-- by George Cooper
“The premise of this book is that the internal inconsistencies between economic theories -- the apparently unresolvable debates between leading economists and the incoherent policies of our governments -- are symptomatic of economics being in crisis, specifically a scientific crisis.”
-- from the book cover“A must-read”
-- The Economist
“George Cooper framed it so well in his book.”
-- Wall Street Journal
This book is interesting first due to its historical and innovative perspective. It also has a brief summary of the some of the competing schools of economic thought. Cooper asserts that economics is a broken science that now believes multiple inconsistent things at the same time. He refers to The Structure of Scientific Revolutions by Thomas Kuhn and to the ideas of Charles Darwin and William Harvey, the doctor to King Charles I, to suggest a better way to think about our economics.
Cooper states that “the problem for mainstream economic theory is that the experimental evidence is that the way we choose to arrange our societies has enormous influence on how our economies actually work. However, there is simply no coherent way to integrate this observation into the neoclassical paradigm.”
Cooper suggests a “paradigm shift” that involves “thinking of economic growth as being generated by a circulatory flow of wealth through society. In this model, wealth is moved up through the social pyramid by the activity of the private sector and is recirculated back downward via the activity of the state sector. Cooper describes this as a creative antagonism that lets us exploit the best of our competitive nature while managing the worst of our selfish nature.
I would observe that in Das Kapital (1867-1894) that Marx predicted the fall of capitalism.
Why didn’t that happen in the United States? It was in large part due to the political process of our constitutional democracy being able to both place regulations on laissez faire capitalism and achieve income redistribution with the 16th amendment (1913) and a tax code. In this context, Cooper’s suggestions look less like a paradigm shift than a recognition of the strength and balance of our constitutional democracy.
