Predator State by James Galbraith - Book Report/Review Example

? CRITICAL REVIEW OF THE BOOK: PREDATOR BY JAMES GALBRAITH Introduction Understanding how the economy works is one of the most interesting things one would love to know. The dynamics behind the operations of an economy are wide and controversial in some sense. James Galbraith tried to bring into understanding how the markets work and why the markets need some regulation (Galbraith, 2008 p. 6). The book talks about talks about the market regulation by the government so that the institutions can work in harmony to bring about sanity in the society. He further talks of the state being able to be in charge of the economy as a way of dealing with the issues of inequalities in the society. The gap between the rich and the poor he argues can only be cured by the intervention by the government. His main arguments are that there should be tax cuts for individuals. This he explains would ensure more savings and spur economic growth. He further argues that market forces have been allowed to rule and the unions that fight for market regulation have been assaulted. He claims that the government has been twisted and cannot deal with the rogue markets. He is of the opinion that there needs to be a tight regulation of the monetary system. Galbraith says this would stop the inflation that in turn brings a mess into the economy. He proposes that there should be a system of planning to help in planning for the future. Further, the government should regulate the amount of wages payable to an individual. Lastly he argues that the United States a global leader should help bring sanity to the world economies. His thesis is that markets should not be left on their own but regulated for the sake of fairness and objectivity. While I agree with some of the findings, I do not subscribe to some of his agendas. Markets cannot be subjected to regulation by the state. Markets best work when the market forces are allowed to dictate the operations that happen in the market. When the government takes part in the regulation process, profits may reduce and people may lose jobs, as production would be declined. Reason being that a government is all about politics and politicians only act to appease the egos of their constituents. This may not be viable for an economy because the government might introduce a system for example regulating the prices of commodities. This would be done without taking into consideration the input in terms of resources invested to produce the goods. This would make the companies run into losses, thus grounding to a halt. This would also affect competition that would in turn lead to undervalued goods in the market (Epstein, Allen, and Wood, 2008 p. 6). Galbraith does not give a clear argument for free trade and appears vague in trying to compound on the point. He is of the view that airlines and telecommunication industries need external markets to meet their expectations. These kinds of industries cannot meet their targets if they were to depend on the domestic markets. Nevertheless he argues that there is a danger in a very open system of trade. On this he does not give any proposal on what is the best that can better free trade. The government cannot provide all the essential social facilities. The private sector plays a huge role in complimenting the government’s work. Galbraith argues that liberals seek market solutions for social problems. In other words he is opposed to other institutions providing the services. He is about the idea that liberals should seek employers nod to seek universal coverage. He totally disregards the private insurance firms but favors the single payer system. The notion that conservatists are for the idea that health care should be privatized is a fallacy. The government controls a big portion of the health care system and by thinking that the private sector can take over the system would only lead to a collapse. The private sectors are only there to compliment. His argument for free markets and the central planning in my opinion does not hold water. Why? The United States is a mixed economy and this has become to be so over the years. The government has a role to play same to the private entities. He is of the opinion that the markets should work in harmony with the government. He feels that that kind of a system is the best. He further was also explicit about this kind of a system where the government and the markets worked in in harmony. This cannot however be the case at the moment because of the different dynamics that have characterized the world today. Galbraith completely disregards the markets failing to understand that the market is the best provider of goods and services and calls for the liberals to throw the markets in the trash. This is a huge misunderstanding on the operations of the markets. The arguments that the government should be naming the prices of commodities while the unions determine the wages is an outright misconception falling short of the effects of globalization. Conclusion One thing about this book that I agree with is that markets should check but it should only be to protect consumers against unscrupulous traders. The ideas of the regulation of markets and the entities that need to work together were a new phenomenon that I learned in this book. I was amazed to find out that such a system existed before in the United States where the government and various institutions worked in harmony to achieve some equality. The political economy of the United States changed when Reagan came to power with far reaching reforms. Tax cuts, strict monitoring of the currency and market regulation were some of the measures initiated by Reagan. This however changed with the coming in of George Bush. The systems put in place by the Reagan administration did not work and thus Bush wanted to do something differently. This changed completely the political economy of the United States. The market forces have been left to dictate the operations of the market while the government has less influence on the governments (Przeworski, 2003 p. 20). The economy today cannot be said to be a free market economy. There are a lot of combinations that make the economy a mixture of entities. There are public and private factors that characterize the economy. Education, health and many other things from the bulk of what brings about the combination. The market should not be subjected to a lot of pressure with an aim of cutting it into a size. The market requires robust reforms that include proper planning with clear policies that are aimed at ensuring that the market remains what it is meant to be while having the government takes the lead in governance. List of References: Epstein, Richard Allen, and Geoffrey Wood. 2008. Free markets under siege: cartels, politics, and social welfare. Stanford, Calif: Hoover Institution Press. Galbraith, James. 2008. The Predator State: How Conservatives Abandoned the Free Market and Why Liberals Should Too. University of Texas. Press. Przeworski, Adam. 2003. States and markets: a primer in political economy. Cambridge [u.a.]: Cambridge Univ. Press. Read More