The Economists’ Hour

False Prophets, Free Markets, and the Fracture of Society

Little, Brown US, 2019

15 min read

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Globalization was inevitable, but the type of globalization that hollowed out the middle class wasn’t.

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In this insightful study of postwar economic orthodoxy, journalist Binyamin Appelbaum tells the backstory of how economists Milton Friedman, Arthur Laffer and other free market proponents captured the imaginations of Ronald Reagan, Margaret Thatcher and other world leaders. The results today, Appelbaum writes, are lower taxes for the wealthy and falling incomes for everyone else. His far-ranging analysis also explains why, for example, air travel now is cheap yet miserable, and why laid-off workers in the American Rust Belt will never again earn the incomes they enjoyed before their factories closed. Readers of all political and economic stripes will find Appelbaum’s treatise a sobering take on the modern economy.

Summary

From 1969 to 2008, economists espousing free market theories gained influence in Washington, DC, on Wall Street and around the world.

In the years after World War II, the US economy boomed, and policy makers drew up rules and regulated commerce with little regard for economic theory. However, when the boom subsided, the dismal science came to the forefront of fiscal management. Economists, most famously Milton Friedman and Arthur Laffer, proselytized against government intervention, urging politicians to open up markets, lower taxes and neuter regulations.

That approach bore fruit. With nations trading more freely and goods more readily available, living standards rose across the globe. Infant mortality declined in every nation in the world. But free market acolytes oversold the revolution. The rise of globalization and a harsher economic reality may have been inevitable, but the doctrinaire prescriptions doled out during “the economists’ hour” deepened the pain and accelerated the disruption. Despite America’s embrace of lower taxes and fewer rules, US economic growth has slowed steadily, from...

About the Author

Binyamin Appelbaum is an editorial writer for The New York Times who focuses on business and economics. He previously was a Washington correspondent for the paper and a reporter for the Charlotte Observer.

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