Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer

by Dean Baker

There has been an enormous upward redistribution of income in the United States in the last four decades. In his most recent book, Baker shows that this upward redistribution was not the result of globalization and the natural workings of the market. Rather, it was the result of conscious policies that were designed to put downward pressure on the wages of ordinary workers while protecting and enhancing the incomes of those at the top. Baker explains how rules on trade, patents, copyrights, corporate governance, and macroeconomic policy were rigged to make income flow upward.

Genres: Economics, Politics, Nonfiction, Business, Political Science, Activism, Social Justice

258 pages, Paperback

Published October 6, 2016

About the author

https://deanbakerpoetryandsongs.com

"Dean is a combination of thought and torment that has made him write more than a baker's dozen of fine poems.. he might produce a collection that could astound us all." - Irving Layton
Irving Layton is one of Canada's foremost poets, nominated twice for the Nobel Prize for Literature; teacher, friend and mentor to Leonard Cohen, and the man to whom Leonard dedicated his latest book.
My poetry has appeared in hundreds of literature magazines world wide, recorded, and online.

Reviews

[Justin Evans · Rating 3 out of 5]

Do I agree with many of Baker's points? Yes: there is no such thing as a neutral, natural market outcome; economic outcomes are always choices made by human policy-makers just as much as they are by human producers and consumers. Would less inequality be nice? Yes.

Is this a good book? Not particularly. It is clearly written, but also written with rather too heavy a hand; Baker's statistics speak for themselves, for the most part, but his rhetoric suggests some grand upper middle-class conspiracy to defraud, well, someone else. For instance, anti-inflation policy "is a commitment by the government... to keep wages down." That's a bit like saying "Dutch dykes are a commitment by the government to jack up the price of water-front properties." Are the two things connected? Yes. But there are plenty of good reasons to pursue anti-inflation policies, and plenty of bad reasons, and keeping wages down is not generally the first one that leaps to mind. Again, this is a question of rhetoric.

It is also a question of context. Baker suggests that the strength of the US dollar is a policy decision made by the US government to, duh, make life harder for the working class. If the government really wanted to, it could somehow get China to help weaken the dollar vis a vis China's currency. But there's no reason to believe that that is true: the weak Chinese currency helps China far more than anything the US could offer as a trade-off. Similarly, central banks focus on anti-inflation, not because of nefarious underhanded dealings, but because they have to focus on something, and it turned out that focusing on currency exchange rates wasn't a very good method for central banking. Could they have chosen something else to focus on? Yes. But they had focused on full employment in the past, and under that economic system, it didn't work. Baker thinks they should focus on full employment again. He might be right. But he constantly underestimates how hard it would be to bring out the changes he's calling for.

He also lacks much comparative breadth. US doctors are over-paid, but, I'm guessing, not primarily because the industry is heavily protected. The Australian medical profession is highly protected, but not as highly paid, nor as highly specialized. Why? Because Australia has universal healthcare, not privatized health insurance. With privatized health insurance, it's in everyone's economic interest to make medical procedures as expensive as possible: that way, the doctors make more money, the hospitals make more money, Pharma makes more money, and the patient doesn't see too much difference, because health care costs are taken out of the pay packet, rather than handed over at the counter. Install a system under which it's in most people's interests to keep medical costs down, and you'll have fewer trips to specialists, more GPs, cheaper pills, and so on. None of which is to say that medicine needs to be protected. Again, I agree with so many of Baker's points, but his rhetoric is so irritating that I find it hard to see my agreements.

In other words, he seems to have learned many lessons from contemporary 'right-wing' economics: the heartlessness, the unwillingness to examine the actual world rather than models, and so on.

On the other hand, this is a policy polemic, and part of the point is to make readers believe that change is possible. Many of his readers will be heartless context-and-history deniers who also have no interest in helping actual human beings. Baker wants to help people. He insists that major change is possible. Here's hoping he's right.

PS: he seems to have no idea how publishing works for novelists, poets, and essayists, who want to earn a living from their work. He essentially equates the economic effects of copyright and patent protection. But there's a pretty big difference between "it would be nice if nobody else could make money off the novel I spent three years writing" and "it would be nice if I could sell this life-saving cancer medication at 1000 times the production cost."

