The Moral Consequences of Economic Growth
by Benjamin M. Friedman
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Manufacturer: Vintage
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Binding: Paperback
Dewey Decimal Number: 330
EAN: 9781400095711
ISBN: 1400095719
Label: Vintage
Number Of Items: 1
Number Of Pages: 592
Publication Date: 2006-09-12
Publisher: Vintage
Release Date: 2006-09-12
Studio: Vintage
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Spotlight customer reviews:
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Customer Rating:
Summary: The Chicken or the Egg?
Comment:
Since the rise fascism and Bolshevism in the 1920s there has been the question of how political rights and civil liberties correspond to economic rights and growth. Amartya Sen has argued that the political rights and civil liberties should not be divorced from economic process (Development As Freedom). Sen's normative approach of equating economic rights to the freedoms one achieves with guaranteed civil liberties is one that many can respect.
Benjamin Freidman has taken a more positivist to the same issue. In doing so he asks, "Which came first the chicken or the egg?" Does economic growth in a capitalist setting require democracy and civil liberties or visa versa? Friedman's study looks back not only over all to this question in modern economic history. But, he also takes specific case studies from the United States, Germany, France and others to see the over all trends of the problem.
From this he develops a matrix on the issue. In times of growth political rights tend to expand. In times of stagnation they tend to contract. What is interesting his not how Friedman arrives at this basic framework, but his look into the exceptions of this common sense rule. Why in the 1930s was the political openness of the New Deal accepted, but the recent economic stagnation in France caused the rise of the right-wing Le Pen party?
Friedman is one of the foremost experts on the political economy. He has held a seat at Harvard since 1972. Yet, in this work for public consumption his writing is more along the lines of an historian. He does not delve too far into the economics or the political science of the issue, which many academics tend to - even for the lay reader. Instead, he sees to it that the main ideas are gotten across.
His prescriptions are simple. Maintain economic growth and we can maintain political and civil liberties. While Amartya Sen may find a problem with placing the chicken before the egg, after this work one must understand that economic stagnation helps noone.
Customer Rating:
Summary: Better than church: Economics, the joyful science
Comment: Economics is often considered a values-free discipline (and economists - well, a sperm cell has a better chance of becoming human). Economists have promoted this view with their emphasis on "positive" (scientific) economics. Economic theory must generate testable hypotheses which stand on their ability to predict the future and withstand the test of data. This is actually very important if economic theory is going to serve as the basis for policy. Without a rigorous and dispassionate analysis of the problems we face and their potential solutions, policy is more likely to be destructive than useful. But taken to an academic extreme, this approach makes economics rather arid, an extremely formal social science that looks more like a branch of mathematics. Indeed, some economics journals publish articles so arcane they might as well be about string theory for all the relevance they have to actual human beings.
Friedman understands that economics is much more than mathematics, that it deals directly with human happiness. It's the most optimistic and joyful of sciences, not simply a ruler by which we can measure policy. Its uses and conclusions are fundamentally moral (or immoral). Economic growth isn't just about GDP and reams of statistics, but about the expansion of opportunity, the lifting up of the poor and the powerless to prosperity and self-determination. Markets aren't just about money, but about liberty. It may be the responsibility of economic advisors to be cold, impartial and rational in their analysis and advice, but policy makers and citizens must apply moral reasoning and moral sense to the products of that analysis.
Friedman's book is a solid introduction to the moral relevance of economics. Friedman shows us that economics matters, though it doesn't matter in quite the way that physics matters. Physical knowledge may be used for moral or immoral purposes, but physics is fundamentally without morality. It also need not deal with anything that really matters to you and me. Economic theory can explain human behavior in ways similar to thermodynamic explanations of molecular motion, but humans aren't molecules. You can't simply describe the impact of globalization or tax policy on humans without a moral framework; an attempt to objectify humans as you'd objectify hydrogen molecules contains its own grim morality. It's the strength of Friedman's book that it makes clear that economic decisions and economic analysis are firmly embedded in a moral framework, no matter how hard we might try to ignore it in our pursuit of scientific and mathematical rigor.
