Economism | James Kwak

Summary of: Economism: Bad Economics and the Rise of Inequality
By: James Kwak

Introduction

Dive into the world of economism as James Kwak explores how oversimplified economic ideas have manipulated people and promoted inequality throughout history. This book summary covers how economism has permeated academia, politics, and mass media, dissecting the real-world consequences of such theories. As you read, you’ll learn about the dangers of oversimplification in economics and how it has bred a power imbalance among the wealthy and ordinary citizens. Armed with this knowledge, you’ll be better prepared to recognize the impact of economism on your life and society at large.

The Danger of Economism

In “Economism”, James Kwak explains how the ideology based on oversimplified ideas has influenced US policy, producing inequalities. Economism, a product of academia, politics, and mass media, is an ideology that furthers the interests of the powerful. Kwak’s analysis seeks to debunk the idea that certain economic theories help maintain economic balance, as he believes it to be a fallacy. Experts agree, calling his book a myth-buster and an essential resource for resisting this pathology. Kwak’s insight into the dangers of economism is a must-read for those concerned about economic inequality.

The Harmful Oversimplification of Economism

Kwak’s critique of economism exposes the flaws of applying an oversimplified economic theory to complex issues. He shows how concepts like supply and demand, market equilibrium, and incentives are value judgments disguised as objective facts that benefit the wealthy and perpetuate inequality.

The Dark Side of Economic Arguments

Economic arguments have traditionally favored the wealthy, not ordinary individuals defending social Darwinism, according to Kwak. This changed with the Great Depression and Keynes’ call for government management of the economy. However, by the late 1970s, conservative research was ushering free-market ideology to law schools and economics courses.

The Fallacy of Economism

In “Economism and the Economics of Political Power,” James Kwak reveals how power and money drive the flawed concept of economism, the ideology that assumes material prosperity is the purpose of social organization. This concept largely shapes public policy in the United States and benefits the top 1% of wealth holders. According to Kwak, powerful organizations such as General Electric, IBM, and the Council for Economic Education reinforce economism by teaching it to their employees and creating courses for schools and businesses. Even Republican and Democratic political campaigns rely on economism, claiming that income inequality incentivizes individuals to raise the value of their work. However, Kwak argues this is self-serving gibberish and that the increasing income inequality witnessed today is an injustice that needs to be undermined. In response, Kwak seeks to educate readers on not succumbing to economism and fighting against this dynamic.

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