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A provocative look at how today’s trade conflicts are caused by governments promoting the interests of elites at the expense of workers Trade disputes are usually understood as conflicts between countries with competing national interests, but as Matthew C. Klein and Michael Pettis show in this book, they are often the unexpected result of domestic political choices to ser A provocative look at how today’s trade conflicts are caused by governments promoting the interests of elites at the expense of workers Trade disputes are usually understood as conflicts between countries with competing national interests, but as Matthew C. Klein and Michael Pettis show in this book, they are often the unexpected result of domestic political choices to serve the interests of the rich at the expense of workers and ordinary retirees.   Klein and Pettis trace the origins of today’s trade wars to decisions made by politicians and business leaders in China, Europe, and the United States over the past thirty years. Across the world, the rich have prospered while workers can no longer afford to buy what they produce, have lost their jobs, or have been forced into higher levels of debt. In this thought-provoking challenge to mainstream views, the authors provide a cohesive narrative that shows how the class wars of rising inequality are a threat to the global economy and international peace—and what we can do about it.


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A provocative look at how today’s trade conflicts are caused by governments promoting the interests of elites at the expense of workers Trade disputes are usually understood as conflicts between countries with competing national interests, but as Matthew C. Klein and Michael Pettis show in this book, they are often the unexpected result of domestic political choices to ser A provocative look at how today’s trade conflicts are caused by governments promoting the interests of elites at the expense of workers Trade disputes are usually understood as conflicts between countries with competing national interests, but as Matthew C. Klein and Michael Pettis show in this book, they are often the unexpected result of domestic political choices to serve the interests of the rich at the expense of workers and ordinary retirees.   Klein and Pettis trace the origins of today’s trade wars to decisions made by politicians and business leaders in China, Europe, and the United States over the past thirty years. Across the world, the rich have prospered while workers can no longer afford to buy what they produce, have lost their jobs, or have been forced into higher levels of debt. In this thought-provoking challenge to mainstream views, the authors provide a cohesive narrative that shows how the class wars of rising inequality are a threat to the global economy and international peace—and what we can do about it.

30 review for Trade Wars Are Class Wars: How Rising Inequality Distorts the Global Economy and Threatens International Peace

  1. 4 out of 5

    Justina

    This book deserves a mass-market push that it seems to not be getting. Instead, it's probably being read by people like me who are already familiar with the arguments from Pettis's writing but want it in book length. In terms of difficulty for the laymen, it lies somewhere between a book digestible enough for someone who doesn't remember their high school economics and an academic treatise for the economics PhD. That is to say, I found it cogent and surprisingly brief, but it does not seek to en This book deserves a mass-market push that it seems to not be getting. Instead, it's probably being read by people like me who are already familiar with the arguments from Pettis's writing but want it in book length. In terms of difficulty for the laymen, it lies somewhere between a book digestible enough for someone who doesn't remember their high school economics and an academic treatise for the economics PhD. That is to say, I found it cogent and surprisingly brief, but it does not seek to entice or convert the uninterested. This is probably not necessary in a book review, but here goes: I buy the argument, and I find the argument inherently attractive. It satisfies the centrist liberal's appetite for free trade, cosmopolitanism and narrowing income inequality by resolving their seeming contradictions. In that sense, more people should be beating the drums for this case. The issue, I think, is the argument is not intuitive. To argue that America spends more than it saves not because it's a nation of spendthrifts but because of financial inflows fueled by depressed consumer demand in other countries is...difficult. It is much more difficult than saying American would produce more if it imposed tariffs or saying Americans should just learn to save more like the Chinese. That's not even to mention the book concludes by saying the federal government should actually issue more debt, not less, to satisfy foreign demand. (It is interesting that none of the proposals at the end is discouraging overseas purchases of U.S. assets.) This is not to reduce the book to a rhetorical exercise. Klein and Pettis make a very convincing case in the book, though I am also curious what dissenting economists would say.

  2. 5 out of 5

    Hadrian

    When the United States imposed sanctions on government officials in the City of Hong Kong for their enactment of a draconian "National Security Law" earlier this month (August 2020), the largest banks in China complied. For all of the hollowing out of the capacity of the current administration in the past four years, for all of its missteps, blatant corruption, and pie in the sky plans, it shows only the dollar is still almighty if Chinese banks must comply. For all the dollar's strength as a gl When the United States imposed sanctions on government officials in the City of Hong Kong for their enactment of a draconian "National Security Law" earlier this month (August 2020), the largest banks in China complied. For all of the hollowing out of the capacity of the current administration in the past four years, for all of its missteps, blatant corruption, and pie in the sky plans, it shows only the dollar is still almighty if Chinese banks must comply. For all the dollar's strength as a global reserve currency, other countries still have room to maneuver within someone else's hegemony. Global and regional powers can still compete, even if they don't always go to war. Klein and Pettis here draw from John Hobson's study, "Imperialism", instead of Lenin, who said that those financial competitions would always lead to war. In their study, they focus on two countries that were the greatest beneficiaries of the post-Cold War financial system - Germany and China. After the fall of the Berlin Wall and the reunification of Germany, it was able to expand rapidly on the basis of new labor markets elsewhere. In China, post-Tiananmen, the new stage of economic reforms was based on low wages, dismantling the bloated and inefficient state-owned enterprises, and export promotion. Germany became the pre-eminent manufacturing power in Europe, and China now expands its capacity to its neighbors with lower wages. Suppliers of raw materials also benefit. But the result is that while the United States is awash in cheap manufactured goods, the domestic manufacturing center is hollowed out. Yet cutting American domestic spending would not be enough - that would not be enough to drive up savings and attract investment. The government, while still a massive driver in spending, would not be enough to influence the balances of savings and investment in the economy - those countries which have a massive surplus built up from exports invest in American sovereign debt. And so trade wars are class wars - from the exporters who suppressed domestic purchasing power through low interest rates to drive up manufacturing; to the United States which saw its own manufacturing centers disproportionately affected; and to big business which has continued to profit from the world's largesse. This arrangement has been uneven in its benefits. And even so it is unstable - Germany's trapeze act in the Eurozone and the many millions of Chinese who are still poorer withstanding. Where will a 'rebalance' come from? There are rumors of Chinese moves towards boosting consumption through a 'dual circuation' policy; and on the American side coherent policies can only come up after the Trump administration is gone. But the question in framing of all this as war, and bringing up Germany and China in the same breath. Even the most frenzied hawk in the US national security apparatus would not dare treat Angela Merkel the same way as Xi Jinping. Klein and Pettis are right in bringing up this framing of current accounts and how trade, consumption, and investment are all intertwined; but I'll leave by saying this is a comprehensive and well-argued framing of one issue out of many.

