Summary of The Dirty Secret of Capitalism and a New Way Forward

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The Dirty Secret of Capitalism and a New Way Forward summary
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The wealth gap is widening; while the bottom 50% of the US population has become $900 billion poorer over the past 30 years, the top 1% became $21 trillion richer. Venture capitalist Nick Hanauer, by his own estimation, isn’t just a member of the top 1% but also of the 0.01%. He suggests that while past policies worked for the broad public interest, the current economic system serves just billionaires and large corporations, a shift that is wreaking havoc on the middle class. He spotlights the faults with neoliberal economics and proposes a radical revision.

About the Speaker

Nick Hanauer is a business leader, entrepreneur and venture capitalist who vehemently opposes neoliberal economic policy.

 

Summary

Neoliberal economics breeds three false assumptions: that the market is an efficient equilibrium system, that price equals value and that humans are inherently selfish.

Neoliberal economics has been responsible for growing inequality in the United States since the 1990s. The paradigm, which benefits the wealthy at the expense of the poor, operates according to three fallacies. The first assumes that the market is an efficient equilibrium system – that is, for every action in the market, there is an equal and opposite reaction elsewhere in the economy. Thus, the theory goes, if wages were to rise, employment would fall because employers couldn’t afford to pay workers the higher rate and businesses would close. But when the minimum wage increased to $15 in Seattle in 2014, business boomed as more people could afford more goods and services, and unemployment fell.

The second fallacy of neoliberal economics is that


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