Friedman's book isn't just a moral tract; he attempts to make a case for his moral stand. Friedman is a skilled economist, and he marshals historical data and comparisons of different nations and different periods in our own history to make his case. He provides some information useful for evaluating his thesis that economic growth is moral, he doesn't simply assert it. But herein is a weakness in his book. He doesn't provide nearly as much hard information as he should, and he scatters his supporting numbers throughout the text. It would be very helpful to the reader if data were gathered into charts and tables. There's but a single Figure in the book, no tables of data. It should also be noted that his national comparisons leave out some states (China, Singapore, Vietnam) that might contradict his thesis regarding the linkage between economic growth and political liberty. He's chosen his examples far too carefully.
Another weakness of this book is a natural danger of the type of text Friedman has written. Because he is dealing with economics as a moral issue, he takes a moral stance, one that's clearly to the political left in many ways. I have no problem with this, even though I'm somewhat to the right of him, but we should be very clear on one point. While a trained economist like Friedman is in a much better position than the average person to analyze the effects of different policies, he's no more qualified than a pastry chef to comment on the relative desirability of those different policies once their effects have been laid out in terms the pastry chef understands. Friedman makes a number of policy suggestions in his book with which I disagree. He doesn't make it sufficiently clear that their potential effects aren't unambiguously better than those of alternative policies designed to create or enhance economic growth.
My final objection to this book is its length. Friedman is clearly a well-read man of wide interests, and he brings a great deal of his erudition to this book. It strengthens his case, but I'm not sure that the marginal benefits of the 400th page exceed the marginal costs. More than once I found myself wanting an executive summary of the chapter I was reading and wishing that he would just cut to the chase. But that's really a minor complaint. I benefited from reading this book. It's an interesting and thoughtful contribution to the issue of economic growth (and by extension to international trade and economic aid to developing countries), and I strongly recommend it.
Customer Rating:
Summary: Society and Economic Growth
Comment: Friedman explains how growth is good for promoting a freer, more tolerant and open society. The author gives good reasons for defending growth as the major objective of any government.
Customer Rating:
Summary: Interesting Thesis, but overlooking some important points
Comment: Mr. Friedman's book begins with an interesting thesis, defining morality and its definition within a context of economic growth. The idea that economic growth or stagnation effects the mindsets of the people living in that time period is a logical argument that Friedman often well supports with historical facts. However, the exceptions to his argument make me wonder if he really believes in his own thesis, or if he just felt the need to write a book. Furthermore, for every chapter in the book, there seem to be at least one or more flawed arguments or points that, with a little thorough thought or research, don't make sense or can easily be disproven. With these things being the case, I find Friedman's argument a little hard to buy. The entire book seems to build up to the final chapter, which Friedman uses to make policy recommendations that would aid in economic growth; this final chapter could have stood alone from the book entirely, however, because the evidence in the book an his arguments elsewhere in the book (ie. the importance of education) do not add or support his final policy recommendations. His policy recommendations could have easily been listed by students in an economics class as responses to the question "What should the government do to promote economic growth?" They don't push the argument forward or indicate anything that hasn't already been suggested in the past, nor do they give suggestions as to how to go about implementing his policies.
Customer Rating:
Summary: Puzzling
Comment: Friedman begins with a few troubling statistics, particularly the fact that except for a brief period in the late 1900s, most of the fruits of the last three decades of economic growth in the U.S. have accrued to only a small slice of the population. Further, after allowing for higher prices, the average 2004 worker in an American business made 16% less each week than 30+ years earlier. With more and more two-earner households and more individuals holding two jobs, most families' income have more than held their own. But nearly all the gain in the last three decades came only in the late 1990s. Young men entering the American job force in the 1970s started off earning two-thirds more, on average, than the generation starting out in the 1950s; by the early 1990s it was one quarter less than their parents.
