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17 of 17 people found the following review helpful
4.0 out of 5 stars Comprehensive and comprehensible
We have all heard the arguments about how fair/unfair the tax system is. Lansley doesn't go there. Wisely, in my opinion, because most of us have already got fixed ideas about that.

The strength of his book is that it takes a new angle, namely, that inequality stops a free enterprise system from working properly. His target is workability, not morality. He then...
Published on 25 Jun. 2012 by Mr R A Forde

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19 of 22 people found the following review helpful
3.0 out of 5 stars New ideas for liberals
Usually progressives don't like free markets because, they say, they are often unfair to the weak and cause high degrees of social inequality. Free-marketeers retort there's no other way to efficiency, so everybody is due to become better off at the end of the story. In this readable book British economist Stewart Lansley explores and summarizes a new set of ideas: too...
Published on 16 May 2012 by S. Hare


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17 of 17 people found the following review helpful
4.0 out of 5 stars Comprehensive and comprehensible, 25 Jun. 2012
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We have all heard the arguments about how fair/unfair the tax system is. Lansley doesn't go there. Wisely, in my opinion, because most of us have already got fixed ideas about that.

The strength of his book is that it takes a new angle, namely, that inequality stops a free enterprise system from working properly. His target is workability, not morality. He then shows that it isn't new. The same arguments were being made years ago, and it was only when they were heeded that the recovery from previous great depressions began. Lansley doesn't rely on rhetoric, however: he presents plenty of cogently-argued evidence that the same conditions which produced the Great Depression of the 1930s were also visible in the 2000s. What's more, many people saw it and warned what was to come. The politicians put their hands over their ears and refused to listen, like an over-excited child who's been told it's bedtime.

The fact is that if too much wealth is held by the super-rich, they don't do anything productive with it. No one can spend that much on consumables, so they spend it on pushing up the value of van Goghs and on financial speculation. That accumulates even more money, but it doesn't produce anything. The squeeze is on the rest of us. This argument is very similar to that of the Patriotic Millionaires in the USA, who argue that they should be taxed more in order to leave less well-off people more free cash. What creates jobs and new businesses is ordinary people having money to spend. That's what creates demand, and without demand there can be no growth. It remains to be seen whether "quantitative easing" will make any difference, but my hunch is it won't, because the money goes where the money already is, not into demand.

Sounds simple? It is. Everyone should read this book.
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29 of 30 people found the following review helpful
5.0 out of 5 stars A Must Read, 1 Nov. 2011
This is a must read book. Beautifully written, the author has made economics enjoyable and easy to understand. The book demonstrates that excessive profits over wages and vice-versa will result in an imbalance in the fragile working of the western economic model and lead to the dire consequences of the 1930s, the 1970s and more recently since 2007. The book has many examples of how the greedy 1% seek to invest in high risk financial instruments, despite their wealth generating the highly volatile speculation which the City of London facilitates to the detriment of the other 99%. Whether you agree of disagree with the arguments in this book, it is a great read and highly recommended to anybody who is at all interested in the current state of world economics.
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9 of 9 people found the following review helpful
5.0 out of 5 stars The Cost of Inequality, 10 Aug. 2012
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This review is from: The Cost of Inequality (Paperback)
This book isn't as 'high brow' as I had feared and explains quite clearly how and why the economy is up and down like a yoyo. It also paints a very grim picture of the greed of those at the top - and the outcome of this greed on those at the bottom. That those with so much can still want so much more is very sad, especially when to get it the ordinary working person is sacrificed. I now understand what hostile take-overs are and why jobs are 'shed' in the name of profit. This book won't make me an economist, but I now have a better grasp of what goes on in the world of big business.
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14 of 15 people found the following review helpful
5.0 out of 5 stars the cost of inequality --stewart lansley., 21 Nov. 2011
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Dr. Colin (North Devon) - See all my reviews
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A superb review of the power and importance of money in the world today.
As someone curious, but almost totally ignorant of the factors involved, it has given me real understanding of the current global economic crisis.
Credible measures to try to tackle the crisis are suggested.
A compusory read for all thinking people.
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2 of 2 people found the following review helpful
5.0 out of 5 stars Superb use of facts and figures to tell the undeniable, 15 Feb. 2013
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This review is from: The Cost of Inequality (Paperback)
This book is one of the first I've read on economics that seems to make real sense. The author has a clear understanding of the issues facing capitalist societies. The simple fact that having large amounts of wealth siphoned from the economy by being held by the few means that the rest haven't got as much money to consume. The result of this is that consumer societies like our own just can't function properly. Stewart's message really does need to start getting to a wider audience and when I say a wider audience I mean those who are supposed to be running our country!
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2 of 2 people found the following review helpful
5.0 out of 5 stars In The Shadow of Economic Inequality, 28 May 2013
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This review is from: The Cost of Inequality: Why Economic Equality is Essential for Recovery (Kindle Edition)
A well presented argument that brings together, analyses and explains many strategies and situations about which, I, for one, have been concerned for many years. The book is worrying inasmuch that it demonstrates how power and greed conspire to ignore the indications of a bleak future and also, with misguided political connivance, how these traits have catapulted what should be a service industry to the position of the major player. Unfortunately, this player is parasitic and has all but killed off the real economy.
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31 of 36 people found the following review helpful
4.0 out of 5 stars Well-researched study of capitalism's failure, 2 Feb. 2012
By 
William Podmore (London United Kingdom) - See all my reviews
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This excellent book looks at how huge and growing inequality affects Britain's economy. It complements Richard Wilkinson's splendid The spirit level, which looks at inequality's moral and social effects.

