“Vivid case studies . . . Adler’s frustration with wrongheaded economic thinking is as entertaining as it is thought provoking.” —Publishers Weekly
Why do so many contemporary economists consider food subsidies in starving countries, rent control in rich cities, and health insurance everywhere “inefficient”? Why do they feel that corporate executives deserve no less than their multimillion-dollar “compensation” packages and workers no more than their meager wages? Here is a lively and accessible debunking of the two elements that make economics the “science” of the rich: the definition of what is efficient and the theory of how wages are determined. The first is used to justify the cruelest policies, the second grand larceny.
Filled with lively examples—from food riots in Indonesia to eminent domain in Connecticut and everyone from Adam Smith to Jeremy Bentham to Larry Summers—Economics for the Rest of Us shows how today’s dominant economic theories evolved, how they explicitly favor the rich over the poor, and why they’re not the only or best options. Written for anyone with an interest in understanding contemporary economic thinking—and why it is dead wrong—Economics for the Rest of Us offers a foundation for a fundamentally more just economic system.
“Brilliant.” —David Cay Johnston, Pulitzer Prize–winning and New York Times–bestselling author of It’s Even Worse Than You Think
Armed with vivid case studies and a populist axe to grind, Columbia economics professor Adler debunks the conventional economic wisdom that what's good for the rich and powerful is good for the economy through discussions of economic efficiency and how wages are determined. His main target is "the critical building block of modern economics" Pareto efficiency the theory that no one can be made better off without someone else being made worse off. Pareto efficiency balks at equitable resource allocation (especially from rich to poor); Adler argues that the model, carried to its extreme, proves that poor people should not be allowed to breathe clean air and that rich people pay far too many taxes, leading into a fascinating discussion of wage disparity. The claim that a person earns an amount determined by the value of what she produces is fundamentally flawed, he maintains, and the evidence shows that wages are determined by the powers a worker possesses or does not possess at the bargaining table. Adler's frustration with wrongheaded economic thinking is as entertaining as it is thought provoking.