A Financial Times Book of the Year

“The strongest documentation I have seen for the many ways in which inequality is harmful to economic growth.”
—Jason Furman

“A timely and very useful guide…Boushey assimilates a great deal of recent economic research and argues that it amounts to a paradigm shift.”
—New Yorker

Do we have to choose between equality and prosperity? Decisions made over the past fifty years have created underlying fragilities in our society that make our economy less effective in good times and less resilient to shocks, such as today’s coronavirus pandemic. Many think tackling inequality would require such heavy-handed interference that it would stifle economic growth. But a careful look at the data suggests nothing could be further from the truth—and that reducing inequality is in fact key to delivering future prosperity.

Presenting cutting-edge economics with verve, Heather Boushey shows how rising inequality is a drain on talent, ideas, and innovation, leading to a concentration of capital and a damaging under-investment in schools, infrastructure, and other public goods. We know inequality is fueling social unrest. Boushey shows persuasively that it is also a serious drag on growth.

“In this outstanding book, Heather Boushey…shows that, beyond a point, inequality damages the economy by limiting the quantity and quality of human capital and skills, blocking access to opportunity, underfunding public services, facilitating predatory rent-seeking, weakening aggregate demand, and increasing reliance on unsustainable credit.”
—Martin Wolf, Financial Times

“Think rising levels of inequality are just an inevitable outcome of our market-driven economy? Then you should read Boushey’s well-argued, well-documented explanation of why you’re wrong.”
—David Rotman, MIT Technology Review

Understanding Capital is a brilliantly lucid introduction to Marxist economic theory. Duncan Foley builds an understanding of the theory systematically, from first principles through the definition of central concepts to the development of important applications. All of the topics in the three volumes of Capital are included, providing the reader with a complete view of Marxist economics.

Foley begins with a helpful discussion of philosophical problems readers often encounter in tackling Marx, including questions of epistemology, explanation, prediction, determinism, and dialectics. In an original extension of theory, he develops the often neglected concept of the circuit of capital to analyze Marx’s theory of the reproduction of capital. He also takes up central problems in the capitalist economy: equalization of the rates of profit (the “transformation problem”); productive and unproductive labor and the division of surplus value; and the falling rate of profit. He concludes with a discussion of the theory of capitalist crisis and of the relation of Marx’s critique of capitalism to his conception of socialism.

Through a careful treatment of the theory of money in relation to the labor theory of value, Foley clarifies the relation of prices to value and of Marx’s categories of analysis to conventional business and national income accounts, enabling readers to use Marx’s theory as a tool for the analysis of practical problems. The text is closely keyed throughout to the relevant chapters in Capital and includes suggestions for further reading on the topics discussed.

Global trade is of vital interest to citizens as well as policymakers, yet it is widely misunderstood. This compact exposition of the market forces underlying international commerce addresses both of these concerned groups, as well as the needs of students and scholars. Although it contains no equations, it is almost mathematical in its elegance, precision, and power of expression.

Understanding Global Trade provides a thorough explanation of what shapes the international organization of production and distribution and the resulting trade flows. It reviews the evolution of knowledge in this field from Adam Smith to today as a process of theoretical modeling, accumulation of new empirical data, and then revision of analytical frameworks in response to evidence and changing circumstances. It explains the sources of comparative advantage and how they lead countries to specialize in making products which they then sell to other countries. While foreign trade contributes to the overall welfare of a nation, it also creates winners and losers, and Helpman describes mechanisms through which trade affects a country's income distribution.

The book provides a clear and original account of the revolutions in trade theory of the 1980s and the most recent decade. It shows how scholars shifted the analysis of trade flows from the sectoral level to the business-firm level, to elucidate the growing roles of multinational corporations, offshoring, and outsourcing in the international division of labor. Helpman’s explanation of the latest research findings is essential for an understanding of world affairs.

Understanding NAFTA was first published in 1993 as Continental Shift: Free Trade & the New North America. This edition includes a new introduction that brings the NAFTA story up through 1995.