Since 1980, Britain has had three recessions, 1980-81, 1990-91 and 2008-09, in which output fell by 4.7 per cent, 2.5 per cent and 6.4 per cent.

These crises resulted from worsening relations between the classes: Thatcher's attack on the working class cut wages, causing a fall in demand. Inequality is not the cause of the crisis: it is an effect of the current state of the class struggle.

As two IMF economists, Michael Kumhof and Romain Rancière, wrote, "The crisis is the ultimate result, after a period of decades, of a shock to the relative bargaining powers over income of two groups of households, investors who account for 5 per cent of the population, and whose bargaining power increases, and workers who account for 95 per cent of the population (and whose bargaining power has fallen)."

The ruling class, primarily its financial component, loot the productive economy. We, the vast majority, suffer a slump. Since 2005, our living standards have fallen every year. The Office for Budget Responsibility forecasts that our real take-home pay will keep falling till 2016 at least.

Thatcher's hero Milton Friedman said in 1980 that Britain's industry should be allowed to fall to bits. Financial services would fill the gap. Thatcher embraced this view and enforced it. Labour followed Thatcher.

Thatcher removed lending controls, enabling the growth of credit card companies, loan companies and building societies turned banks. But between 1979 and 2009, financial services generated only 140,000 new jobs.

It is not that the state is `crowding out private endeavour', as Osborne claimed, but finance is crowding out industry. In Britain, the economy grew by 2.2 per cent under Thatcher and Blair, by 3 per cent between 1950 and 1973, pre-Thatcher.

Between 2000 and 2008, Britain's real growth rate was not 3 per cent a year, but 1.5 per cent. 1.5 per cent was Brown's bubble borrowing. Between 2000 and 2007 consumers' spending grew by £55 billion more than their income. A rise in debt means creating money without wealth.

Finance grows from debts and fees. If a typical British and a typical Dutch person save exactly the same amount for their retirement, the Dutch person will get a 50 per cent larger pension. When we are sold pensions at a charge of 1.5 per cent a year, this will mean 38 per cent of our possible income being lost to fees over the lifetime of our pensions.

British companies invest less in R&D than their competitors. In 2005 they spent £17 billion on R&D, but between 2000 and 2008 they spent £86 billion a year on mergers, which destroy wealth and jobs, but paying vast fees to those who financed the mergers.

Between 1999 and 2007 domestic bank lending tripled, but their lending to manufacturing halved, to just 2.4 per cent of all loans: £1000 billion went to property investment, just £50 billion to manufacturing. Between 2008 and 2010, banks doubled the rate of interest they charged on loans to small businesses.

In the first half of 2010, Britain's top five banks made £15 billion profits (largely by financing mergers). But they lent less than they got in repayments. In 2009 Barclays paid £113 million corporation tax on record profits of £11.6 billion - a 1 per cent rate! Also in 2009, 300 staff at government-owned RBS got more than £1 million each.

New rules, Basel-III, drawn up by bankers, impose tighter controls on banks, but won't be implemented till 2019 and won't prevent other crises, according to Mervyn King. As he said, "Of all the many ways of organising banking, the worst is the one we have today."