  3. 5 out of 5

    Marks54

    If you read enough debates about the poor pay practices of various big box retailers, a simple question eventually comes up. “If you don’t pay your workers more than a minimal wage, how are they going to be able to afford the stuff you sell?” That is a good place to start in considering “Trade Wars are Class Wars”. Trade politics is just about always messy and the closer one looks the more political it appears. Formal rational economic models seem out of place. If one has followed recent gyration If you read enough debates about the poor pay practices of various big box retailers, a simple question eventually comes up. “If you don’t pay your workers more than a minimal wage, how are they going to be able to afford the stuff you sell?” That is a good place to start in considering “Trade Wars are Class Wars”. Trade politics is just about always messy and the closer one looks the more political it appears. Formal rational economic models seem out of place. If one has followed recent gyrations around US-China tariffs and trade agreements, this is crystal clear. Matthew Klein and Michael Pettis have written a book in which they try to develop the logic of trade politics by tying trade wars to income inequality. The idea is that ideally production and consumption should match up in a national economy and that the pressure for foreign trade will increase consumers cannot buy all that is produced. So conflicts over foreign trade may have nominal causes in particular situations but will be better understood as a function of inequality within a nation rather than differences between nations. This is a problem of more extreme inequality not just a matter of richer or poorer. The idea is that trade disputes reduce to elites exploiting the much poorer masses, after which they are forced to sell their excess production internationally or else take their surplus profits and invest them in overseas financial vehicles. Klein and Pettis go through a number of contemporary cases to show how this works and bring their arguments up to the present in the US-China disputes and the various EU financial crises and the role of Germany. Does this work? Hmmm... I am not a trade specialist but it seems reasonable and the general logic is appealing. I also like that the authors do not go deep into the weeds in covering various tariff strategies or how to win trade wars and get better agreements. The current US-China kerfuffle casts doubt on any effort to do that. Rather, they propose solutions based on policies to fight inequality. Of course, how to defeat entrenched elites and put such policies into practice is another matter but it makes some intellectual sense. I will be reading more on trade and this book is a helpful addition to my reading list.

  4. 5 out of 5

    David Childers

    This is basically an exercise in balance of payments accounting, with some financial history thrown in. The main thesis is that the functional distribution of income determines savings rates, which determine the current account balance, and that political economic forces which have redistributed income away from workers, have been the major drivers of recent patterns of global imbalances. The focus is placed on Germany, where high national savings is attributed to policy changes post unification This is basically an exercise in balance of payments accounting, with some financial history thrown in. The main thesis is that the functional distribution of income determines savings rates, which determine the current account balance, and that political economic forces which have redistributed income away from workers, have been the major drivers of recent patterns of global imbalances. The focus is placed on Germany, where high national savings is attributed to policy changes post unification that have kept wages and government spending on social programs down, and China, where more direct control of wages and financial repression have been used. The flip side of this is persistent current account deficits in the US, which, due to (they argue) predictable and highly precedented patterns of misallocation of external capital inflows, has led not to productive investment or enhanced consumption, but instead, via Dutch disease and widening transfers to the financial sector, a rise in inequality in the US as well. Taken together, these forces also depress global demand and play a role in persistent stagnation. Throughout, basic balance of payments accounting identities and detailed historical figures are used to make the case (a clear upgrade over popular arguments which do not make the effort to ensure basic accounting consistency), but the style of argument is rather informal, with alternative causal explanations presented but dismissed casually with appeal to a few charts or basic historical facts. This is suitable for the informed business reader likely to make up the target audience for this book, but the academic economist in me will remain at least somewhat skeptical without a more formal framework for evaluating the causal claims. That said, I did find the argument clear and provocative, to the point that I think it merits further study. Overall, I found this a worthwhile read, especially for the historical coverage. For one, I learned a lot about German domestic politics. The coverage of post-financial crisis events was also helpful, as the academic literature has not quite caught up. Essentially, after the Euro crisis, Europe as a whole has shifted from a position of current account balance to net surplus while Asian surpluses have decreased, events the authors attribute to fiscal retrenchment in southern Europe post crisis and the deceleration of reserve accumulation in Asia. Their policy prescriptions, which I guess are mandatory in books like this, while sensible given their story, seem particularly unlikely to be implemented for exactly the same political reasons they suggest have lead to the issues, though I don't hold that against their descriptive analysis.

  5. 4 out of 5

    Laurent Franckx

    You may be forgiven if you think from reading the title that this is a Marxist analyst of international trade. It isn't. Actually, it doesn't even mention Marx, and uses the famines under Stalin and Mao as illustration for the central thesis of the book. This thesis can be summarized as follows. First, the book starts with something that is completely uncontroversial for anyone who had a two hours cours about national accounting (even if it is something people often overlook): any surplus (deficit You may be forgiven if you think from reading the title that this is a Marxist analyst of international trade. It isn't. Actually, it doesn't even mention Marx, and uses the famines under Stalin and Mao as illustration for the central thesis of the book. This thesis can be summarized as follows. First, the book starts with something that is completely uncontroversial for anyone who had a two hours cours about national accounting (even if it is something people often overlook): any surplus (deficit) on a country's current account must be compensated by a deficit (surplus) of the same magnitude on its capital account. Why? Because (if we simplify somewhat and reduce the current account to the trade balance) a deficit on your trade balance means you spent more on imports than you earn from exports. And you can only spend more than you earn if the rest of the world gives you credit (which means you import capital). Conversely, if you earn more than you spend, this means you give credit to the rest of the wold - which means that you export capital. Economists have often emphasized that a trade deficit is not necessarily a bad thing. In a closed economy, your only source of funding for your investment is national savings. If your investment needs are large and your savings small (the typical situation for a poor country, it makes perfect sense to have a trade deficit and let the rest of the world contribute to funding your investment. Again, there is nothing controversial in this step. Where things get more complicated, is in the identification of causal links. Is it trade imbalances that drive international capital flows, or is it international capital flows that drive trade imbalances? And is it the policies of the trade surplus countries that determine global imbalances or the policies of the deficit countries? The second step in the book's argument pertains to those question, and is certainly more controversial than the first one: the authors claim that it is the internal policies of the large surplus countries (Germany, China) that are the driving forces. According to them, it is surplus savings in Germany and China that have lead to massive capital inflows in the United States but also in the deficit countries in the EU. Those capital flows were larger than the productive investment needs of those countries, and have led to housing booms that contribute nothing to economic growth - with the financial crisis of 2008 as outcome. This is a bold claim, but the authors carefully underpin their argument with a list of policies in Germany and China that (purposefully or not) reduce national consumption - actually, those policies are well known and have been discussed for quite a while, even before the financial crisis (remember Lawrence Summer's speech about the "glut of savings"). I guess that the real controversy here lies in the representation of the deficit countries (including the USA) as passive actors that cannot do much except accommodate those capital inflows. Putting the responsibility of global imbalances squarely with the surplus countries is, let's say, a daring claim. The third (and even more controversial) step in the book is the claim that the policies that lead to the surpluses in Germany and China are the result of measures that deliberately increase the share of capital income in GDP at the expense of income from labour (which are supposedly linked to someone's 'class' - hence the title). Not surprisingly, the authors conclude that, in order to maintain the benefits from globaliZation, the surplus countries need policies that increase the labor share in national income - essentially, a social democratic call to action. I don't know whether this book will end up as an international bestseller as Thomas Piketty's work has. It certainly deserves to do so - and not only because it is much more pleasant to read. Agree or not with the arguments (and there's a lot that has made me frown), but they are carefully laid out, and the authors refrain from any ideological saber rattling. Following the financial crisis, we have seen tonloads of criticisms of the current economic order, and proposals for reform. This one stands out for the clarity of its argument, and for the concreteness of its policy proposals. It is a welcome addition to the public debate, and deserves to be widely read.