[D.L. Morrese · Rating 3 out of 5]

The economic system of the U.S. is rigged. It consolidates wealth in the hands of a very few at the expense of many. Outrageously high pay for CEOs, rights holders, capital owners, professionals, and financiers is a drain on the overall economy. Very little if any of this disproportionate compensation is justified in terms of improvements to efficiency, quality, or performance. I think this is obvious enough to anyone who has been paying the least amount of attention over the last forty years. This book isn't the best explanation of this that I've seen. The academic style makes for a fairly dull read, but it doesn't rise to the status of a scientific study. It often shows correlations but falls short of proving causation, and it frequently elevates suppositions to the status of explanations. It could also have been better edited. That said, its overall conclusions have merit.

[Greg · Rating 5 out of 5]

One of the most amazing things about the time we live in is that why many of the "average" citizens have come to endorse the idea that "the system" has left them behind, it is remarkable how little they have connected the dots between the operation of the current structure of capitalism -- with its obvious bias towards the already rich -- with their fate.

Instead, they have reacted to the nationalist populist rhetoric (almost entirely empty of substance or of specific policy proposals) that blames "the elites" -- that is, those others than themselves -- for their plight. I better understand how both populism and socialism can have almost identical "pulling power" to desperate people, but also why -- as in the '30s -- the response of the average "Joe" or "Jane" is to choose nationalist populism which tends to be more clever in adopting and adapting symbols of "the people" and connecting them to a past "golden age."

We saw that reality played out in the '30s, and it has taken a fresh and renewed threatening face in recent years throughout the West.

How different things might be if more persons would read Dr. Baker's remarkable book in which he decimates the idea that the current system is the "only possible system" and that, moreover, "its determination as to who are the 'winners' and who the 'losers' is entirely a consequence of its structure. Moreover, this structure is NOT inevitable or the "only way it could be." It is, rather, the consequence of the power structure designing and reinforcing a system that promotes their own interests more than it does of the "average" or "common" people.

Listen to Dr. Baker:

“…we accept as givens not just markets themselves but also the policies that structure markets. If we accept it as a fact of nature that poor countries cannot borrow from rich countries to finance their development, and that they can only export manufactured goods, then their growth will depend on displacing manufacturing workers in the United States and other rich countries.
“It is absurd to narrow the policy choices in this way, yet the centrists and conservatives who support the upward redistribution of the last four decades have been extremely successful in doing just that, and progressives have largely let them set the terms of the debate.
“Markets are never just given. Neither God nor nature hands us a worked-out set of rules determining the way property relations are defined, contracts are enforced, or macroeconomic policy is implemented. These matters are determined by policy choices [designed by] elites…to redistribute income upward. Needless to say, they are not eager to have the rules rewritten – which means they also have no interest in even having them discussed.” [pp.8-9]

His purpose throughout is to demonstrate how we, in fact, HAVE choices, if we but understand how artificial the rules of the game actually are.

“Government policy shapes market outcomes…structures financial markets…allows for some individuals to get enormously rich…determines the extent to which individuals can claim ownership of technology and how much they can profit from it…sets up corporate governance structures that let top management enrich itself at the expense of shareholders…and…determines whether highly paid professionals enjoy special protection from foreign and domestic competition.” [pp. 217-18]

Highly recommended!

[Andrew]

Is this a fairly good diagnosis of some of the more pressing issues in the global economy? Yes. Could this be a gateway drug to more left-leaning economics? Also yes. Are the solutions in here good? Well... sometimes.

While markets aren't going away any time soon – any form of socialism that is imaginable within our lifetime is pretty much by necessity going to have market dimensions, however they may manifest themselves – Baker still accepts the supremacy of the market, and his argument is simply that it needs re-jiggering. There's not much talk of universal healthcare, for example, which seems pretty goddamn obvious. However, like I said, gateway drug, with some salient points to learn from.

