Paul Krugman is right that we are in the “dark ages” of economics. The wisdom of the ancients has been lost, but while mainstream economics operates under a presumed “law of supply and demand”, Krugman has acknowledged only that the wealthiest Americans do not live in a supply and demand world. Actually, Barry Lynn’s book, “Cornered: The New Monopoly Capitalism and the Economics of Destruction” (2010), demonstrates persuasively that no one does. How market economies work has been based on a fundamentally false perspective almost from the beginning. Today, monopoly profits rise rapidly to the top at everyone’s expense.
Inequality has risen rapidly because taxation of corporate profits and top incomes was severely reduced since our economy last prospered. This essay, originally posted over a year ago, explores the wildly divergent perspectives on taxation that result from the faulty mainstream, neoclassical perspective.
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(Illustration by John Berkerly for The Economist, July 16, 2009)
To understand how the rich and powerful managed to replace the “invisible hand” of the open market with the invisible fist of their autocratic institutions, we have to look beyond their co-optation of the word “market.” We must also look at the word they appended to it: “free.” It was the act of combining these two words into the term “free market” that transformed the market from a political tool that exists within human society into something that exists over and around human society, something that acts upon human society like a sort of mechanical god. – Barry C. Lynn
Apologies for the title, but I chose it to remind me of the emotional, and often fearful, component of intellectual thought.
Barry C. Lynn’s fabulous book (Cornered: The New Monopoly Capitalism and the Economics of…
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