  6. 4 out of 5

    Daniel

    A refreshing book with some unusual arguments: 1. Trade wars happen because manufacturing jobs have moved from advanced to developing countries such as China and Mexico. Trade unions become powerless. Blue collared workers lose their jobs. Poor people overdose themselves with opioids or commit suicide. Civic societies disappear. They vote for populists like Trump. So Trump start trade wars. 2. This is possible only because of inequalities in exporting countries like China and Germany. Their worke A refreshing book with some unusual arguments: 1. Trade wars happen because manufacturing jobs have moved from advanced to developing countries such as China and Mexico. Trade unions become powerless. Blue collared workers lose their jobs. Poor people overdose themselves with opioids or commit suicide. Civic societies disappear. They vote for populists like Trump. So Trump start trade wars. 2. This is possible only because of inequalities in exporting countries like China and Germany. Their workers’ wages are suppressed in favour of capital and the elite. So their goods can be sold cheaply and then they accumulate a trade surplus which they reinvest mainly back in American assets. This leads to financial and housing bubbles, and debt-fueled consumption of the American people. 3. The only way to fix this is for America to pressuring surplus countries to reduce their inequality and let their own people spend more. Tariffs and decoupling simply do not work as long as exporting countries are unequal. Amazing fact: Germany’s GDP per capita is higher than Spain but because it is more unequal, it’s median wage is actually lower than that of Spain.

  7. 4 out of 5

    Jamie Pastore

    Really enjoyed the mix of history, policy, politics, economics, and finance that this book was able to pack in without being overly long or dense. The ability to simply and clearly explain why intra-nation distribution of resources affect the rest of the world is done exceptionally well by the authors and made for very enjoyable reading.

  8. 4 out of 5

    Charlene

    Alarmingly, the trend in which we see workers handing over their hard earned money to the wealthy elite, is far from a national crisis. It's a global crisis. You would think that if each country has its own laws and policies, you would see very different outcomes. But, it seems that laws and policies in individual countries only serve to globally make the poor poorer and rich richer. It can be confusing to think about because we all know that even some poor people in America today are able to ea Alarmingly, the trend in which we see workers handing over their hard earned money to the wealthy elite, is far from a national crisis. It's a global crisis. You would think that if each country has its own laws and policies, you would see very different outcomes. But, it seems that laws and policies in individual countries only serve to globally make the poor poorer and rich richer. It can be confusing to think about because we all know that even some poor people in America today are able to eat more diverse foods than what was available to even the richest kings of the past. Life seems to be getting better for everyone, right? Our healthcare gets better, farming and trade have made it so that I can have a delicious avocado with my salad any time of the year, no matter how cold it is in my local region. This might be true, but it is also true that at the same time, the small percent of the very wealthy are learning ways in which they can secure more and more of the common person's wealth, and policies are helping the wealthy succeed.  You might think it's just China doing this to their citizens, but it's not. Even the UK has increasingly reduced worker protections and increased taxes for the workers. These authors think there is definitely cause for concern and urge the reader to take caution when accepting various narratives generated by governments and companies. For example, when we hear what the Chinese are doing, do we accept that what seem like sketchy policies are being perpetrated by all Chinese? Or can we recognize that the policies of the government (policies such as using coal and not using filters for factory waste, which has been written about extensively in other books) have caused its poor citizens to breathe polluted air and drink dirty water? It's not hard for me to empathize with the average Chinese worker. After all, I really hope people in other countries realize that only some American's are terrible enough to elect someone as dangerous and harmful as Trump.  In this book the authors depict a really wonderful history of trade that sets the reader up to understand how class wars, going on right now, feed into trade wars, and how trade wars create the perfect conditions to take money out of the hands of workers and put it into the hands of the very wealthy. The authors examined how globalization is affecting America. They looked at seemingly unconnected situations in various countries and how an "unconnected" situation in one country ended up affecting the environment in a country across the vast ocean. This book was published in 2020, which means you read the authors' perspective on Trump's trade war with china. They discussed in detail what the role of Trump's trade policies with China played in the 2016 election.Trump's stance on China was popular across the political spectrum and were praised by democrats such as Chuck Schumer.  The authors go so far as to claim that Donald Trump might have actually lost the election if it had not been for the trade war between America and China, because he got the votes from the 89 of the 100 counties most negatively affected by the trade war with China.   My review isn't doing the book justice. Extremely informative. The authors covered so much ground. I highly recommend putting it on your reading list. 