Economic growth positively affects the character of the society as a whole, and because neither tolerance nor democracy is a good that private markets value, there is a role for government measures to seek growth beyond what the market would provide on its own. Improved transportation, crime reduction, safety from external attack, savings, education, and patent protection are examples of valuable government contributions.
Friedman asserts that declining investment is a problem in the U.S., and blames it on increased current consumption and government borrowing. (But what about the fact that much cheaper labor is available in Asia?) He goes on to posit that chronically large deficits' depressing effect on America's investment probably received a greater spur from change in the tax structure than the positive aspect of the tax reductions.
Friedman suggests improvement that begins with undoing the Bush administration high-end tax changes that provided 60% of the benefits to the top 10% (earning over $120,000) to reduce the deficit and improve society.
Fireman, like many others, very much wants to improve American education. He begins by focusing on improving the high school graduation rate - stable at about 90% over the last several decades - through more spending. (Friedman, however, forgets that enormous increases in inflation-adjusted per-pupil spending also occurred during this period, and that dropout rates closely correlate with race - ergo, positive home influence is probably a much more potent lever.) More government support for college education is also highly recommended because their incomes average some 70% more than those without a college degree. As for class sizes, Friedman is aware that most quality research has found reductions do NOT improve pupil achievement; nonetheless he suggests reductions would improve graduation rates, though the sources he cites seem to confound race and socio-economic status with class size as influences. He also supports competition within education, citing several inner-city positive examples such as Harlem Community Schools.
Another significant recommendation is raising the Social Security retirement age.
What is puzzling about "The Moral Consequences of Economic Growth" is that Friedman does not address a major issue of today's economic growth - the impact of free trade and illegal immigration on American incomes. Also, his treatment of economic development and population growth on environmental impacts is overly optimistic. These issues seriously limit the book's contributions.
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Editorial Reviews:
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Customer Rating:
Summary: The Chicken or the Egg?
Comment:
Since the rise fascism and Bolshevism in the 1920s there has been the question of how political rights and civil liberties correspond to economic rights and growth. Amartya Sen has argued that the political rights and civil liberties should not be divorced from economic process (Development As Freedom). Sen's normative approach of equating economic rights to the freedoms one achieves with guaranteed civil liberties is one that many can respect.
Benjamin Freidman has taken a more positivist to the same issue. In doing so he asks, "Which came first the chicken or the egg?" Does economic growth in a capitalist setting require democracy and civil liberties or visa versa? Friedman's study looks back not only over all to this question in modern economic history. But, he also takes specific case studies from the United States, Germany, France and others to see the over all trends of the problem.
From this he develops a matrix on the issue. In times of growth political rights tend to expand. In times of stagnation they tend to contract. What is interesting his not how Friedman arrives at this basic framework, but his look into the exceptions of this common sense rule. Why in the 1930s was the political openness of the New Deal accepted, but the recent economic stagnation in France caused the rise of the right-wing Le Pen party?
Friedman is one of the foremost experts on the political economy. He has held a seat at Harvard since 1972. Yet, in this work for public consumption his writing is more along the lines of an historian. He does not delve too far into the economics or the political science of the issue, which many academics tend to - even for the lay reader. Instead, he sees to it that the main ideas are gotten across.
His prescriptions are simple. Maintain economic growth and we can maintain political and civil liberties. While Amartya Sen may find a problem with placing the chicken before the egg, after this work one must understand that economic stagnation helps noone.
Customer Rating:
Summary: Better than church: Economics, the joyful science
Comment: Economics is often considered a values-free discipline (and economists - well, a sperm cell has a better chance of becoming human). Economists have promoted this view with their emphasis on "positive" (scientific) economics. Economic theory must generate testable hypotheses which stand on their ability to predict the future and withstand the test of data. This is actually very important if economic theory is going to serve as the basis for policy. Without a rigorous and dispassionate analysis of the problems we face and their potential solutions, policy is more likely to be destructive than useful. But taken to an academic extreme, this approach makes economics rather arid, an extremely formal social science that looks more like a branch of mathematics. Indeed, some economics journals publish articles so arcane they might as well be about string theory for all the relevance they have to actual human beings.
