In this highly acclaimed, provocative book, Robert Kuttner disputes the laissez-faire direction of both economic theory and practice that has been gaining in prominence since the mid-1970s. Dissenting voices, Kuttner argues, have been drowned out by a stream of circular arguments and complex mathematical models that ignore real-world conditions and disregard values that can't easily be turned into commodities. With its brilliant explanation of how some sectors of the economy require a blend of market, regulation, and social outlay, and a new preface addressing the current global economic crisis, Kuttner's study will play an important role in policy-making for the twenty-first century.
"The best survey of the limits of free markets that we have. . . . A much needed plea for pragmatism: Take from free markets what is good and do not hesitate to recognize what is bad."--Jeff Madrick, "Los Angeles Times"
"It ought to be compulsory reading for all politicians--fortunately for them and us, it is an elegant read."--"The Economist"
"Demonstrating an impressive mastery of a vast range of material, Mr. Kuttner lays out the case for the market's insufficiency in field after field: employment, medicine, banking, securities, telecommunications, electric power."--Nicholas Lemann, "New York Times Book Review"
"A powerful empirical broadside. One by one, he lays on cases where governments have outdone markets, or at least performed well."--Michael Hirsh, "Newsweek"
"To understand the economic policy debates that will take place in the next few years, you can't do better than to read this book."--Suzanne Garment, "Washington Post Book World"
An exhaustive but tendentious critique of market economics from the liberal commentator who first addressed this issue in The End of Laissez-Faire (1991). In his three-part audit, Business Week columnist Kuttner first provides an overview that effectively damns markets with faint praise. For instance, while commending their role in facilitating commerce, setting prices for goods and services, and allocating resources, he cites a lengthy list of instances in which markets fail to measure up. By way of example, the author notes that there is no good market reason for free public libraries, which most polities rightly value. Sniping away at utopian ideologues who view the market as a panacea for whatever ails society, Kuttner reviews the putative shortcomings of labor, health-care, and capital markets, arguing that intervention is required to avert the sometimes calamitous or undesirable results of overly free enterprise. He does not face up to such unpleasant matters as the fact that the burden of government-mandated benefits has stalled job growth in the European Union, whose mixed economy he much admires. In like vein, the author offers kind words for Japan's bureaucratically guided approach to capitalism without dwelling on that nation's consumers, who are obliged to pay artificially high prices at retail as a result of the system. By contrast, Kuttner includes a wealth of scenarios spelling out ways in which prosperity might be advanced by riding closer herd on competition in any number of private-sector industries (airlines, electric utilities, telecommunications, et al.), giving federal regulatory agencies appreciably greater powers, and implementing economic/trade policies that could enhance the common weal. A "yes . . . but" analysis that accentuates the negative aspects of laissez-faire and promotes a decidedly progressive political/socioeconomic agenda. The text has a notably belligerent foreword by Richard C. Leone, president of the Twentieth Century Fund (which sponsored Kuttner's book). (Kirkus Reviews)