After decades of pervasive influence over government policy, economists have done much to create the world in which we live. And yet, how well do they actually understand human behaviour? As the Western world turns against 'experts', has their time come to an end?
The Economists' Hour by Binyamin Appelbaum is the biography of a revolution: the story of how economists who believed in the power and the glory of free markets transformed the business of government, the conduct of business and, as a result, the patterns of everyday life. In the four decades between 1969 and 2008, these economists played a leading role in reshaping taxation and public spending and clearing the way for globalization. They reshaped the US government's approach to regulation, assigning a value to human life to determine which rules are worthwhile. Economists even convinced President Nixon to end military conscription.
The United States was the epicentre of the intellectual ferment, but the embrace of markets was a global phenomenon, seizing the imagination of politicians in countries including the United Kingdom, Chile and New Zealand.
The revolution failed to deliver on its central promise of increased prosperity. In the United States, growth has slowed in every successive decade since the 1960s. And the cost of the failure was steep. Policymakers traded well-paid jobs for low-cost electronics; the loss of work weakened the fabric of society and of democracy. Soaring inequality extends far beyond incomes: life expectancy for less affluent Americans has declined in recent years. And the focus on efficiency has come at the expense of the future: lower taxes instead of education and infrastructure; limited environmental regulation as oceans rise and California burns.
This book is a reckoning: the economists' hour is coming to an end, and the world they have left us with feels less predictable than when it began.
Binyamin Appelbaum is a Washington correspondent for the New York Times, where he covers the Federal Reserve and other aspects of economic policy. Before joining the Times in 2010, he was a reporter at the Washington Post, the Boston Globe, and the Charlotte Observer, where he was part of a team of reporters nominated for the Pulitzer Prize in 2008 for coverage of the subprime-mortgage crisis.
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