AMERICA IS MORE INTERVENTIONIST THAN LAISSEZ FAIRE

Monica Prasad, The Land of Too Much: American Abundance and the Paradox of Poverty (Cambridge, Massachusetts, & London, England: Harvard U. Press, 2012) ("If the United States is so market oriented, so beholden to the weakness of labor, so liberal, and so suspicious of state intervention, where did the pattern of stricter drug regulation come form? Hundreds or thousands of Americans are walking around today with intact limbs and bodies because of the successful intervention of the American state against the market." Id. at 6-7. "All of the theories of comparative political economy--with their implications for our understanding of economic growth and poverty reduction--have been but in a picture of American history that is turning out to be incorrect." Id. at 7. "It is not hard to see why the belief in a weak American state persists, as the United States is different from other industrialized countries in many ways: Americans today are considerable richer than the citizens of other industrialized countries. They work more and use more energy than the citizens of other countries. Americans are less likely to be in unions and much more likely to be in jail, somewhat less likely to be unemployed, and likely to die a few years earlier despite much higher levels of expenditure on health. Wage inequality is higher in the United States than in other countries at the top and bottom of the income distribution. Americans pay lower taxes overall than citizens of other countries and have only recently legislated universal health care, fifty to a hundred years after other countries. There is less public ownership of business. Because of the smaller welfare state, there is more poverty in the United States. American labor regulations are harsher than those of other countries, repression of labor has been more violent in the United States, and there has never been a truly working-class party in the United States at the national level. Surveys find Americans more likely to believe in God, to pray, and to attend religious services than citizens of most European countries. American foreign policy often goes it own way, often despite strenuous European opposition." Id. at 7-8 (citations omitted). "This book is an attempt to make a fresh start in comparative political economy by acknowledging what the historical scholarship has to teach us but using this knowledge to answer the question posed by comparative literature--why are there such differences between the United State and Europe? Why does the American state intervene so heavily in some ways that help workers, consumers, and the poor-- such as consumer regulation and taxation--but not in other ways--such as a welfare state? " "In this book I argue that the United states has greater poverty because a set of progressive interventions backfired." Id. at xii. From the bookjacket: "The Land of Too Much presents a simple but powerful hypothesis that addresses three questions: Why does the United States have more poverty than any other developed country? Why did it experience an attack on state intervention starting in the 1980s, known today as the neoliberal revolution? And why did it recently suffer the greatest economic meltdown in seventy-five years?" "Although the United States is often considered a liberal, laissez-faire state, Monica Prasad marshals convincing evidence to the contrary. Indeed, she argue that a strong tradition of government intervention undermined the developed of a European-style welfare state. The demand-side theory of comparative political economy she develops here explain how and why this happened. Her argument begins in the late nineteenth century, when America's explosive economic growth overwhelmed world markets, causing price declines everywhere. While European countries adopted protectionist policies in response, in the United States lower price spurred an agrarian movement that rearranged the political landscape. The federal government instituted progressive taxation and a series of strict financial regulations that ironically resulted in more freely available credit. As European countries developed growth models focused on investment and export, the United States developed a growth model based on consumption." These large-scale interventions led to economic growth that met citizens needs through private credit rather than through social welfare policies. Among the outcomes have been higher poverty, and a housing bubble fueled by 'mortgage Keynesianism." This book will launch a thousand debates.").