ISBN: 978-0-69124-762-5

Karl Ove Moene

University of Oslo

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Writing in a personal style for a general audience, economist Angus Deaton (Nobel Laureate, 2015) reflects on economic and political developments in America. Why did things go so wrong in the land of inequality? Is the decline the fault of economists? Conventional economics, he claims, favors capital over labor, prioritizes efficiency over equality, and ignores power differences. Economics thus bears some responsibility for the decline in living standards. White working-class people drink themselves to death and overdose on opioids as lack of jobs and family breakdown trigger a deadly despair. The development is a reminiscent of the fate of black Americans in inner-city areas in the 1970s and 1980s. Conservative economists are intolerant of new findings of how, for instance, higher minimum wages cause a rise rather than a decline in employment. How could the best scientific journals publish such rubbish, the critics insinuate. The American economy moves towards monopolistic concentration of power and thus away from liberal democracy, he fears. Modern anti-Keynesian macroeconomics is a step backward and a sign of how modern economics has detached itself from its old foundation: the study of social welfare and the causes of poverty. One should listen when an old dog barks. Deaton barks softly but is surprisingly critical to be a good old bourgeois economist – neoclassical from head to toe. Much in the book is controversial, but everything is not equally original. Yet it is important who says it and how –modestly, elegantly, and credibly. Behind his formal facade – with his well-known bow-tie – there is a warm heart and a cool critical head.