As its title suggests, in this book the authors attempt to contemplate on who should control your life, who should run the economy, or how laws should be based on. This is the never-ending debate on big government versus small government, Keynesianism versus Classical Economics, liberal democracy versus communism, dictatorship, monarchy you name it. For those who are curious how popular economics can change life, this book is best.
The time frame this book deals with is mainly during the Cold War, the confrontation between communism of Soviet Union and China and Western democracy. Key players include Margaret Thatcher of UK, Ronald Reagan of the United States, Gorbachev of the Soviet Union, Deng Xiao Ping of China and some leaders of developing countries trying to lift their country out of poverty. Nonetheless, what is more interesting is ideas behind those leaders. Those ideas are from mainly economists including Milton Friedman and F.A. Hayek, the latter’s name is quite uncommon to even economists.
Keynes lost the battle to Friedman and Hayek during the 1980s till 1990s at least in the United States and the UK. It was manifested that government cannot control the economy. The Fed could not and should not use its monetary tool to offset recession or create a free boom for the economy. Regulations hurt the economy.
The battle is not over. Reagan’s tax cut, for instance, is seen, for instance by a Nobel laureate in economics Joseph E. Stiglitz (Globalization and Its Discontent, and the Price of Inequality), as widening wealth gap between the rich and poor and hurt the economy. Recently, since Bush administration up until now, Keynesianism is prevalent in the Fed.
This book is so famous and influential that the U.S public media PBS made it into TV Show. I hope after reading and watching it, you will recommend it as a must-read book and/or must-watch show.
