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The End of Normal

The Great Crisis and the Future of Growth

James K. Galbraith

Free Press, 2014

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James K. Galbraith, a left-leaning economist like his famous father, John, paints a broad picture of the economic situation in 2014 and its lasting changes. He explains why many experts continue to wait for “normal” to reappear, while explaining why it will not and offering pointers on coping with an unknown future. He provides a critical survey of current economic debates, an interpretation of the financial crisis, an overview of the 1970s, and a discussion of the job-destroying aspects of the Internet and the digital technology wave. Drawing on the themes of raw material and energy, Galbraith challenges the accepted historical narrative. He elbows competing arguments aside while criticizing right-wing politics and free-market academia. Though he presents few revelations, Galbraith provides a wise, commonsense distillation and backs up the serious assertion of his book’s title. While always politically neutral, getAbstract recommends Galbraith’s viewpoint – which may prove insightful over time – to students, policy makers, investors and anyone seeking greater understanding of the functioning of the US economy.

Summary

“Normal” Economic Conditions

Although the recent financial crisis proved dramatic and destructive, most economists and other commentators have commonly framed their discussion of the recession around the return to what they consider normal, healthy, economic growth conditions.

They have generally labeled the crisis as a jolt to the body of the US economy, inferring a medium-term return to good health. For mainstream forecasters, “the worse the slump, the faster the rebound.” They continue to believe in a revival, even as “the start of a full recovery kept receding into the future like a desert mirage.”

These economists use models based only on data from the prosperous, stable postwar period, “the gilded cage of statistical history.” Experts forecast a return to normal, because that is what has always happened in the decades since World War II.

Economists who wish to look further back into economic history – or who wish to focus on raw materials or energy issues – remain outside the mainstream of this strategy, even as the conventional environment for economic analysis discourages “curiosity about those earlier matters.”

Creating Normal

Typical...

About the Author

University of Texas professor James K. Galbraith is a senior scholar with the Levy Economics Institute at Bard College. His books include The Predator State and Inequality and Instability.

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M. D. 7 years ago

good