  9. 4 out of 5

    Edmund Wigley

    I place this book at the front of a line of new economic theories that look to rethink what money means and its workings at the international level. My lasting impression from this book is another plea for governments to stop treating national finances as anything comparable to household/business finances and to turn the common belief around that in many cases it is not indebted countries which are to blame but those forcing their surplus reserves (often at the expense of their own population) o I place this book at the front of a line of new economic theories that look to rethink what money means and its workings at the international level. My lasting impression from this book is another plea for governments to stop treating national finances as anything comparable to household/business finances and to turn the common belief around that in many cases it is not indebted countries which are to blame but those forcing their surplus reserves (often at the expense of their own population) onto these countries. Klein and Pettis expertly pick apart international asset flows to display how domestic policies, concentrates wealth in the wrong hands, leads to imbalances in the global financial system and ultimately trade wars. They explain the failures of the existing structure through plentiful supporting data and historical examination which is both thorough yet simple to comprehend and offer actionable policies to remedy them. Notes: Three regions are central to the book: China, US and Europe but all are split into two halves: There are the nations that suppress their population’s consumption to a level below their productivity; and the resulting nations which are absorbing the surplus capacity. China has for a long time prioritised its industrialisation over its population, quashing consumption and producing a large financial surplus. It has done this through stringent capital controls and domestic policies such as regulating rural-urban migration (hukou). The surplus is either invested in domestic infrastructure or the acquisition of foreign assets. An interesting point they make that the Belt and Road initiative as a method for providing more demand for its surplus as opposed to military or geopolitical positioning. The US is a special case due its currency propping up the global financial plumbing. It is not seen as a string puller but one bound to free market policies that allow it to be picked off by surplus countries and it is subsequent difficult for it to unilaterally change its situation. Redressing the economic inequality and degrading infrastructure requires shifting foreign investment from the private sector which has few places to spent productively and into the public purse where it can be used for these purposes. After China, Germany has the highest trade surplus where policies favour business and sustaining wealth over workers. More obvious fiscal solutions exist here; reforming taxes and strengthening social nets. While this might limit the exasperation which occurred when an overheated lending market (from excess surplus) caused countries such as Spain to spend beyond its ability to productively invest it doesn’t not solve European problem which does not seemingly have a solution beyond multilateral organisation and ultimately federalism.

  10. 5 out of 5

    Arup

    Summarizing my thoughts/takeaways from the book: Capital flows lead, and not follow, current account flows. Meaning an EM fad ends up forcing a Brazil or India to run deficits just from pure accounting. EM countries realized this through multiple painful experiences and started sterilizing these flows to prevent sudden stops. Can't blame their action but this artificially kept domestic wages low. When wages are low, capitalists are not forced to innovate i.e. increase productivity. For the Americ Summarizing my thoughts/takeaways from the book: Capital flows lead, and not follow, current account flows. Meaning an EM fad ends up forcing a Brazil or India to run deficits just from pure accounting. EM countries realized this through multiple painful experiences and started sterilizing these flows to prevent sudden stops. Can't blame their action but this artificially kept domestic wages low. When wages are low, capitalists are not forced to innovate i.e. increase productivity. For the American worker, the capitalist threatened jobloss to China to keep wages low. Either way labor lost out and capital won. The sterlization of capital inflows by EM central banks or the financial repression followed by Germany (to keep local wages low thereby producing more than could be consumed locally and hence running up surpluses) meant the global supplier of safe assets (USA) had to run deficits (or in other words continuously come up with USD assets others could buy). When that job was left to the private sector you got CDO squared. Now we are seeing a simpler version of the same. Every other day the US govt issues billions of dollars of treasuries without any price impact. Safe asset scarcity is real and probably changes only when USD is no more THE reserve currency. Reserve currency status is not just because of one's financial position (size of economy or market depth) but other factors like rule of law and military might (history and ability of honoring contracts). All that means is the end is likely to be a BANG! as Ray Dalio has been voicing in his notes over the last few months. How do we restore global imbalances? Solve the labor vs capital problem. As in solve inequality. Let wages go up. Consumption will automatically go up. You don't have to force your produce down someone else's throat. Consumption preferences will drive resource allocation and the marginal dollar of credit will likely chase the highest return on investment rather than zombie towns. In other words capitalism can work once again. Capital will need labor power though. On its own, might instead end capitalism. Things look dire today with an overlevered system with no growth, lots of imbalances and till now an inability to inflate out of the debt (more of a political problem rather than operational to be fair). But its not over until its over. We need clear eyes and full hearts as Ben Hunt says.

  11. 5 out of 5

    Amy David

    The authors put forth a very important thesis: trade surpluses are not some grand accomplishment by a country making itself critical to the world economy, but rather the result of austerity measures that strip workers of their purchasing power. They explain how domestic class war underpins global trade war, and the continuing negative effects we can expect from such policies. The problem is that this book is far too technical for a layperson, and I wish it were as accessible as it's portrayed by The authors put forth a very important thesis: trade surpluses are not some grand accomplishment by a country making itself critical to the world economy, but rather the result of austerity measures that strip workers of their purchasing power. They explain how domestic class war underpins global trade war, and the continuing negative effects we can expect from such policies. The problem is that this book is far too technical for a layperson, and I wish it were as accessible as it's portrayed by its publisher. Also, it seems rushed to print -- there are quite a few places where sentences were incomplete or missing words, which certainly doesn't help comprehension. As someone with expertise in an adjacent field, I got a lot out of this book, but it's not something I can widely recommend.

  12. 5 out of 5

    Yannick M

    Great book. Not only does it argue its thesis well, you'll also learn a lot about the history and present of international trade and finance. Very readable and not longer than it needs to be. Great book. Not only does it argue its thesis well, you'll also learn a lot about the history and present of international trade and finance. Very readable and not longer than it needs to be.

  13. 5 out of 5

    Miguel

    What an excellent overview of State current account balances and how this is deeply intertwined with the question of inequality. After a quick overall historical approach describing the growth of global trade and finance, the authors provide a deep dive on the trade situation in China, Germany, and the US in each describing the status with respect to their historical and current day drivers for international trade flows (the German chapter amazing, but I’m biased in living here). Naturally this What an excellent overview of State current account balances and how this is deeply intertwined with the question of inequality. After a quick overall historical approach describing the growth of global trade and finance, the authors provide a deep dive on the trade situation in China, Germany, and the US in each describing the status with respect to their historical and current day drivers for international trade flows (the German chapter amazing, but I’m biased in living here). Naturally this is tied up with country specific saving & imbalances. The framing for the inequality discussion does not often get put through the lens of international trade, but one can see the strong connection established in the authors’ arguments. The final conclusions / recommendations are sound: overall it could have been just a bit more in depth but this is also one I wouldn’t mind revisiting down the road.