Friedman understands that economics is much more than mathematics, that it deals directly with human happiness. It's the most optimistic and joyful of sciences, not simply a ruler by which we can measure policy. Its uses and conclusions are fundamentally moral (or immoral). Economic growth isn't just about GDP and reams of statistics, but about the expansion of opportunity, the lifting up of the poor and the powerless to prosperity and self-determination. Markets aren't just about money, but about liberty. It may be the responsibility of economic advisors to be cold, impartial and rational in their analysis and advice, but policy makers and citizens must apply moral reasoning and moral sense to the products of that analysis.
Friedman's book is a solid introduction to the moral relevance of economics. Friedman shows us that economics matters, though it doesn't matter in quite the way that physics matters. Physical knowledge may be used for moral or immoral purposes, but physics is fundamentally without morality. It also need not deal with anything that really matters to you and me. Economic theory can explain human behavior in ways similar to thermodynamic explanations of molecular motion, but humans aren't molecules. You can't simply describe the impact of globalization or tax policy on humans without a moral framework; an attempt to objectify humans as you'd objectify hydrogen molecules contains its own grim morality. It's the strength of Friedman's book that it makes clear that economic decisions and economic analysis are firmly embedded in a moral framework, no matter how hard we might try to ignore it in our pursuit of scientific and mathematical rigor.
Friedman's book isn't just a moral tract; he attempts to make a case for his moral stand. Friedman is a skilled economist, and he marshals historical data and comparisons of different nations and different periods in our own history to make his case. He provides some information useful for evaluating his thesis that economic growth is moral, he doesn't simply assert it. But herein is a weakness in his book. He doesn't provide nearly as much hard information as he should, and he scatters his supporting numbers throughout the text. It would be very helpful to the reader if data were gathered into charts and tables. There's but a single Figure in the book, no tables of data. It should also be noted that his national comparisons leave out some states (China, Singapore, Vietnam) that might contradict his thesis regarding the linkage between economic growth and political liberty. He's chosen his examples far too carefully.
Another weakness of this book is a natural danger of the type of text Friedman has written. Because he is dealing with economics as a moral issue, he takes a moral stance, one that's clearly to the political left in many ways. I have no problem with this, even though I'm somewhat to the right of him, but we should be very clear on one point. While a trained economist like Friedman is in a much better position than the average person to analyze the effects of different policies, he's no more qualified than a pastry chef to comment on the relative desirability of those different policies once their effects have been laid out in terms the pastry chef understands. Friedman makes a number of policy suggestions in his book with which I disagree. He doesn't make it sufficiently clear that their potential effects aren't unambiguously better than those of alternative policies designed to create or enhance economic growth.
My final objection to this book is its length. Friedman is clearly a well-read man of wide interests, and he brings a great deal of his erudition to this book. It strengthens his case, but I'm not sure that the marginal benefits of the 400th page exceed the marginal costs. More than once I found myself wanting an executive summary of the chapter I was reading and wishing that he would just cut to the chase. But that's really a minor complaint. I benefited from reading this book. It's an interesting and thoughtful contribution to the issue of economic growth (and by extension to international trade and economic aid to developing countries), and I strongly recommend it.
Customer Rating:
Summary: Society and Economic Growth
Comment: Friedman explains how growth is good for promoting a freer, more tolerant and open society. The author gives good reasons for defending growth as the major objective of any government.
