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Who Knew?

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I’m reading Jeff Madrick’s new book, Seven Bad Ideas: How Mainstream Economists Have Damaged America and the World [2].  While written well, it’s filled with strange ideas.  For instance, here’s one of Madrick’s examples of the (correct) proposition that democracy and widespread prosperity do not necessarily occur together:

On the other hand, prosperity hardly guarantees democracy and protection of human rights.  Russia became wealthy in the 1930s but was a dictatorship until the 1980s [p. 26].

Russia became wealthy in the 1930s…. !!  Really?  What remotely sensible concept of ‘wealth’ or ‘wealthy’ can Madrick possibly have in mind to make this claim anything but obscenely mistaken?

This statement about Russia’s alleged wealth in the 1930s is bad enough, but it is made worse by the fact that it immediately follows Madrick’s example of how democracy doesn’t guarantee prosperity.  That example is the United States since 1980 – a time when “economic hardship” is said to have become “a characteristic of American life.”

So Russia in the 1930s was “wealthy,” while America since 1980 has been a land of “economic hardship.”  Even if we grant Madrick some poetic license (as we should), and even if we consider that he might here be talking about changes in economic fortunes rather than about absolute levels of economic fortunes, the oh-so-vast differences in the material standards of living that separate ordinary Russians in the 1930s from ordinary Americans today are so huge as to make Madrick’s argument ridiculous.  Reading this analysis does nothing to give me confidence that the rest of the book is sensibly reasoned and well-researched.  (I’m now about half-way through the book and, indeed, it hasn’t improved.)

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