16 of 16 people found the following review helpful
on 9 February 2014
A disclaimer: I know the author. He has written several other books, is an experienced professor (now Emeritus) in a world-class university, and has done not only serious analytical work but also well-grounded research in a large number of countries. Anyone who feels it is necessary to follow Prof. Weeks arguments at a more sophisticated level, rehearsing equations and complex mathematical diagrams, may prefer to read “The Irreconcilable Inconsistencies of Neoclassical Macroeconomics: A False Paradigm”. One will then reach the same conclusions and will perhaps feel reassured that such conclusions are rooted in rigorous analysis. But one way or the other, at the end of the day one should be able to understand how our societies are organized around economic forces that are not only unjust but also irrational. This objective is neatly achieved with ‘Economics of the 1%”.
The book covers a great deal of material, some of which may seem intricate a-priori, such as finance, competition, the causes of inflation, laws of supply and demand, equilibrium, labour ‘markets’, unemployment, trade, government deficits, etc. As one reads, it is inevitable to wonder: why things that turn out to be so obvious remain so obscure or distorted in the way they are referred to by commentators and policy-makers? Indeed, a most salient aspect of this book, as compared to other critical books elsewhere (even from the same author) is its success in demonstrating that such a distortion of the economic facts of our lives is entirely ideological, and that an elite out there, “the 1%” happens to benefit from the way things are.
This book can help anyone see that things need not be this way, that there were many instances in the history of our societies in which things were handled differently, and that we can also do things differently now.
12 of 12 people found the following review helpful
on 20 February 2014
Six years into the Great Recession and the teaching of economics appears to have hardly changed. Hence students are told that the road to recovery lies in better ‘prudential governance’ in the private sector, or that we must ‘squeeze our belts’ and atone for our past sins by enduring government-imposed austerity, or that what is needed is a ‘freer market’ and ‘more competition’ and so on. John Weeks, professor emeritus at SOAS, has written a clear and timely book which argues that much of conventional economics as taught in universities is bogus---that it provides a largely impenetrable jargon-ridden shield for defending the interests of the elite against the vast majority of ordinary citizens. This is a book which is aimed specifically at the non-economist. It should be read by anyone interested in how the world really works and why so many economists have got it so wrong for so long.
Prof George Irvin
10 of 10 people found the following review helpful
on 10 April 2014
He exposes the mythology used in all mainstream discussion and journals and standard economics textbooks to justify economic policies of austerity that use as their foundation stone the myth of 150 years ago that full employment is the norm. He coined the term "fakeonomics" for this. When the economic facts of life cited in the book show no connection to these policies working except to enrich the top 1% it really is time to start the study of economics with a new foundation stone and definition: quote: the study of the causes of the underutilisation of resources in a market society, and the policies to eliminate that resource waste for the general welfare".(page 194) is suggested.
That can invigorate new thought and re-invigorate economic policy to place full employment as a core target and "the general welfare of society" as a another.
Examination boards should read this and act instead of brainwashing economics students with the equivalent of alchemy or astrology to prepare them for influencing their future society's economic and environmental well-being.
6 of 6 people found the following review helpful
on 29 March 2014
An excellent book, hence 5 stars, but the kindle version is unreadable as it is in a PDF format. I hope Amazon sorts this out soon. I went and bought the paperback version as well and it is a very good book.
2 of 2 people found the following review helpful
on 9 February 2015
Weeks demolishes the current economic orthodoxy with persuasive argument and exemplification and demonstrates with an acerbic wit, that had me almost laughing out loud, the absurdities of neo-liberal economics. Unfortunately, the dominance of neo-liberalism is no laughing matter as it has led over the past few decades to stagnating real wages, huge inequality in the US and UK, the enrichment of the 1% to the detriment of the 99% and the adoption of the appalling austerity policies which have heaped the cost of the financial crisis onto the taxpayer while allowing those who caused the crisis to continue creaming off their millions from the rest of us.
Weeks quotes both Marx and Keynes as well as Smith as he develops his argument (does anyone in an economics department remember Marx?), while excoriating Friedman and his acolytes for what he calls "Fakeconomics", yet despite an impressive list of reviewers agreeing with him, including an EC Commissioner, I don't think anyone is really listening, certainly not the ECB, Merkel or Osborne. Fakeconomics is too deeply entrenched, there are too many vested interests, both in economics departments as well as governments, big business and finance who have too much to lose from a return to sanity and greater equality.
1 of 1 people found the following review helpful
on 19 December 2014
I found the book very interesting, but not as clearly presented as others covering the same theme. It succeeds, however, in showing how politics and economics have become enmeshed resulting in distortions of the truth greatly biased towards the rich. The poor, unlike the rich, can not avoid taxation as it is taken at source. The rich elite can use tax loopholes, financial wizardry from experts and offshore accounts to name but a few of their opportunist measures to feed their desire for both wealth and its concomitant power.
