Binyamin Appelbaum – The Economists’ Hour: Summary with Audio

Book Info

• Book name: The Economists’ Hour: False Prophets, Free Markets, and the Fracture of Society
• Author: Binyamin Appelbaum
• Genre: Business & Economics, History & Politics
• Pages: 448
• Published Year: 2019
• Publisher: Little, Brown and Company
• Language: English
• Awards: Wall Street Journal business bestseller, Porchlight Business Book Award winner for Narrative and Biography

Audio Summary

Synopsis

In “The Economists’ Hour,” Binyamin Appelbaum meticulously traces the rise of economists from obscure academics to powerful influencers in American policy-making. The book explores how free-market ideas championed by figures like Milton Friedman reshaped government approach to issues ranging from taxes to antitrust laws. Appelbaum critically examines the consequences of this shift, highlighting both the successes and failures of market-centric policies, and ultimately questioning whether this economists’ revolution has truly benefited society as a whole.

Key Takeaways

• Economists transitioned from academic obscurity to significant policy influence post-World War II.
• Free-market ideologies dramatically reshaped American economic policies, from ending the draft to deregulating industries.
• While these policies led to some economic growth, they also contributed to increased inequality and financial instability.
• The book challenges readers to reconsider the role of economists and free-market principles in shaping public policy.

My Summary

The Rise of the Economists: A New Era in American Policy

As I delved into Binyamin Appelbaum’s “The Economists’ Hour,” I found myself captivated by the dramatic transformation of economists from ivory tower academics to powerful shapers of public policy. This shift, which began in the post-World War II era, has had profound implications for American society that we’re still grappling with today.

From Classrooms to Corridors of Power

Appelbaum paints a vivid picture of how economists like Milton Friedman, Arthur Laffer, and Walter Oye emerged from the shadows of academia to become influential voices in government. Their ascent wasn’t just a matter of chance; it was a calculated effort to promote free-market ideologies as solutions to America’s economic challenges.

One of the most fascinating examples Appelbaum provides is the economists’ role in ending the military draft. While we often associate this change with anti-war protests, the author reveals how right-wing economists argued for its abolition on grounds of economic efficiency. This episode serves as a perfect illustration of how economic thinking began to permeate areas of policy previously dominated by other considerations.

The Triumph of Monetarism and Supply-Side Economics

The book does an excellent job of explaining complex economic theories in accessible terms. I found the sections on monetarism and supply-side economics particularly enlightening. Appelbaum shows how these ideas, championed by figures like Milton Friedman and Arthur Laffer, came to dominate economic policy-making in the 1970s and 1980s.

The author’s analysis of the Reagan era is especially poignant. He demonstrates how supply-side economics, with its emphasis on tax cuts and deregulation, became the cornerstone of Republican economic policy. While these policies led to some economic growth, Appelbaum doesn’t shy away from discussing their less savory consequences, such as skyrocketing inequality and ballooning government deficits.

The Cost of Efficiency: Deregulation and Its Discontents

One of the most thought-provoking sections of the book deals with the push for deregulation across various industries. Appelbaum uses the example of airline deregulation to illustrate both the benefits and drawbacks of this approach. While deregulation initially led to lower prices and increased access to air travel, it also resulted in the consolidation of the industry and, ironically, higher prices in the long run.

This pattern of short-term gains followed by long-term issues is a recurring theme in the book. It made me reflect on how we often prioritize immediate economic benefits over long-term stability and equity.

The Human Cost of Economic Calculus

Perhaps the most unsettling aspect of the economists’ rise to power is the increasing tendency to apply cost-benefit analysis to human life. Appelbaum’s discussion of how economists began assigning dollar values to human lives for regulatory purposes is both fascinating and disturbing. It raises profound ethical questions about how we make policy decisions and what we value as a society.

Global Implications: The Chilean Experiment

The book’s exploration of how these economic ideas were exported globally is eye-opening. The section on Chile under Pinochet serves as a stark reminder of how economic theories can have real and often devastating consequences when implemented without regard for social and political contexts.

The Legacy of Unrestrained Markets

Appelbaum’s analysis of financial deregulation and its role in the 2008 financial crisis is particularly relevant given our current economic climate. It’s a sobering reminder of the potential dangers of unchecked market forces and the importance of robust regulatory frameworks.

Reflections on the Economists’ Legacy

As I finished “The Economists’ Hour,” I found myself grappling with mixed feelings. On one hand, the book clearly illustrates how economic thinking has contributed to significant policy innovations and economic growth. On the other, it raises serious questions about the unintended consequences of these policies, particularly in terms of inequality and financial instability.

Appelbaum’s work challenges us to reconsider the role of economists in shaping public policy. Should we continue to rely so heavily on economic models and theories, or do we need a more balanced approach that incorporates other disciplines and perspectives?

Looking Forward: Balancing Markets and Society

In our current era of economic uncertainty and growing inequality, “The Economists’ Hour” feels particularly timely. It prompts us to ask: How can we harness the insights of economics while also addressing its shortcomings? How do we balance the pursuit of economic efficiency with other societal goals like equity and stability?

These are not easy questions, but they are crucial ones. As we face new economic challenges in the 21st century, from climate change to technological disruption, the lessons from this book can help us chart a more balanced and inclusive economic path forward.

A Call for Engaged Citizenship

Ultimately, “The Economists’ Hour” is a call for more engaged and informed citizenship. By understanding how economic ideas have shaped our world, we can better participate in the debates that will determine our economic future. Whether you agree with Appelbaum’s conclusions or not, this book provides invaluable context for understanding the economic policies that impact our daily lives.

As I closed the final pages of this book, I found myself with a newfound appreciation for the complexity of economic policy-making and a renewed commitment to staying informed about these crucial issues. I encourage all readers to approach this book with an open mind and to use it as a starting point for further exploration and discussion of these vital topics.