[Jera Igo · Rating 5 out of 5]

I was thinking about the government and wondering why some people favor policies designed to make the rich richer, when many of the people voicing conservative opinions aren't particularly rich, and don't benefit from the policies they defend. That's a real riddle to me. Are the wealthy such skillful propagandists that people who don't know better just get scammed, to not only go along with policies that subsidize the wealthy at everyone else's expense but also, to vociferously defend them? "Don't take money from the business tycoons! They worked hard building their businesses making products we all need, and they deserve to wallow in their opulence!" Is there a misplaced identity in the factory worker, toiling away while listening to hate mongering against the lower classes on her radio, thinking, as oppressed as she is, at least she's better off than someone else? Or is it like the victim of a kidnapping who comes to take on the opinions of his captors? Is there brain washing going on? I just can't believe that the 99% are letting the 1% get away with what they're getting away with! Do we really think that we are just one lucky gamble away from joining the super-rich? We don't want to destroy that lifestyle, because there's a chance we'll get there too?

I read, Rigged: How Globalization and the Rules of the Modern Economy Were Structured to Make the Rich Richer, by Dean Baker. The author explains how a laissez faire economy is impossible because there has to be rules of some kind that will affect the outcome in some way. These rules will benefit one class of people to the detriment of another. The people benefiting don't want the rules to change, unless they can skew them to benefit themselves even more. They protest any attempt to change the rules for a more agrarian outcome by screaming, "Free market economy!"

"There is no scenario in which the market works alone. Government policies will affect the level of output in the economy. The only question is whether we want to design these policies explicitly to meet certain goals or if we want to pretend we don’t notice the impact of the policies we have put in place." Dean Baker, Rigged, 11%.

Baker examines five areas in which policies deliberately set by the government, or left in place by the government, have had the effect of ratcheting up the wealth of a small group of people, while the majority have watched their own standards of living plummet, within the last four decades in the United States. The book implies that a more equal distribution of wealth can be achieved by the adoption, by the government, of different policies in those five areas. I read it twice, taking notes the second time, because I really want to understand this.

"In the case of macroeconomic policy, the United States and other wealthy countries have explicitly adopted policies that focus on maintaining low rates of inflation. Central banks are quick to raise interest rates at the first sign of rising inflation and sometimes even before. Higher interest rates slow inflation by reducing demand, thereby reducing job growth, and reduced job growth weakens workers’ bargaining power and puts downward pressure on wages. In other words, the commitment to an anti-inflation policy is a commitment by the government, acting through central banks, to keep wages down. It should not be surprising that this policy has the effect of redistributing income upward." Dean Baker, Rigged, 5%.

According to Baker's Rigged, there is a cluster of consequences to keeping interest rates high. They include:
Low inflation
Rise in the value of the dollar relative to other currencies
Upward redistribution of wealth
Reduced consumption or demand
Slow job growth
High unemployment
Downward pressure on wages
Weakened worker's bargaining power
Longer hours for those who remain employed (if company provides benefits)
High US trade deficit (we are importing goods faster than we are paying for them with either exported goods or money)
Manufacturing jobs are lost
Why the government has set these scenarios as priorities has to do with the goals of the people making the decisions.

The second area in which, according to Baker, wealth is being redistributed upward, is the structure of the financial industry and it's regulation. Baker compares the financial industry to the trucking industry in that as the trucking industry moves goods from place to place, the financial industry handles capital and securities. The financial industry has undergone a rapid growth in the last few decades, "from 4.5 percent of GDP in 1970 to 7.4 percent in 2015." (Baker 19%). He points out that all of this growth does not seem to improve the effectiveness of the industry in serving it's function and, "waste in the financial sector provides income for some of the highest earners in the economy." Dean Baker, Rigged, 19%.

"Excessive trading is the greatest source of rents in the financial sector, and subjecting it to a financial transactions tax (FTT) would go a long way toward bringing taxation in the financial sector in line with the rest of the economy." Baker, Rigged, 20%

Government policy has been to guarantee the solvency of huge banks. The solvency of huge banks is guaranteed at tax payers' expense, too big to fail (TBTF) insurance. Baker believes that the banks should be asked to downsize themselves, break themselves up to their size of the 1990s or 1980s. (Baker, Rigged 25%)

The third area covered in Rigged to explain why wealth has been redistributed upward toward the already wealthy during the last few decades, is patent and copyright protection. Protections for pharmaceutical products are more important to the government than preventing the loss of manufacturing jobs.