For decades, leaders in higher education have voiced their intention to expand college education to include disadvantaged groups. Colleges have embraced and defended public policies that push back against discrimination and make college more affordable. And yet, as the economist Charles Clotfelter shows, America’s system of undergraduate education was unequal in 1970 and is even more so today.

In Unequal Colleges in the Age of Disparity, Clotfelter presents quantitative comparisons across selective and less selective colleges from the 1970s to the present, in exploration of three themes: diversity, competition, and inequality. Diversity shows itself in the variety of colleges’ objectives but also in the disparity of the material and human resources at their disposal. Competition operates through both the supply and the demand sides of the market, with college admissions becoming more meritocratic even as the most desirable colleges choose to contend fiercely for top-tier students rather than accommodate rising numbers of qualified applicants. Clotfelter shows that exclusive colleges have also benefited disproportionately from America’s growing income inequality. As their endowments have ballooned, their students have become more academically advantaged, owing in part to the extraordinary steps affluent families take to groom their children for college admission.

Clotfelter finds that despite a revolution in civil rights, billions spent on financial aid, and the commitment of colleges to greater equality, stratification has grown starker. Top colleges cater largely to children of elites.

Ayukawa Yoshisuke (1880–1967) was the founder of the Nissan conglomerate and the leader of the Manchuria Industrial Development Corporation, one of the linchpins of Imperial Japan’s efforts to economically exploit its overseas dependencies. Despite his close association with the Japanese government from the 1920s to the 1950s, Ayukawa was a proponent of free trade and global economic interdependence. He sought to lessen state control of Japan’s economy by trying to attract foreign—especially American—capital and technology in the years surrounding World War II.

In the postwar era in particular, Ayukawa actively pushed the growth of small- and medium-sized firms, yet his efforts were ultimately unsuccessful. In Unfinished Business, through exploring the reasons for Ayukawa’s failure, Haruo Iguchi illuminates many of the economic problems of today’s Japan.

What makes American labor unions distinctive from others in advanced Western countries is neither as simple as their wanting “more” nor as philosophical as their operating in an open-class society. Through a comprehensive analysis of the United Brotherhood of Carpenters—the largest union before the 1930s and the pioneer—Walter Galenson details the reasons for the union’s success. He finds that the Carpenters survived the vicissitudes of rapid industrialization and modernization because it was a conservative, business union.

From its inception in 1881, the Carpenters’ union embraced the capitalist system and worked to improve productivity. This resulted in a higher wage scale, greater leisure time, use of technology to stretch construction work over the winter months, increased fringe benefits, job security during jurisdictional disputes, and more than normal advances by minorities and blacks. Galenson’s book is based on a vast sampling of archival materials, including union records, diaries, minutes of local and affiliate unions, and AFL and CIO primary sources. The author blends narrative with shrewd intuitive analysis to provide an indispensable source for labor and economic historians and students of labor movements.

One of the most-followed antitrust cases of recent times—United States v. Apple—reveals an often-missed truth: what Americans most fear is competition itself.

In 2012 the Department of Justice accused Apple and five book publishers of conspiring to fix ebook prices. The evidence overwhelmingly showed an unadorned price-fixing conspiracy that cost consumers hundreds of millions of dollars. Yet before, during, and after the trial millions of Americans sided with the defendants. Pundits on the left and right condemned the government for its decision to sue, decrying Amazon’s market share, railing against a new high-tech economy, and rallying to defend beloved authors and publishers. For many, Amazon was the one that should have been put on trial. But why? One fact went unrecognized and unreckoned with: in practice, Americans have long been ambivalent about competition.

Chris Sagers, a renowned antitrust expert, meticulously pulls apart the misunderstandings and exaggerations that industries as diverse as mom-and-pop grocers and producers of cast-iron sewer pipes have cited to justify colluding to forestall competition. In each of these cases, antitrust law, a time-honored vehicle to promote competition, is put on the defensive. Herein lies the real insight of United States v. Apple. If we desire competition as a policy, we must make peace with its sometimes rough consequences. As bruising as markets in their ordinary operation often seem, letting market forces play out has almost always benefited the consumer. United States v. Apple shows why supporting cases that protect price competition, even when doing so hurts some of us, is crucial if antitrust law is to protect and maintain markets.

