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
Challenging the prevailing conservative doctrine that an unregulated, self-correcting, free-market economy is the ideal, Kuttner (The End of Laissez-Faire) argues that in a humane society, whole realms of activity necessarily depart from pure market principles because market norms drive out nonmarket norms-civility, commitment to the public good, personal economic security and liberty. In the workplace, a growing tendency to treat human labor purely as a commodity has led to an increasing polarization of wages, erosion of standards of fairness and greater worker insecurity, he maintains. Overreliance on market mechanisms is ruining the health care system, contends Kuttner, a contributing columnist to Business Week, because of enormous hidden costs engendered by opportunism, fragmentation, underinvestment in public health and prevention, and inefficient use of home care and nursing care. Arguing that deregulation of financial markets leads to offsetting inefficiencies, he casts a skeptical eye on hostile takeovers, junk bonds and derivatives and advocates "stakeholder capitalism" to make shareholders more accountable to employees. In a benchmark for future debate, Kuttner brings, clear, pragmatic thinking to complex, thorny issues, reclaiming a middle ground between champions of laissez-faire capitalism and statism. (Jan.)