"When government officials sit down with their counterparts from China and other countries, they can negotiate over the currency policies that these countries are pursuing. If negotiators opt to make currency a priority, they can likely get these countries to agree to increase the value of their currencies relative to the dollar... There will be a trade-off for focusing on currency values, meaning that other items will be given lower priority. For example, the United States has pressed China for increased access for the financial industry, the telecommunications industry, and retailers, and it has pressed China and other developing countries to devote more resources toward enforcing U.S. patents and copyrights." Baker, Rigged, 17%

"Over the last four decades these protections have been made stronger and longer. In the case of both patent and copyright, the duration of the monopoly period has been extended. In addition, these monopolies have been applied to new areas. Patents can now be applied to life forms, business methods, and software. Copyrights have been extended to cover digitally produced material as well as the Internet. Penalties for infringement have been increased and the United States has vigorously pursued their application in other countries through trade agreements and diplomatic pressure" Dean Baker, Rigged. 5%

So basically we say to China, "We'll keep our currency high relative to yours so you can have us as a market for your manufactured products. We just ask that you honor our patents on our pharmaceuticals to protect the exorbitant income of our 1%"

The 4th way income has been redistributed upward during the past several decades, according to Dean Baker in Rigged, is the pay of corporate executive officers (CEOs).

"The CEOs who are paid tens of millions a year would like the public to think that the market is simply compensating them for their extraordinary skills. A more realistic story is that a broken corporate governance process gives corporate boards of directors — the people who largely determine CEO pay — little incentive to hold down pay. Directors are more closely tied to top management than to the shareholders they are supposed to represent, and their positions are lucrative, usually paying six figures for very part-time work. Directors are almost never voted out by shareholders for their lack of attention to the job or for incompetence." Baker, Rigged 5%

The 5th way that the wealth gap has increased within the last few decades, according to Dean Baker in Rigged, is by protections to the pay of doctors, dentists and lawyers.

"Finally, government policies strongly promote the upward redistribution of income for highly paid professionals by protecting them from competition. To protect physicians and specialists, we restrict the ability of nurse practitioners or physician assistants to perform tasks for which they are entirely competent. We require lawyers for work that paralegals are capable of completing. While trade agreements go far to remove any obstacle that might protect an autoworker in the United States from competition with a low-paid factory worker in Mexico or China, they do little or nothing to reduce the barriers that protect doctors, dentists, and lawyers from the same sort of competition. To practice medicine in the United States, it is still necessary to complete a residency program here, as though there were no other way for a person to become a competent doctor." Dean Baker, Rigged, 5%

"The United States will spend more than $3.3 trillion in 2016 on health care..., more than $10,300 per person and roughly twice the average for other wealthy countries. But for all this extra spending it is not clear that we get better quality health care. By some measures, like life expectancy and infant mortality rates, the United States ranks low among rich countries. While treatment for some conditions is better here, we cannot say that the quality overall is better." Dean Baker, Rigged 55%

"The low density of doctors in the United States might ... be a factor in the pay gap. The United States has 2.6 physicians per 1,000 people ..., compared with 2.8 in the United Kingdom, 3.3 in France, and 4.0 in Germany. But the relatively low density in the United States is a matter of deliberate policy. In 1997, the Accreditation Council on Graduate Medical Education decided to limit medical school enrollments in the United States, which had previously been growing more or less in step with population growth. Dean Baker, Rigged 57%

I have had dental work done in Mexico and in the United States and I can't say that it is any better in the United States. Why the difference in cost?