Lansley rightly urges the need for a National Investment Bank to provide affordable loans and grants for industry and infrastructure projects. Of course, the EU would try to stop us creating such a bank.
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19 of 22 people found the following review helpful
3.0 out of 5 stars New ideas for liberals, 16 May 2012
By 
S. Hare (Rome, Italy) - See all my reviews
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This review is from: The Cost of Inequality (Paperback)
Usually progressives don't like free markets because, they say, they are often unfair to the weak and cause high degrees of social inequality. Free-marketeers retort there's no other way to efficiency, so everybody is due to become better off at the end of the story. In this readable book British economist Stewart Lansley explores and summarizes a new set of ideas: too much inequality leads to heavy losses of efficiency, so in the end it is harmful to all. Profits and very high incomes that outstrip productive investment opportunities lead to an overgrowth of finance; and financial instability now risks throttling productive capitalism. Lansley is no enemy of free markets; he only wants to show they work better if carefully regulated towards fairness.
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2 of 2 people found the following review helpful
5.0 out of 5 stars Read this and you will understand contemporary Britain., 7 Feb. 2013
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This review is from: The Cost of Inequality: Why Economic Equality is Essential for Recovery (Kindle Edition)
This book has put into words exactly what is wrong with our country today. It explains why we are a deeply unjust society and why unless we get a government with the will to roll back inequality things will only get worse. It should be required reading for every MP regardless of party.
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4.0 out of 5 stars The super rich as cause and symptom, 15 Mar. 2014
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This review is from: The Cost of Inequality: Why Economic Equality is Essential for Recovery (Kindle Edition)
In “The Cost of Inequality” it's revealed that income inequality causes economic instability. This ought to be a blow against advocates of financial deregulation, who might be sanguine about a greed culture in society, normally, but who might learn instead that the market behaviour that they hold up as a liberation and mark of progress, was the prime mover of the economic malaise they had always been fast to pin on government intervention.

The superrich, instead of being a consequence and by-product of the finance capitalism might be an actual cause of the squeeze of the middle quartile of earners, the pauperisation of the vulnerable; and the dynamic of concentrated money wealth working against the interests of a productive economy, denying it investment, no trickle down from it worthy of the name for jobs, leaving incriminating dabs on the ailing body of the economy today that freemarket apologists would rather were not there. The principle metric or symptom of malaise is the gap between the new elite of the superrich and 95% of the rest of the population.

The first chapters take a look at the record since liberalization of the markets.

Lansley compares the 1945- 1973 Golden Age of managed capitalism (and state intervention) with free market finance capitalism. Productivity turns out to have been as good during the Golden Age as it would be after the Big Bang (1986), a ground-breaking time when Thatcherism liberalized markets and should have ushered in a business environment that could then flourish for the benefit of all.

The problem would not appear to be wealth creation but wealth distribution, and the Anglo model has had an unfortunate unintended consequence that it certainly has not, like a rising tide, lifting all the boats according to the promise of free marketer gurus were making in the 80s, in defence of the unfettered wealth creators.

The raison d’etre of finance capitalism was that investment would be directed to businesses with an unsurpassed efficiency. This would auger a future of unlimited growth, with boom and busts a thing of the past. Yet the promise has failed to deliver, with a quickening pace of crises as well as the later ones being more severe since the 1980s, culminating in the 2008 Great Depression. When the storm cleared, the structural changes of finance capitalism revealed two economies: a productive one and a money economy that only served a superrich clientele of offshore investor and their money men. This redistribution of national wealth indirectly contributes to pathological economics.

In Lansley’s book, his scrutiny is on the risk taking in banking and pensions funds, and upon a City culture prioritizing shareholder value above all else so that the role of the financial sector would become corrupted and unfit for its purpose of serving a productive economy through providing small business with loans and credit . A boss' bonus structure rewarded short-term returns and maximisation of shareholder dividends and paradoxically the casino of derivatives and mortgage backed securities trading was more attractive than what should have been solid dependable loans to companies in the medium to long terms creating jobs, contributing to GDP and providing fair returns for investors .

The conditions were perfect for the financial euphoria long ago identified by JK Galbraith, who wrote pithily of the inevitable bubble bursting and as a rule the short memory of the financial institutions about every previous crash and the conditions which had brought them identically about.

On the micro-economic stage, private equity firms activities in acquisition and mergers were promised to improve the efficiencies and productivity of businesses, but Lansley paints the picture of businesses emerging from the process asset stripped, paying rent for property assets they once owned, and so dubiously fitter. In the case of Debenhams, if there were winners of removing a public company into private ownership, they didn’t include the many employees who were made redundant. It gives the lie to the metaphor of ‘usefulness’ ascribed to private equity firms and the hedge funds.

A wash of cash from China started the investment and led to the property bubbles and market euphoria, and conditions encouraging financial institutions to lose their understanding of complex products and fail to impose self-regulation.

But Lansley’s main observation of the social effects is about the widening of the inequality gap and its endangering democracy when individual wealth can attain such disproportion as to have political and economic consequences.

In the end, there comes a warning. A dysfunctional finance sector offers a prescription for future credit bubbles in the markets and crashes, of greater frequency and severity than even the Depression of 2008.
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