  14. 5 out of 5

    Matthijs

    Disappointing in its execution of a well-reasoned and argued premise. Instead of an examination of trade wars and a detailed analysis of the class wars existing in the societies discussed by the authors, the book focuses on international economic/financial history and national accounts of economic policymaking decisions of the 20th and 21st century. The 'trade wars' aspect of the book is confined to brief allusions to the current trade conflict between the United States and China and the somewha Disappointing in its execution of a well-reasoned and argued premise. Instead of an examination of trade wars and a detailed analysis of the class wars existing in the societies discussed by the authors, the book focuses on international economic/financial history and national accounts of economic policymaking decisions of the 20th and 21st century. The 'trade wars' aspect of the book is confined to brief allusions to the current trade conflict between the United States and China and the somewhat hidden role played herein played by European (German) excess savings. Whereas the 'class wars' are not even really mentioned whatsoever, except for simplifications like the 'ultra-rich versus the rest of the population' that blot out all the intricacies of the three societies discussed. Moreover, the link to the threat to international peace didn't even seem to be discussed whatsoever (unless the interweaving of WWI and WWII in the general historical overviews provided count).

  15. 4 out of 5

    Brian Kong

    Overall: 3.9 This investigation into global transactional warfare explores the political maneuvers, economic interests, and cultural forces that secure elite interests and widen inequality. The exploration of Germany and China's political pasts demonstrates trade wars are the second-hand effects of dwindling domestic purchasing power. The America's congruence as safe asset sponges will exacerbate the pernicious consequences of export surpluses. Despite the overwhelming historical context for tra Overall: 3.9 This investigation into global transactional warfare explores the political maneuvers, economic interests, and cultural forces that secure elite interests and widen inequality. The exploration of Germany and China's political pasts demonstrates trade wars are the second-hand effects of dwindling domestic purchasing power. The America's congruence as safe asset sponges will exacerbate the pernicious consequences of export surpluses. Despite the overwhelming historical context for trade disputes, its coherent arguments and advised solutions are refreshing and engaging.

  16. 5 out of 5

    Peter Verboven

    It took me three days to decide whether to give three or four stars to this book. Up until I started the very last chapter, I was firmly convinced no to go any higher than three at all. But those final few pages managed to make me reflect on many things I have held self-evident for so long, they changed my appreciation for the entire book. Klein and Pettis built the entire tome around the notion that trade wars are not conflicts between countries, but rather the inevitable result of structural in It took me three days to decide whether to give three or four stars to this book. Up until I started the very last chapter, I was firmly convinced no to go any higher than three at all. But those final few pages managed to make me reflect on many things I have held self-evident for so long, they changed my appreciation for the entire book. Klein and Pettis built the entire tome around the notion that trade wars are not conflicts between countries, but rather the inevitable result of structural inequality within countries. If labour income is suppressed in favour of investment, surplus production cannot be consumed domestically and will automatically lead to exports to and consumption in deficit countries. This mechanism is presented as a macro-economic inevitability. It is not the result of profligacy or any kind of lack of restraint; it is just trade and financial flows balancing out. The only 'choice' element in it, is with the elites in the surplus countries who manage to push through policies that restrain consumption and boost investment. The idea is intriguing and it highlights the main reason why so many people/voters seems to have given up on globalisation and liberalism. The final chapter looks into ways to reverse this trend. Its recommendations run counter to the economic orthodoxies we have been brought up with: lower income taxes and VAT, increase the budget deficit, make inheritance taxes and corporate tax rates go up. This should stop the exports from surplus countries, increase the competitiveness in deficit countries and make the system rebalance - which is crucial for preserving its legitimacy. This counterintuitive reasoning is the main reason why the book deserves its place under the sun. At the same time I feel the book has not entirely convinced me, for several reasons. First of all the authors spend countless pages droning on macro-economic generalities and describing endless lists of statistics. This is the fallacy of the economist: put things in numbers and all of a sudden there is insight. This is mistaken. Insight comes from constructing a plausible narrative around a phenomenon. Numbers may at best illustrate this. The authors go some way to constructing this narrative, but they fall short of incorporating the more explanatory elements. Those get swept up under the label of the inevitable rebalancing of flows ( 'which is true, because the numbers show it'). The book therefore is at least one hundred pages too long. Leaving out the parts on the economic theories of Ricardo and others; and replacing the endless lists of statistics with more well-selected ones to really make a case. Secondly the analysis hinges on the stories of three countries, not all of which are convincing. China and Germany are the surplus countries, each directing a large share of national income to investment and smaller one to consumption. The story of how this came to be is rather general and stuck (again) in a list of statistics for China. Germany's case is better fleshed out, with clear anchoring points in getting over unification and the Hartz IV reforms to preserve competitiveness. It comes to no surprise that this was one of the best parts of the book. The United States acts as the main deficit country, 'being forced' to soak up excess production from elsewhere time and again. Despite a similar fundamental setup as Germany (domestic inequality, decaying infrastructure), its acting as a consumer of last resort is described as a result of the dollar's status as the main reserve/reference currency and the depths of its financial markets. This puts the act of balancing international streams squarely with the US, which often goes counter to what is needed domestically. Although I see a lot of value in the author's proposition in creating a multilateral reserve standard (to replace the dollar) for balancing, I feel one aspect is overlooked here: the fact that more consumption is always desirable and that this task should not be left to the US alone. This is exactly the third issue I take with the book. For a text with a moral/prescriptive tone, I am surprised to see that the authors never questioned indiscriminate consumption as the underpinning of their reasoning. They identified inequality as a main issue in today's international order, but overconsumption is another one. Without being naïve, the rise of climate action, the concern about plastics or ideas on a circular economy are alive with a growing number of people and they start influencing voting and decision making around the world. These forces - especially the shift towards a more circular economy - could influence a rebalancing by themselves as fewer things would have to be produced and shipped. Overall I am glad I came across this book and its fundamental idea, but it has not been sufficiently developed to not feel like an attempt at shifting blame for the US deficit entirely to others. This is a pity. With some extra work and insight, the case for a commonly managed and globally balanced (and probably somewhat restrained) system of trade and monetary flows, would have been a lot stronger.