"[T]he average pay of U.S. dentists is almost 40 percent higher than in the next highest country (Japan) and more than twice as high as in the United Kingdom, Italy, or Finland,... [T]he law requires that dentists graduate from an accredited dental school in the United States (an exception for Canada began in 2011). Dentists protect themselves from domestic competition by limiting the scope of practice of dental hygienists, who often have the skills to perform many of the tasks performed by dentists." Dean Baker, Rigged 58%

I learned a lot from this book. I used to think that boycotting Chinese manufactured goods would do some good. I even tried to do that, but it is next to impossible. A cell phone, DVD player, or almost anything you need, is made in China, Vietnam, Malaysia etc. It is not true that people over there will work for less and accept substandard working conditions. Even if that is part of the truth, it's not the whole truth. The truth is the decision makers have decided to protect the pay of CEOs, doctors, dentists, lawyers, Pfizer, Microsoft, Disney and Chase Manhattan, and let the rest of our jobs go overseas. We should demand that provisions be put in place to limit the pay of CEOs, that the interest rate be lowered, that a system be set up to finance research and development that is less costly and more efficient than patents, that a trading tax be levied on stock exchanges, that the large banks be broken up, that general practitioners, nurses, medical assistants, dental assistants and paralegals be allowed to do work they are educated and qualified for, that limits to the number of doctors and dentists being allowed to practice in this country end, that the tax codes be simplified and loopholes be done away with.

"[M]ost high-end earners are probably not like the counterfeiter who does nothing productive, but insofar as they are paid more than is necessary for their services, their excess pay does come at the expense of the rest of us. This means that if a CEO is paid $30 million, but someone else would do as good a job for one half or one third of the pay, then the rest of us are effectively subsidizing this person’s pay. The channels through which the money goes from the rest of us to the high-end earners may not always be clear, but their good fortune nonetheless imposes a cost on the rest of us." Dean Baker, Rigged, 8%.

[Richard Thompson · Rating 4 out of 5]

The fundamental point of this book is that there is no such thing as a neutral market outcome because all markets are shaped by government policy. Deregulation is just a choice of one set of policies over another. The ones that we have chosen in the US over the past few decades have undeniably caused a huge growth on income inequality, which Baker argues, I think correctly, has had a adverse impact on overall prosperity. Although I have personally been a beneficiary of protectionist practices in the legal profession and the extension of the copyright monopoly, I believe that we would all be better off if we could find ways to change government policy to have less wealth transfers from the general population to those who are already well off. I don't think that all of Baker's suggestions would work, but he makes a persuasive case that there are non-disruptive ways to implement policies that would gradually reverse some of the current policies that promote income inequality. One of his suggestions that would be easiest to implement without major disruption is to change monetary policy to focus on full employment, even if the cost of doing so is a moderately greater inflation rate. Most of us take it as a given that inflation is bad, but a little inflation isn't so terrible particularly if it enables us to create a few more productive jobs.

[Alicia Fox · Rating 2 out of 5]

This book presents a series of economic policy changes which would tip the United States away from the rich getting richer and the poor getting poorer. It's an eye-opener for those who think the current system is fair and unbiased, and are unaware that U.S. laws are skewed in favor of corporations and the wealthy.

The only problem I have with this book is its insistence that merely changing the laws back to what they once were will fix everything. There's no expressed understanding that so long as powerful corporations exist, these corporations will work to get laws which serve their interests (like the ones we currently have) back on the books. Until we realize that capitalism always works against us, unfairness will resurface again and again.

[Mathew Millet · Rating 4 out of 5]

Markets aren't something that exist independent of property, and property isn't something that exists independent of government. Everything the government does affects the market. It's naive to think we'll "leave it alone" as it doesn't exist in a vacuum. It's not some rock that can be independent of our policies, and it's not something intrinsically good or bad to be reigned in or left alone. As the author states at the end, this is the real world. Some utopian hypothetical ideal of anarchy aside, whether we favor government policies that benefit only specific people in a market or not is up to us.

[Road Worrier · Rating 3 out of 5]

Interesting information about how keeping inflation down prevents full employment. Some other stuff about high paid professionals and CEO salaries not obeying the principle of free markets that was less eye opening. Various suggestions on how to address these issues, though appreciated, seem far fetched with our current political climate. Some of the ideas and revelations felt a bit sophomoric, so I was surprised to look up Baker and discover he was 58 years old when he wrote this... I was expecting someone who was in their twenties, perhaps just after they finished their dissertation.

