact that economies will inside the technological frontier also seem to be suffering from stagnation suggests to me that endogenous developments may be more important than technology.

The Sharing Economy:The End of Employment and the Rise of Crowd-Based Capitalism by Arun Sundararajan is well worth a read, but the relevant part of the title is “The End of Employment”. In fact, the book would have been better entitled “The Gig Economy“. Sundararajan refers back to Yochai Benkler’s classic Sharing Nicely. Long before Uber, Benkler was talking about “ride sharing” in the context of Internet-facilitated car pooling. That comparison makes it obvious that there is no sharing involved in Uber. It’s just a taxi service where the owner-drivers have none of the entitlements that employees usually get. That’s even more true of examples like TaskRabbit, which is just an app for hiring freelance workers.

Econobabble: How to Decode Political Spin and Economic Nonsense by Richard Denniss shows how economics is used for the purpose of mystification to control public debates and what can be done about it. [Disclosure: I’ve worked with Richard on a number of the issues mentioned in the book, such as the economic evaluation of coal mining projects]

Generation Less: How Australia is Cheating the Young by Jennifer Rayner is a big improvement on the kind of generation game nonsense I’ve been criticising for the better part of a generation. Rayner shows how developments in the economy over the last couple of decades have led to worse life prospects for the current cohort of young (roughly, under 35) people. I’d prefer to put this argument into the broader context that inequality has been increasing on all dimensions: capital vs labor, college-educated vs high school, experienced vs less experienced and, along with all of these, older vs younger. [Disclosure: I gave comments on an earlier draft and I’m quoted in the book]

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  1. paul walter
    August 7th, 2016 at 21:54 | #1

    Thank god for macroeconomists.

  2. Ikonoclast
    August 8th, 2016 at 08:08 | #2

    If it is argued that the shift to monopoly is caused or precipitated by (a) intellectual property (being) increasingly central to the value of corporations, (b) the legal-institutional retrenchment of anti-trust policy and (c) privatisation and coporatisation of government businesses then we would still need to ask further questions. I wonder if the book asks these questions? Can anyone who has read the book tell me?

    Clearly intellectual property laws, anti-trust laws and privatisation legislation are legal-institutional levers which appear capable, and almost certainly are capable, of shifting the current economic model towards or away from monopolism. This still begs further questions. Who has the power to move these levers and who does not have such power in our current political economy? Are these levers the only “things” which control such shifts in the economy or does the economy itself have inherent (endogenous?) characteristics and tendencies which in this era have acted to move the economy towards increasing monopolisation? Does the book delve into these issues?

    My wider question is this. Do any of these books question overall capitalist orthodoxy as such? Coming from me it’s a loaded question of course. If not, then honestly I suspect I would be completely wasting my time reading any of these books. This is even though I suspect I would have very considerable sympathy with some of the arguments in “Econobabble” and “Generation Less”. But in the end, believing you can fight inequality tendencies with capitalism still in place is like believing you can fight global warming with coal burning still in place. “Capitalism is good for humanity” is right up there with “Coal is good for humanity”.

  3. Newtownian
    August 8th, 2016 at 10:48 | #3

    While you are in the mood for comment/review…..any thoughts on ?

    1. Mervyn King’s “The End of Alchemy”

    and

    2. Sajayat Das’s ” A Banquet of Consequences: Have We Consumed Our Own Future?” or maybe his newer book. “The Age of Stagnation: Why Perpetual Growth is Unattainable and the Global Economy is in Peril.”

    The first is interesting in that there isnt a single reference to the environment or climate change as though King has ignored his own title.

    The second is interested as Das is clearly growing an environmental/ecological conscience. While his LTG analysis is still pretty basic to what I’ve seen its still good to see more attempts to integrate ecology and economics beyond the crude treatment of the natural world ecosystems and resources as just another commodity to be bought and sold.

  4. totaram
    August 8th, 2016 at 12:34 | #4

    @Newtownian
    Satyajit Das – sorry, you have mangled the name quite badly.

  5. Dave
    August 9th, 2016 at 14:45 | #5

    JQ the first report above just gives a short summary of what the book says. Is it any good?

  6. GrueBleen
    August 9th, 2016 at 16:49 | #6

    @Ikonoclast

    You do specialize in asking the questions that nobody either can or wants to answer, don’t you. Personally, I always thought that intellectual property laws and anti-trust laws were just “fingers in the dyke” while the dam wall was collapsing all around them. Not “privatizing” everything in sight might have helped a little, though.

    But mate, “coal is good” for humanity – at least it was when there was still significantly fewer than 2 billion of us on the planet and only about 20% of us were industrialized. Could’ve burnt coal by the mega-tonne then and still been well within the capacity of the natural carbon sinks.

    So maybe if we’d all preempted China around then, things now would still be copacetic, at least on the climate front.

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