1/10
Time for another 10 tweet review.
This is my top economics book of 2019. Important for economics, important for climate change. If you read one economics book this year, let it be this.
"The Great Reversal: How America Gave Up on Free Markets", by Thomas Philippon
Time for another 10 tweet review.
This is my top economics book of 2019. Important for economics, important for climate change. If you read one economics book this year, let it be this.
"The Great Reversal: How America Gave Up on Free Markets", by Thomas Philippon
2/10
Philippon is one of a young cadre of French-born economists completely shaking up the profession in the US, alongside Zucmann, Saez, Piketty, etc.
Philippon's duel identity as a French-born, US-based economist allows him to bring a unique perspective to the US economy.
Philippon is one of a young cadre of French-born economists completely shaking up the profession in the US, alongside Zucmann, Saez, Piketty, etc.
Philippon's duel identity as a French-born, US-based economist allows him to bring a unique perspective to the US economy.
3/10
His central thesis is that the US economic has lost its mojo on competition. The result is high prices, high profits, low investment, low innovation, low wages, and high inequality. To be clear, he means firm-to-firm competition. The labour market remains cut-throat.
His central thesis is that the US economic has lost its mojo on competition. The result is high prices, high profits, low investment, low innovation, low wages, and high inequality. To be clear, he means firm-to-firm competition. The labour market remains cut-throat.
4/10
He is careful, methodical, and clear in proving his thesis. For non-economists, it shouldn't be too difficult a book.
His analysis throws out some sacred cows.
No, millennials aren't feckless job-hoppers; they shift job less than previous generations.
He is careful, methodical, and clear in proving his thesis. For non-economists, it shouldn't be too difficult a book.
His analysis throws out some sacred cows.
No, millennials aren't feckless job-hoppers; they shift job less than previous generations.
5/10
No, now is not an era of corporate disruption; rates of firm creation, destruction, and shuffle in corporate rankings are declining.
No, tech giants are not 'special' in their importance to the US economy. They're unique only in how detached they are from the wider economy
No, now is not an era of corporate disruption; rates of firm creation, destruction, and shuffle in corporate rankings are declining.
No, tech giants are not 'special' in their importance to the US economy. They're unique only in how detached they are from the wider economy
6/10
And most importantly: no, Europe is not a moribund graveyard of excess regulation. In fact, Europe's markets are more competitive, prices lower, and corporate profits lower, than in the US.
This is, says Philippon, inherent in the EU's political economy.
And most importantly: no, Europe is not a moribund graveyard of excess regulation. In fact, Europe's markets are more competitive, prices lower, and corporate profits lower, than in the US.
This is, says Philippon, inherent in the EU's political economy.
7/10
Philippon is brutal in examining some of the key 'oligopolistic' sectors in the US: finance, healthcare, and tech. He sees these sectors as rent extractors, not wealth creators, enabled and abetted by the failure of the government to regulate in the public interest.
Philippon is brutal in examining some of the key 'oligopolistic' sectors in the US: finance, healthcare, and tech. He sees these sectors as rent extractors, not wealth creators, enabled and abetted by the failure of the government to regulate in the public interest.
8/10
Philippon explores the role of money in politics in rigging the system in favour of incumbents, as well as the abdication of competition policy in the US in enforcing against competition-restricting mergers (think Facebook's purchase of WhatsApp).
Philippon explores the role of money in politics in rigging the system in favour of incumbents, as well as the abdication of competition policy in the US in enforcing against competition-restricting mergers (think Facebook's purchase of WhatsApp).
9/10
Above all, this book, I think, is about a broader story, namely how the neoliberal elite has used the narrative of the 'free market' in order to stifle the public actions necessary to keep the market free.
This is probably the greatest 'bait and switch' in modern history.
Above all, this book, I think, is about a broader story, namely how the neoliberal elite has used the narrative of the 'free market' in order to stifle the public actions necessary to keep the market free.
This is probably the greatest 'bait and switch' in modern history.
10/10
For climate change, read this book too. It gives the lie to the argument that the US abhorres intervention in the free market and hence will not act. It shows the real truth. Incumbents (fossil fuels) do not want action, and control enough of the system to prevent it.
For climate change, read this book too. It gives the lie to the argument that the US abhorres intervention in the free market and hence will not act. It shows the real truth. Incumbents (fossil fuels) do not want action, and control enough of the system to prevent it.