[David Sogge · Rating 5 out of 5]

In clear prose and rigorous use of essential economic principles, this book cuts through the fog of baffelgab and biases in mainstream reporting and editorializing to spell out just how today's market players mislead us, pilfer our pockets and laugh all the way to their banks/secrecy jurisdictions. The book is free. It can be downloaded from: http://deanbaker.net/books/rigged.htm

[David Dayen · Rating 4 out of 5]

Dean Baker is unique among progressive economists in that he challenges deeply-held beliefs about market outcomes. Before you start in with wondering how to design a tax and transfer system that appropriately expands opportunity and fights poverty, use this book as a companion, to tear down the structures that create inequality before one dollar of tax ever goes into the federal Treasury.

[rubiscodisco · Rating 4 out of 5]

"Pretending that the distribution of income and wealth that results from a long set of policy decisions is somehow the natural workings of the market is not a serious position[, but] it might be politically convenient for conservatives who want to lock inequality in place. It is more a politically compelling position to argue that we should not interfere with market outcomes than to argue for a system that is deliberately structured to make some people very rich while leaving others in poverty."

This is the thesis of Baker's book: the idea that the free market is an impersonal, un-guided phenomenon that if left unchecked causes severe wealth inequality and all the evils of late stage capitalism is a fabricated illusion.

Our economy is causing severe disparity and injustice not because the free market always and inherently causes these problems, but because of policy decisions (that for the most part have gone under the radar of moral and critical scrutiny) that have shaped the Invisible Hand into a cudgel against the poor. To put it another way, he is saying that if governments were to only chose a more prudent economic policy, the great algorithm of the free market has the potential to churn out a far more egalitarian outcome.

Is he an effective writer for popular readership? Yes. This is not my field and yet I didn't find it too difficult to understand nor too dense to tackle. He keeps things short and concise and he gives some concrete examples to ground his theory. Do I agree with him? Ehhh.

As an American, he has this idea that conservatives, who are motivated to keep the status quo or a rigged free market, are wrongly falling back on the argument of "we don't want a bloated, interventionist Big Government". His point is that actually, even in the ideal policy of fiscal conservatives, the government is far from taking a hands-off approach, and since we're already involved in regulating the system anyway (albeit currently highly in the favor of the elite), there's many other configurations of economic and fiscal policy we can try which will direct the free market towards more just outcomes.

My thing is that that doesn't really address the conservative argument that most of the new policies that he is proposing will cause more administrative duties to be placed onto the shoulders of government. Making the NIH responsible for national drug research agendas, a state-regulated patronage system for the arts, these are all Big Government stuff. Not necessarily a bad thing in my opinion, but I feel like he's leaving himself open to an obvious line or criticism from conservative thinkers.

All in all, the author is arguing for a way we can make the system more fair for the poor, less rigged for the rich, while still working within the framework of capitalism. Nary a whiff of socialist ideals can be found in this book. It's the sort of thing you would give to a business major or neoliberal economist to make them feel like they're totally being progressive without scaring the shit out of them and giving them nightmares about guillotines. This is not the book where we examine the inherent morality of our current capitalist system, when in fact, that's exactly the kind of thing we need to be doing in these trying times.

[Aaron · Rating 4 out of 5]

Dean Baker is a somewhat perplexing economist. On one hand, his policy and analysis of policy is brilliant. He strips away much of the hypocrisy of neoliberal and conservative economics and exposes the way they reinforce abd continue the upward flow of capital to the richest members of society at the expense of everyone elese. With these issues in mind, He makes policy suggestions that seek to correct these policies and allow for capital to flow in the direction of the rest of society.

On the other hand, he refuses to look at certain policies that could deliver faster relief to the members of society that have become marginalized. There is no mention of universal healthcare (a fact made baffling by the fact that DB pushes for policy that would objectively be harder to put in place than universal healthcare). There is no serrious mention of income tax reform (there is great talk of coprate tax reform however). Finally, there is no mention of a basic minnium income..... The most talked about policy advocated by wonks seeking to address inequality and globalization.

