Crown Business 2010. ISBN 978-0307590572
|There's a saying in Swiss
folklore that if you get lost in the mountains, don't try to find a new trail. Retrace
your steps until you find something familiar.
The author tries to do something similar with regard economics, looking at basic assumptions rather than fishing around in current theory.
He sees a big problem in Left / Right polarization but still concludes that at a basic level they both make important contributions. The Left is correct in that a united society has to respect its sick and old, and give children from every background the best opportunities. The Right is correct in that America was founded on personal responsibility with the rejection of a bloated and dangerous central government.
In reality Heath shows that the US and most other Western countries have developed a malignant form of both ideologies. The Left has extended costly government "care" to whole sections of the adult population that like it but shouldn't receive it. The Right tries to dispense with government all together and doesn't recognize that it is a vital framework for growth. Just because it's corrupt and inefficient doesn't mean that it isn't necessary.
The author is following the theme of his excellent earlier book, "Efficient Society" where he argues that societal/economic efficiency is not a Left/Right concept and is basically non-political. Your chosen system either gives you good value health care or it doesn't.
However there are some problems with the book:
Any known trail in economics leads to Comparative Advantage which the author supports, although probably a more valid view is expressed by Harvard professor Stephen Marglin (quoted in Paul Streitz's book "America First"): "First, we don't live in Ricardo's world, where trade is determined by fixed natural resources. In this world technology and capital are immobile: You can't move Portuguese vineyards to England, (top)
|nor can England's lush sheep
pastures survive in Portugal's climate. Today, technology and capital move almost as
easily across international borders as within a country."
In a world where new international competitors are quickly able to scale up
technology, capital and skilled labour ,Comparative Advantage starts to look like an
intellectual refuge for outsourcers. The reality is that the required average skill level
for American labour is falling fast with 80% of new employment in very low paying service