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on 10 November 2014
In these hard-hitting comments, Paul Craig Roberts is searching for the truth on the economic, social and political front in his home country, thereby contesting the vision of other economists on such fundamental notions as growth, market capitalism or free trade.

Economics
As the author states, the notion of economic growth should include its ecological and social costs (depletion of natural capital and pollution), which are perhaps larger than the value of production increases.
Market capitalism means profit maximization and globalism, the latter being a shield for the pursuit of absolute advantage, which is the antithesis of free trade.
Markets are not self-regulating. They created ‘too big to fail’ financial institutions, which provoked an implosion of the whole system.

Social issues
A ‘free market’ system is in no way socially efficient: in the latest financial disaster, up to 16 trillion US $ were needed to bail out US and foreign banks (their shareholders), while nothing was done to aid the millions of US families who were foreclosed out of their home.
Profits are not a measure of welfare. To the contrary, they are creating unemployment by joboffshoring and a decline of the living standard of nearly the whole population. The US unemployment rate is actually between one-fifth and one-fourth of the work force, not the officially published rate.

Political and financial issues
The US population lost its representative government and its civil liberties. Its government is only accountable to the mega rich.
The US budget deficit can easily be resolved by ending (illegal) wars, by closing military bases overseas and by cutting the defense budget. But, this means that the US must give up its goal of world hegemony.
For the dollar, the author asks: how long can the US retain the reserve currency role, when its economy doesn’t make things to export, when its work force is employed only in domestic services and when its foreign creditors own its assets?
Internationally, P. C. Roberts suggests that Germany with its industry, technology and financial rectitude should leave the EU and enter a partnership with Russia (energy and raw materials).

Some remarks
For the social issues, some of the author’s comments are correct for one country in particular, but not strictly exact on a world level: job arbitrage (offshoring) is positive for the country which gets the jobs (locally and by emigration).
P. C. Roberts exposes Keynesianism as a monetary policy: an expansion of the money supply by the government. But, this is not the end of the story. A government has to use the money, either through its own channels (its bureaucracy) or through private subcontractors.

This outspoken book is a must read for all those who want to understand the world we live in.
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TOP 500 REVIEWERon 17 May 2014
This important book criticising the laissez faire capitalism of the last couple of decades is written by an assistant secretary of the Treasury under President Reagan and is one of the architects of Reaganomics.

I think that's important because its criticism of capitalism is coming from the political right and not from someone with long-standing views.

Another reviewer is correct. There is a long introduction by someone else for the German version served up to us on amazon.co.uk. My advice is to skip it and start with the book written by the author because you won't have any trouble understanding the stories based on America.

The book is a little repetitive and in need of an effective edit anyway but ignoring the introduction will help get to the core of the matter.

What we've seen is the creation of global corporations that are effectively outside the scope of political influence because there is no global government to stand up to them. In fact it's worse than that, these corporations have the means to twist policies in their favour.

Our economic models, taught at universities and practised by central banks and governments, don't properly incorporate the effects of these changes. This leads to a misleading narrative about what is good and bad in the media.

By pursuing strategies to move production and services offshore to low cost countries, these corporations have managed to enhance their profits by dumping enormous costs on society. The USA (and the UK and parts of Europe) has been hollowed out with middle income jobs transferred overseas. Unemployment increases and the traditional economic levers no longer work because the capacity for the jobs no longer exists. Increasing aggregate demand using traditional Keynesian policies pushes a share of the added value abroad so the benefits leak from the economy while the debts build up.

Jobs that are created in our newly modelled economies are often part time, lowly paid and support what the author calls non-tradeable services. Government employees, shop assistants, hairdressers, care workers can't help the economy export and earn the money needed to pay for the imports.

This is important. The tradition support for free trade in classical economics comes from David Ricardo, an early 19th century economist who developed the theory of comparative advantage. He argued that because Britain was better at producing textiles than wine and because Portugal was better at producing wine that textiles, both economies would gain by specialising in what they did best and trading.

The logic was impeccable in a simple two product, two country example. It falls apart as things get much more complicated. It's entirely broken when you look at offshoring of processes. That's no longer trade but labour arbitrage.

This book helped to bring together a lot of uneasy thoughts I've had over the last 15 years or so. I'd accepted the idea that free trade was good and that whilst we lost jobs, we benefited from buying consumer products at prices that could never be achieved with UK production so that meant our incomes bought more.