  17. 5 out of 5

    Oliver Kim

    Probably the most cogent short economics book to come out in the last couple of years. Leans a bit technical for mass appeal -- the analysis is couched very much in the standard economese of current account surpluses and deficits-- but the conclusions are nothing if not radical. Think of it as the international complement to Piketty's Capital. Pettis and Klein argue that domestic imbalances -- namely, the suppression of wages and social spending in favor of capital -- are the primary drivers of i Probably the most cogent short economics book to come out in the last couple of years. Leans a bit technical for mass appeal -- the analysis is couched very much in the standard economese of current account surpluses and deficits-- but the conclusions are nothing if not radical. Think of it as the international complement to Piketty's Capital. Pettis and Klein argue that domestic imbalances -- namely, the suppression of wages and social spending in favor of capital -- are the primary drivers of international trade and financial imbalances. The two main culprits are China and Germany. Largely because of Michael Pettis's work, China's domestic problems -- from the cruelty of the Hukou to the overemphasis on investment -- are well known. What I did not fully grasp until reading this book was the extent to which Germany has suppressed worker wage growth and neglected social programs / infrastructure spending. (Median wealth is lower in Germany than in Greece!) Worse, Germany has exported its austerity obsession to the rest of the Eurozone, resulting in massive shortfalls in domestic consumption. The main victim in all this (aside from Chinese and German workers) is ironically the United States, which in trying to meet foreign investors' insatiable demand for dollar assets has persistently run current account deficits and gutted its manufacturing sector. We are living with the political consequences of that today. The "solutions" chapter which inevitably ends the book is a little disappointing. International imbalances, by their nature, require global cooperation to solve. Pettis and Klein issue a vague call for a new Bretton Woods-style arrangement, where countries will be obligated to limit their domestic imbalances. But it is hard to see how CCP elites and American bankers can be voluntarily made to agree, least of all if reform runs against their own interests.

  18. 4 out of 5

    Jason Bailey

    There are two dominant views about international trade. The first, the simplistic econ 101 view, is that trade is always good because it allows countries to specialize and, through comparative advantage, grow the pie for all. The second, personified currently by the claims of Donald Trump, is that trade is a war of country vs country that governments should fight to win, and that currently China is "eating our lunch." Both views are wrong, as shown in this brilliant book. The reason countries lik There are two dominant views about international trade. The first, the simplistic econ 101 view, is that trade is always good because it allows countries to specialize and, through comparative advantage, grow the pie for all. The second, personified currently by the claims of Donald Trump, is that trade is a war of country vs country that governments should fight to win, and that currently China is "eating our lunch." Both views are wrong, as shown in this brilliant book. The reason countries like China and Germany have enormous trade surpluses and the United States has enormous trade deficits is due to growing inequality within each country--and therefore the world. Trade imbalances are driven by banks, corporations and other elites at the expense of ordinary people. Germany and China have become enormous exporters, but the incomes from that have been used not to satisfy needs of their people but to invest in sterile financial assets abroad (especially in the US) in order to sustain those countries' trade advantages. US elites have welcomed the wash of financial investments because it has created asset inflation and transaction opportunities to the benefit of banks and financial institutions (and that ultimately sank the economy in 2008), and US producers have relocated production to countries like China and made money off exporting those cheaper goods back to the US. The solutions are hard, as Klein and Pettis point out, but each country must ultimately rebalance their own *internal* economies to create more equality. More for everyday people and less for banks and the 1% will help address the trade imbalances. Trade wars, on the other hand, threaten to set off dangerous societal instabilities. The problems of trade are similar to countless other issues. They are about an economic system based on growing inequality.

  19. 4 out of 5

    Vilius

    Regardless of what one thinks of the central arguments that are made in this book, the analysis in this book is certainly welcome in a world where the best politicians can come up with to explain our post-2008 problems are anecdotal examples of Merkel's Swabian housewife, Dijsselbloem's Greeks that 'waste money on drinks and women' and Trump's Mexicans 'that are ripping us off'. This book invites us to think about problems globally and to stay away from 'intuitive' anecdotes. I think other revie Regardless of what one thinks of the central arguments that are made in this book, the analysis in this book is certainly welcome in a world where the best politicians can come up with to explain our post-2008 problems are anecdotal examples of Merkel's Swabian housewife, Dijsselbloem's Greeks that 'waste money on drinks and women' and Trump's Mexicans 'that are ripping us off'. This book invites us to think about problems globally and to stay away from 'intuitive' anecdotes. I think other reviewers also missed a crucial moment - this book seems not to follow the standard neoclassical level of analysis. Authors claim that investment (I) causes savings (S), whereas the neoclassical models state otherwise. It also clearly focuses on income rather than substitution effects when describing choices that households make, as well as describes international capital flows to be based on trends, fashions and other irrational drives. The main problem of the book is its title - it's catchy and provoking, but one must understand that there is very little analysis of ongoing 'Trade wars'. Rather, the authors catch up to explaining trade wars in the conclusion, where they explain that trade wars will not change anything because they do not combat the real reasons why American, Chinese or German workers are not seeing appropriate returns for their labour. This book rather explains various confrontations between creditors and borrowers (the Eurozone crisis, the confrontation between the US and China) as nothing more than an effect of policies in both countries that lead to capital accumulation to the very richest in expense of the 'peoples' of both countries.

  20. 5 out of 5

    Ethan

    I am fairly new to thinking of the problems of the global political economy in terms of current account and capital account metrics, so this was a very helpful book with all of its historical case studies (post-Mao China, 21st-century Germany, 19th-century Britain, and post-WWII United States) intended to illustrate Pettis’ proposed mechanisms for and consequences of having a current account surplus/deficit. I still don’t know if I agree with or understand all of the underlying assumptions of th I am fairly new to thinking of the problems of the global political economy in terms of current account and capital account metrics, so this was a very helpful book with all of its historical case studies (post-Mao China, 21st-century Germany, 19th-century Britain, and post-WWII United States) intended to illustrate Pettis’ proposed mechanisms for and consequences of having a current account surplus/deficit. I still don’t know if I agree with or understand all of the underlying assumptions of this perspective (e.g., that there is a discernible limit on a nation’s productive investment capacity, which is determined by its legal and political institutions; or that nations with central planning have a lower productive investment capacity than nation’s with a market system for allocating credit; or that the sustainable level of a nation’s debt after 1971 is determined by its share of global GDP rather than, say, its military power) but it has been very fruitful to grapple with it. In any case, eventually they endorse social-democratic policies that I agree with: adopting something like Keynes’ bancor system; establish capital controls on real estate in current account deficit countries; passing Baldwin and Hawley’s market access charge law; shifting US household debt to US government debt; increasing US federal spending on public transit, green energy, and industrial subsidies; eliminating China’s hukou system and barriers to trade unions; establishing progressive income taxation and a social wealth fund in China; raising the inheritance tax in Germany; and federalizing European fiscal policy through a new central euro area treasury.