Statistics in the hands of someone intent on deception can be used very persuasively to change discredited policies and for example show averages, which effectively avoid demonstrating how the poor are greatly disadvantaged in every way while the real wealth of the rich is deftly unmentioned. Greatly discredited Milton Friedman's economics has insidiously supplanted the economics of John Maynard Keynes - leading to a massive transfer of wealth from the lowest echelon of society, and more recently, middle classes as well towards the enrichment of the elite 1% as financial regulation is totally abandoned and government services are severely curtailed to balance the cooked books. Such gross inequality must inevitably lead to tyranny if left unchecked.
on 6 April 2015
John F. Weeks is Professor Emeritus of Economics at the School of Oriental and African Studies, University of London. With biting wit he exposes capitalism’s fallacies and demolishes the lack of logic behind ‘austerity’ policies, free trade and the euro scam. He proves that capitalist economies serve the richest one per cent at the expense of the rest of us.
He notes, “Opposing public regulation on the argument that markets operate efficiently ignores their social nature. It is the equivalent to arguing that doctors and medicines are unnecessary because the body is a perfect regulator of itself. Opposing regulation in principle endorses in practice the freedom to cheat and defraud – freedoms that no stable market society allows.” As he comments, without regulation “banking transformed itself by legal means into a disastrously parasitic and viral vehicle for profit taking and global instability.”
The modern banking system caused the crash, which in turn caused the post-2008 deficits. The bankers’ slump cut tax revenues and higher unemployment increased welfare spending.
Do deficits increase the cost of public borrowing, as the government claimed? No, from late 2008 to the end of 2011, borrowing was only once less than £20 billion a month and often more than £35 billion, but the public sector borrowing rate stayed at 0.5 per cent.
Weeks sums up, “A bit of common sense and real economics, not fakeconomics, allows a simple assessment of UK public finances. First, the post-2008 deficits resulted from recession, not reckless or feckless spending. Second, deficits did not and would not provoke speculative attack either on public bonds or the UK pound. Third, no expenditure cuts were necessary for ‘sound public finance’. On the contrary, rational policy would bring more expenditure, to stimulate the private economy to recover.”
So we needed not ‘austerity’ (poverty) but more public spending, to make up for the private sector’s failure to invest. Instead, George Osborne cut spending and now claims that a pre-election property boom will bring recovery.
But a consumer-led recovery is impossible. Where would this extra household spending come from? It could not come from savings because our savings rate is only a paltry 6 per cent of GDP. It could come from borrowing, but extra borrowing brings slumps. US household debt was 90 per cent of household income in 1990; by 2007, it was more than 160 per cent. Private debt is bad because it cannot increase investment. But public debt is good when the borrowing increases investment to produce more growth.
Turning to the eurozone disaster, Weeks points out that its cause lies in Germany not in the EU’s weaker economies. He writes, “The fakeconomics narrative tells us that inefficiencies generated by the welfare state caused the euro crisis, and the solution required public sector spending cuts. In reality German trade policies caused the euro crisis. German mercantilism provided the ‘backstory’ of the euro crisis, a beggar-thy-neighbor trade policy. Through tight monetary and fiscal policy combined with wage restraint, the German government successfully achieved export-led growth. No need to be an expert in economics to know that export-led growth by one country will result in import-led recessions for the trading partners when global demand declines, as it did after 2007.”
Greece’s public spending did not cause the crisis. In 2007 German workers worked fewer hours a year than Greek workers. Germany’s social spending was more generous than that of Greece, Portugal, Italy, Ireland or Spain. Germany’s public debt was larger than Ireland’s or Spain’s.
All countries cannot simultaneously achieve export-led growth. The euro was supposed to end ‘beggar-thy-neighbour’ policies, in fact it fuelled them.
He shows how the EU’s capitalist mantra of free trade is part of the problem, not the solution. He cites a 1999 World Bank study: “Trade liberalization is negatively correlated with income growth among the poorest 40 per cent of the population, but positively correlated with income growth among the higher income groups. In other words, it helps the rich get richer and the poor get poorer.” Greenpeace, after noting that globalisation ‘usually benefits the larger, wealthier countries’, opposed other countries protecting themselves against it.
Neither domestic consumption nor foreign demand can pull us out of the slump, which leaves only business investment and public spending to do the job. But if we could rely on business investment, we would not be in a slump in the first place. Slumps occur because business optimism and investment collapse. But instead of investing, the capitalist class has been taking the money and running away with it to tax havens. In the USA, dividends paid to stockholders accounted for 65 per cent of corporate income in the 2000s, up from 39 per cent in the 1960s. It is a similar story here.
To achieve a real recovery, we need a state that will invest in rebuilding our industry. But the one per cent, the ruling class, opposes this. How long are we going to let them stand in our way?
2 of 2 people found the following review helpful
on 17 August 2014
only half way through reading it . confirms my suspicions ,vive la revolution :)
1 of 1 people found the following review helpful
on 22 November 2014
the only economics book you will ever need to read. a comprehensive angry blast at all the jargon based experts who simply cloud the waters. brilliant book, read it pass it on.
on 18 February 2015
Ever felt that most politicians & media talking heads are babbling nonsense about a fantasy world that none off the rest of us are part of? This book proves that you're right - and they are. You, my fellow member of the 99%, are sleep walking through a smoke & mirrors daydream of austerity chic that was invented by right wing reactionaries to further their own interests - and destroy ours. John Weeks' passionate but authoritative words are our wake up call