Customer Rating:
Summary: Interesting Thesis, but overlooking some important points
Comment: Mr. Friedman's book begins with an interesting thesis, defining morality and its definition within a context of economic growth. The idea that economic growth or stagnation effects the mindsets of the people living in that time period is a logical argument that Friedman often well supports with historical facts. However, the exceptions to his argument make me wonder if he really believes in his own thesis, or if he just felt the need to write a book. Furthermore, for every chapter in the book, there seem to be at least one or more flawed arguments or points that, with a little thorough thought or research, don't make sense or can easily be disproven. With these things being the case, I find Friedman's argument a little hard to buy. The entire book seems to build up to the final chapter, which Friedman uses to make policy recommendations that would aid in economic growth; this final chapter could have stood alone from the book entirely, however, because the evidence in the book an his arguments elsewhere in the book (ie. the importance of education) do not add or support his final policy recommendations. His policy recommendations could have easily been listed by students in an economics class as responses to the question "What should the government do to promote economic growth?" They don't push the argument forward or indicate anything that hasn't already been suggested in the past, nor do they give suggestions as to how to go about implementing his policies.
Customer Rating:
Summary: Puzzling
Comment: Friedman begins with a few troubling statistics, particularly the fact that except for a brief period in the late 1900s, most of the fruits of the last three decades of economic growth in the U.S. have accrued to only a small slice of the population. Further, after allowing for higher prices, the average 2004 worker in an American business made 16% less each week than 30+ years earlier. With more and more two-earner households and more individuals holding two jobs, most families' income have more than held their own. But nearly all the gain in the last three decades came only in the late 1990s. Young men entering the American job force in the 1970s started off earning two-thirds more, on average, than the generation starting out in the 1950s; by the early 1990s it was one quarter less than their parents.
Economic growth positively affects the character of the society as a whole, and because neither tolerance nor democracy is a good that private markets value, there is a role for government measures to seek growth beyond what the market would provide on its own. Improved transportation, crime reduction, safety from external attack, savings, education, and patent protection are examples of valuable government contributions.
Friedman asserts that declining investment is a problem in the U.S., and blames it on increased current consumption and government borrowing. (But what about the fact that much cheaper labor is available in Asia?) He goes on to posit that chronically large deficits' depressing effect on America's investment probably received a greater spur from change in the tax structure than the positive aspect of the tax reductions.
Friedman suggests improvement that begins with undoing the Bush administration high-end tax changes that provided 60% of the benefits to the top 10% (earning over $120,000) to reduce the deficit and improve society.
Fireman, like many others, very much wants to improve American education. He begins by focusing on improving the high school graduation rate - stable at about 90% over the last several decades - through more spending. (Friedman, however, forgets that enormous increases in inflation-adjusted per-pupil spending also occurred during this period, and that dropout rates closely correlate with race - ergo, positive home influence is probably a much more potent lever.) More government support for college education is also highly recommended because their incomes average some 70% more than those without a college degree. As for class sizes, Friedman is aware that most quality research has found reductions do NOT improve pupil achievement; nonetheless he suggests reductions would improve graduation rates, though the sources he cites seem to confound race and socio-economic status with class size as influences. He also supports competition within education, citing several inner-city positive examples such as Harlem Community Schools.
Another significant recommendation is raising the Social Security retirement age.
What is puzzling about "The Moral Consequences of Economic Growth" is that Friedman does not address a major issue of today's economic growth - the impact of free trade and illegal immigration on American incomes. Also, his treatment of economic development and population growth on environmental impacts is overly optimistic. These issues seriously limit the book's contributions.
From the author of Day of Reckoning, the acclaimed critique of Ronald Reagan’s economic policy (“Every citizen should read it,” said The New York Times): a persuasive, wide-ranging argument that economic growth provides far more than material benefits.
In clear-cut prose, Benjamin M. Friedman examines the political and social histories of the large Western democracies–particularly of the United States since the Civil War–to demonstrate the fact that incomes on the rise lead to more open and democratic societies. He explains that growth, rather than simply a high standard of living, is key to effecting political and social liberalization in the third world, and shows that even the wealthiest of nations puts its democratic values at risk when income levels stand still. Merely being rich is no protection against a turn toward rigidity and intolerance when a country’s citizens lose the sense that they are getting ahead.
With concrete policy suggestions for pursuing growth at home and promoting worldwide economic expansion, this volume is a major contribution to the ongoing debate about the effects of economic growth and globalization.
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