What I hadn't thought about was the remorseless process that is occurring as more higher paid jobs are offshored. The political talk about specialising in complex engineering and technology is nonsense when you think about it properly and look at education standards. Chinese and Indian software developers are still a fraction of the cost of those who live in the developed countries.

I recommend this book to help you understand the problems. It does get a little paranoid in places as it rages against a political executive that is remorselessly gaining powers and spying on the general public but these things are happening. It may be naive to believe that it will be used for general public good rather than just the good of the elite.

The book doesn't point to solutions. Should globalisation be stopped and could anyone stop it anyway? Do we want a world government to stand up to global corporations and stop them avoiding taxes? is protectionism a valid solution anyway.

The answers need another book and may have to be written by another author. At least the book helps you to focus on the big underlying problems.

About my book reviews - I aim to be a tough reviewer because the main cost of a book is not the money to buy it but the time needed to read it and absorb the key messages. 4 stars means this is a good to very good book.
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on 27 August 2015
Really excellent and must read book. Economics can be argued so many ways that it's a gift to the ruling class who can always find court economists to bestow academic credibility on any devious scheme the former invent for their own purposes.

The entire current conventional Western package of economic policies is a giant lie pretending to be there to benefit the people when it's really there to create a wealth transfer to the rich. Immigration and free trade are simply cheap labour rackets which have nothing to do with improving economic efficiency is what PCR is saying. The EU is a power grab by the unelected.

One wonders how long before the penny drops with all those workers whose living standards have stagnated or declined while they are told how lucky they are. Graduates doing unskilled work while a tale about 'skills-shortages' is endlessly repeated, vast numbers of adults living with their parents who once would have bought a home, former factory workers fallen into poorly paid work if they can get any, and the whole contraption propped up with debt.

If you wish for a graphic illustration as to how the people are lied to, then the book is worth it just for the charts at the end showing how little the US economy had recovered several years after the crash when the manipulated official statistics issued are adjusted to reflect reality.
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on 8 January 2014
Paul's thesis is that currently applied economic theory does not fit todays world. Offshoring jobs in the name of "Globalism" is crippling the US economy. To boost executive pay, low and middle class jobs are being relentlessly sent to India, China etc. The US economy is in it's death spiral now, they cannot afford to pay the interest on the debt and print a trillion a year to stay afloat. Paul and other right minded economists have tried to turn the "ship" around before, but are defeated by the economic mindset that supports the one percent taking all the money. Average income is down 10% over the last ten years in contrast to the ballooning wealth of the rich. Check PCR's interview with Corbett Report May 2013.
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on 8 November 2013
This a great summary of the current malaise in world economics and an insightful commentary on the base motivations and flawed systemic thinking that governs the current world systems. For those new to the subject and not into conspiracy thinking it will be an "eye opener".

Although a great treatment of the "as is" I feel that the book lacks a little of the depth of comment needed on the change that is required to remedy the current system. In particular whether or not the Fractional Reserve Banking system should now be rethought by evolutionary morphing into a new system based on new principles. Many others have written on this but foundational change needs to be set out by these authors and communicated to the "layman" so that in today's political climate the masses continue to have their say on informed change.
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on 13 August 2013
I follow Paul Craig Roberts a lot. This is the first book of his that I have read. I have to saw it was an easy book to read, technical at times but offering really good critique of how we got into this mess and how out of control banking became. The most interesting part I found was explaining the game played on Greece. He explains that really well and had opened my eyes on the sovereignty problems of the EU, the debt and what the REAL moves are by these guys. Paul Craig Roberts is another Gerald Celente, he should not be ignored by us. Well worth a read!
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on 20 September 2013
Very authoritative and written by a highly credible author. Well informed. Quite US-orientated but can one transfer the message to other contexts. As a book, it probably needed one more editorial makeover because some of the material repeats almost verbatim in some places. Nonetheless highly recommended.
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on 8 November 2016
Amazing! Paul Craig Roberts is a great author. This book is simple to understand and helps you piece together ones complex topics of capitalism.
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on 27 October 2015
Bought as a gift for my man who reckons it was a good buy.
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on 21 February 2014
Covers a lot of different aspects on how Big Government has essentially sold the general population down the river over the years. If you've listened to Dr Roberts interviewed you'll probably know a lot of the back story already but certainly worth a read.
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