  21. 4 out of 5

    Keith Wheeles

    Timely and well-supported, reaching a conclusion I have been grappling with in examining income inequality (and its impact on domestic consumption - the key driver of a market economy). 'The thesis of this book is that rising inequality within countries heightens trade conflicts between them.' It examines the impact of income inequality not only in the US, but in China and Germany. The key difference in the way this impacts those three countries is that the US currently possesses the world's reser Timely and well-supported, reaching a conclusion I have been grappling with in examining income inequality (and its impact on domestic consumption - the key driver of a market economy). 'The thesis of this book is that rising inequality within countries heightens trade conflicts between them.' It examines the impact of income inequality not only in the US, but in China and Germany. The key difference in the way this impacts those three countries is that the US currently possesses the world's reserve currency as its own. This results in the excess savings from China, Germany, and other exporters being stored in the US. ' Trade war is often presented as a conflict between countries. It is not: it is a conflict mainly between bankers and owners of financial assets on one side and ordinary households on the other—between the very rich and everyone else. Rising inequality has produced gluts of manufactured goods, job loss, and rising indebtedness. It is an economic and financial perversion of what global integration was supposed to achieve. For decades, the United States has been the largest single victim of this perversion. Absorbing the rest of the world’s excess output and savings—at the cost of deindustrialization and financial crises—has been America’s exorbitant burden.' The book takes the reader through the recent history (past 50 years or so) of the US, Chinese and German economies in a fair amount of detail (more than necessary to prove the thesis).

  22. 5 out of 5

    Dean1112

    Remarkable book that sheds light on the myriad connections between international economics/finance and public policy issues that shape the world around us which transcend borders. Policies implemented domestically, especially by countries of greater economic power in their respective spheres of influence (US, Germany, China, Japan), have subtle but resounding impacts on other countries and the daily lives of their citizens: distribution of wealth, unemployment, access to credit, healthcare and o Remarkable book that sheds light on the myriad connections between international economics/finance and public policy issues that shape the world around us which transcend borders. Policies implemented domestically, especially by countries of greater economic power in their respective spheres of influence (US, Germany, China, Japan), have subtle but resounding impacts on other countries and the daily lives of their citizens: distribution of wealth, unemployment, access to credit, healthcare and other social services, education, infrastructure. A central idea of this book is that governments will either implement policies consistent with spending or policies consistent with saving (investment), and countries which don't provide domestic consumers with adequate capacity to consume all goods produced domestically will result in current account surpluses which must be consumed elsewhere in the world. This leads to current account surpluses in countries where consumers don't have sufficient purchasing power, and current account deficits where domestic demand outpaces domestic supply (production). Current account surpluses and other economically competitive policies are beneficial to governments, but they often come at the cost of a reduction in living standards for the domestic population.

  23. 5 out of 5

    Sean Young

    This was not the revolutionary read I expected it to be, but I learned an awful lot about the politics and economics of trade imbalances. The key thesis - that the US can do little to change its trade deficit and the collapse in production that accompanies it - seems pretty reasonable, but I'm not an expert. It makes a decent case and the policy recommendations seem to be in line with other things I've read, and thus I mostly agree with them (just being honest here). I found the book a little bre This was not the revolutionary read I expected it to be, but I learned an awful lot about the politics and economics of trade imbalances. The key thesis - that the US can do little to change its trade deficit and the collapse in production that accompanies it - seems pretty reasonable, but I'm not an expert. It makes a decent case and the policy recommendations seem to be in line with other things I've read, and thus I mostly agree with them (just being honest here). I found the book a little breathless, a massive amount of information being dumped on me at once (if you are already familiar with the economies of Germany and China this is probably not going to be so bad). I don't generally like long books but this one could have stood to be a bit longer, in particular I would have liked to hear the authors give a little detail of what trade *should* look like: they say that having a trade deficit isn't necessarily bad they make it sound bad. I guess the ideal would be a world of what they describe as "rational investment": small imbalances that self-correct as prices rise in the surplus country, as described in classical economics. Is this possible? Generally when an economist uses the term "rational" it's a sign they're bullshitting, so I would have liked to hear more to reassure me that they were not.

  24. 4 out of 5

    David

    *The book integrates many different strands of research, history, and insight into a coherent narrative on how the global economy works *Rather than seeing the global savings glut (a la Ben Bernanke) and inequality (a la Amir Sufi and Atif Mian) as separate sources of credit expansions and financial crises, Klein and Pettis see the two as linked (inequality causes the global savings glut) *The two authors provide ample historical examples but I think the most compelling are their narratives about *The book integrates many different strands of research, history, and insight into a coherent narrative on how the global economy works *Rather than seeing the global savings glut (a la Ben Bernanke) and inequality (a la Amir Sufi and Atif Mian) as separate sources of credit expansions and financial crises, Klein and Pettis see the two as linked (inequality causes the global savings glut) *The two authors provide ample historical examples but I think the most compelling are their narratives about China and Germany, particularly China *The structure and argumentation of the book is muddled though *It is not clear what assumptions are needed to believe their story *It is not clear what claims are accepted facts and what are speculation *The argument is not segmented into clear parts *The book gets diverted on these long, pedantic historical tangents that don't neatly map into the main argument *The book would have been much better if it defined its scope and explained what questions it cannot answer (e.g., What level of inequality prevents financial crisis and trade distortions? How would a country know when it no longer has productive investment opportunities? When is global finance pushed into a country and when is it pulled? Why would the US continue to have the world reserve currency if it is so clearly harmful?)