Unlikely Partners recounts the story of how Chinese politicians and intellectuals looked beyond their country’s borders for economic guidance at a key crossroads in the nation’s tumultuous twentieth century. Julian Gewirtz offers a dramatic tale of competition for influence between reformers and hardline conservatives during the Deng Xiaoping era, bringing to light China’s productive exchanges with the West.

When Mao Zedong died in 1976, his successors seized the opportunity to reassess the wisdom of China’s rigid commitment to Marxist doctrine. With Deng Xiaoping’s blessing, China’s economic gurus scoured the globe for fresh ideas that would put China on the path to domestic prosperity and ultimately global economic power. Leading foreign economists accepted invitations to visit China to share their expertise, while Chinese delegations traveled to the United States, Hungary, Great Britain, West Germany, Brazil, and other countries to examine new ideas. Chinese economists partnered with an array of brilliant thinkers, including Nobel Prize winners, World Bank officials, battle-scarred veterans of Eastern Europe’s economic struggles, and blunt-speaking free-market fundamentalists.

Nevertheless, the push from China’s senior leadership to implement economic reforms did not go unchallenged, nor has the Chinese government been eager to publicize its engagement with Western-style innovations. Even today, Chinese Communists decry dangerous Western influences and officially maintain that China’s economic reinvention was the Party’s achievement alone. Unlikely Partners sets forth the truer story, which has continuing relevance for China’s complex and far-reaching relationship with the West.

A Financial Times Best Book of the Year

A hardheaded book that confronts and outlines possible solutions to a seemingly intractable problem: that helping the poor often hurts the environment, and vice versa.

Can we fight poverty and inequality while protecting the environment? The challenges are obvious. To rise out of poverty is to consume more resources, almost by definition. And many measures to combat pollution lead to job losses and higher prices that mainly hurt the poor. In Unsustainable Inequalities, economist Lucas Chancel confronts these difficulties head-on, arguing that the goals of social justice and a greener world can be compatible, but that progress requires substantial changes in public policy.

Chancel begins by reviewing the problems. Human actions have put the natural world under unprecedented pressure. The poor are least to blame but suffer the most—forced to live with pollutants that the polluters themselves pay to avoid. But Chancel shows that policy pioneers worldwide are charting a way forward. Building on their success, governments and other large-scale organizations must start by doing much more simply to measure and map environmental inequalities. We need to break down the walls between traditional social policy and environmental protection—making sure, for example, that the poor benefit most from carbon taxes. And we need much better coordination between the center, where policies are set, and local authorities on the front lines of deprivation and contamination.

A rare work that combines the quantitative skills of an economist with the argumentative rigor of a philosopher, Unsustainable Inequalities shows that there is still hope for solving even seemingly intractable social problems.

The future of smart cities has arrived, courtesy of citizens and their phones. To prove it, Daniel T. O’Brien explains the transformative insights gleaned from years researching Boston’s 311 reporting system, a sophisticated city management tool that has revolutionized how ordinary Bostonians use and maintain public spaces. Through its phone service, mobile app, website, and Twitter account, 311 catalogues complaints about potholes, broken street lights, graffiti, litter, vandalism, and other issues that are no one citizen’s responsibility but affect everyone’s quality of life. The Urban Commons offers a pioneering model of what modern digital data and technology can do for cities like Boston that seek both prosperous growth and sustainability.

Analyzing a rich trove of data, O’Brien discovers why certain neighborhoods embrace the idea of custodianship and willingly invest their time to monitor the city’s common environments and infrastructure. On the government’s side of the equation, he identifies best practices for implementing civic technologies that engage citizens, for deploying public services in collaborative ways, and for utilizing the data generated by these efforts.

Boston’s 311 system has narrowed the gap between residents and their communities, and between constituents and local leaders. The result, O’Brien shows, has been the creation of more effective policy and practices that reinvigorate the way citizens and city governments approach their mutual interests. By unpacking when, why, and how the 311 system has worked for Boston, The Urban Commons reveals the power and potential of this innovative system, and the lessons learned that other cities can adapt.