  25. 4 out of 5

    Andreas

    This book was a real eye-opener. The authors explain how capital flows wreak havoc all over the world. Two mechanisms are central to the book. First, countries in which capital owners reap more of the rewards of productivity improvements than workers end up with excess savings (because the rich save a bigger chunk of their income). Second, these excess savings flow to other countries, pushing down interest rates and spurring consumption on imports. The countries receiving these inflows rarely ma This book was a real eye-opener. The authors explain how capital flows wreak havoc all over the world. Two mechanisms are central to the book. First, countries in which capital owners reap more of the rewards of productivity improvements than workers end up with excess savings (because the rich save a bigger chunk of their income). Second, these excess savings flow to other countries, pushing down interest rates and spurring consumption on imports. The countries receiving these inflows rarely make good use of all the cheap money, and usually end up overindebted. Klein and Pettis provide detailed descriptions of these phenomena in Germany, China and the US. Together with two papers by Mian, Straub and Sufi, this book provided me with a clear explanation for "secular stagnation" and the continuous decline of interest rates. Most economists excercise caution in tying the financial crisis to the enormous rise in inequality in the rich world, but this book and these papers identify the links between inequality, free movement of capital and the financial crisis. Very much recommended. The follow-up conversation between Adam Tooze and the two authors (to be found on YouTube) is also very insightful.

  26. 5 out of 5

    Elizabeth Lim

    the bads: i've clearly forgotten my econ degree (in fact this is JC-level econs) because i definitely glossed over a lot of the heavy economic mechanisms and explanations. also bad, i think the title is a little click-baity, there is some relationship to inequality (wealth hoarded by business owners leads to less salary for workers and less consumption and thus trade surpluses --> which mean deficits for others), but not as strong as i would've liked the goods: some compelling theses to add to yo the bads: i've clearly forgotten my econ degree (in fact this is JC-level econs) because i definitely glossed over a lot of the heavy economic mechanisms and explanations. also bad, i think the title is a little click-baity, there is some relationship to inequality (wealth hoarded by business owners leads to less salary for workers and less consumption and thus trade surpluses --> which mean deficits for others), but not as strong as i would've liked the goods: some compelling theses to add to your repertoire and reminders that current account deficits/surpluses are just technical measures. gives you a pretty holistic view of what really informs it -- government spending & fiscal policy, taxation and wealth transfer policies, self-insurance against economic shocks, and in the case of the US, status as the reserve currency. the last 3 chapters are probably the most enlightening as case studies of Germany, China and US, and it covers a fair bit of interesting history as well. worth the read if u can muddle through the econs

  27. 5 out of 5

    Robert

    This is an extraordinary book. It offers an extremely clear and accessible description of how the modern world economy works, focusing on how conditions within countries--most notably the ongoing struggles between workers and owners--shape trade and financial flows between countries. The authors argue that rising inequality in countries like Germany and China is the fundamental driver of trade imbalances in the world today: because German and Chinese workers are paid much less than their product This is an extraordinary book. It offers an extremely clear and accessible description of how the modern world economy works, focusing on how conditions within countries--most notably the ongoing struggles between workers and owners--shape trade and financial flows between countries. The authors argue that rising inequality in countries like Germany and China is the fundamental driver of trade imbalances in the world today: because German and Chinese workers are paid much less than their productivity, they consume far less than they produce, driving deindustrialization and asset bubbles in other countries. The chapter on Germany was particularly interesting: many observers consider Germany to be an exemplar of industrial productivity and sound financial management, but the authors argue that the opposite is the case--because of low German productivity growth, labor reforms were implemented to squeeze German workers, which forced asset bubbles onto Southern Europe and the United States. Food for thought!

  28. 4 out of 5

    John Calhoun

    This book argues for the following thesis: “Trade war is often presented as a war between countries. It is not: it is a conflict mainly between bankers and owners of financial assets on one side and ordinary households on the other — between the very rich and everyone else.” In essence, Pettis & Klein contend that surplus countries like China, the EU, or Germany intentionally transfer resources from their "99%" to support their "1%," such that those countries have tons of money saved because rich This book argues for the following thesis: “Trade war is often presented as a war between countries. It is not: it is a conflict mainly between bankers and owners of financial assets on one side and ordinary households on the other — between the very rich and everyone else.” In essence, Pettis & Klein contend that surplus countries like China, the EU, or Germany intentionally transfer resources from their "99%" to support their "1%," such that those countries have tons of money saved because rich folks save a lot more than poor folks. All that extra savings has to go somewhere, and so it finds its ways to places like the USA, Spain, or Greece that're willing to borrow against all those excess savings. Since homo sapiens can't resist the temptation of borrowing on favorable terms, and because homo sapiens create asset bubbles due to undeserved optimism, this predictably leads to periodic financial crises.

  29. 5 out of 5

    Richard Marney

    A fresh, thought provoking analysis of the link between inequality within countries and global (trade and financial) imbalances. The “war” referenced in the title is a form of a class struggle between capital and labour (the economic elite and the less affluent) rather than a clash of conflicting national interests in the narrow area of international trade. The authors use China and Germany as examples of increasingly unequal countries whose capital-intensive, export-oriented economic models hav A fresh, thought provoking analysis of the link between inequality within countries and global (trade and financial) imbalances. The “war” referenced in the title is a form of a class struggle between capital and labour (the economic elite and the less affluent) rather than a clash of conflicting national interests in the narrow area of international trade. The authors use China and Germany as examples of increasingly unequal countries whose capital-intensive, export-oriented economic models have been built on labour-income suppression at home and the sale of excess production abroad. The losers are not the importing (current account deficit) countries themselves as much as labour in both the exporting and these importing countries. The US represents the magnet for much of this excess goods supply and the recycled financial surpluses. Good for the top 1% (or 0.1%) and Wall Street, not for the common men and women, many of whom wear red hats!!!

  30. 5 out of 5

    Jeffreyalpert

    Good book, interesting thesis - basically trade deficits are a result of internal political decisions - if you muck around with markets and create inequalities, your local demand drops, and you export. It's kind of intuitive, but IMO it's hard to connect the dots all the way down to micro decisions - appears to wave away a good deal of complexity, but I guess that's just how macroeconomics works (which is why I never liked it). The German example is the clearest. Pretty different view of macroec Good book, interesting thesis - basically trade deficits are a result of internal political decisions - if you muck around with markets and create inequalities, your local demand drops, and you export. It's kind of intuitive, but IMO it's hard to connect the dots all the way down to micro decisions - appears to wave away a good deal of complexity, but I guess that's just how macroeconomics works (which is why I never liked it). The German example is the clearest. Pretty different view of macroeconomics vs. classical theory, enjoyed discussing this with my economist friends. This is one of these nonfiction books that you can stop reading 1/3 of the way through because you get it by that point. Worth a read, though, especially if you pair it with other inequality literature like Unbound to get a holistic view of the distortions inequality create.

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