The refusal to address these issues by the economist is a bit of a let down, but to be fair, there are a lot of excellent books on tax reform, healthcare, and BMI. There are few looking at how the current rules of Capitalism in America are tilted to give the most to the rich. There are few books that seek to educate progressives in economic thought to prepare them for debating the subject with the passionate conservative base who feel (wrongly in my oppinion) that they know what is best for the economy. There are also few books that swing there criticisms to the rise of neoliberalism in the Democratic party..... And how that policy has betrayed the traditional base of the Democratic party (the poor and middle class).

This book touches on those issues, and in that respect is a breath of fresh air. Some of it's policy feels kinda pointless (why would we need a system to import more doctors when universal healthcare would work so much better?), But others are amazing. The look at patient laws gives a lot to think about. His idea on changing coprate income tax to a voluntary system of stock issuance is brilliant.


All this good material makes up for DB's policy blindside's. Check it out asap (esp since it's free).

[Julien · Rating 5 out of 5]

In my view, a companion piece to Dean's earlier work "The Conservative Nanny State". This follow-up breathes new life into the discussion, elaborating on prior points and adding new perspective and detail to the modern realities playing out in a market that in no way, shape, or form deserves to be labeled "free". Essential reading for anyone wanting to understand the myriad of ways that wealthy and powerful interests are very carefully and intentionally structuring global markets in order to funnel wealth and income into very few hands. This book annihilates any debate about the necessity of government involvement or free market fundamentalism, replacing it with the simple observation that government involvement in the market is a fact and quite often enthusiastically welcomed and utilized by those who claim to despise it the most for their very own narrow interests.

[Gary · Rating 4 out of 5]

quote from book. We need to be realistic.

"Government policy shapes market outcomes. It determines aggregate levels of output and employment, which in turn affect the bargaining power of different groups of workers. Government policy structures financial markets, and the policy giving the industry special protections allows for some individuals to get enormously rich. Government policy determines the extent to which individuals can claim ownership of technology and how much they can profit from it. Government policy sets up corporate governance structures that let top management enrich itself at the expense of shareholders. And government policy determines whether highly paid professionals enjoy special protection from foreign and domestic competition.

[Justin · Rating 2 out of 5]

Was ok, too much of the author makes a point then gives example or statistics and not nearly enough of a narrative. Sometimes a little more story brings the point home better.
If you're curious though, in the authors words, "the point of this book is that the distribution of income can be hugely altered by restructuring the market to produce different outcomes."

[Erik · Rating 2 out of 5]

This is basically just a third edition of the book Baker keeps writing. I’m on board with the policy agenda broadly speaking but whether from lack of novelty or actual change in clarity, it feels like diminishing returns.

[Brian · Rating 3 out of 5]

Informative. Eye popping information and solid "out of the box" thinking for problem solving. Great read for the professional and the layman.

[Hongjian Wang · Rating 3 out of 5]

interesting. Yet a little bit lengthy

[Etienne Jaulin · Rating 1 out of 5]

C’est chiant. Great ideas although unrealistic because the U.S. system is supported by the very people it oppresses. Utopia !

[John Mihelic · Rating 4 out of 5]

On one level, I’m glad that Baker makes his work freely available. Anyone can download his last three books that I know of off the CPER website. I bought the hard copy because I hate trees so much. But on another level, the fact that he doesn’t push his work out through a traditional publisher makes it so that there’s no publicity push for his work and potential readers aren’t made aware of his work.

And the thing is that Baker needs to be read. What makes Baker unique is his look at globalization and trade, where what we call free trade has really been a method to endanger the jobs at people at the bottom but the people at the top have job protections. You see manufacturing going out, but we’re not importing new doctors to drive the price of medicine down. It’s the flip side to the coin that people think of more when they speak of the ill effects of globalization and free trade. Not only are some left behind, we pay more. And it’s all here, with nice charts and graphs. We’re entering an era of protectionist rhetoric in part because the gains from globalization have been oversold to so many people. There is a way to do it right, but we’re losing that opportunity from an electoral perspective.

[Dmitri Wolf · Rating 5 out of 5]

While the prevailing idea seems to be "Tax the Rich" there are many other ways to deal with the problem of income inequality. Baker explores several and makes compelling cases.

[Joel]

"Rigged" is a free book that should be read by everyone. It gives the reason for our vast inequality: rent-seeking. In other words, there are areas of the economy in which competition is limited by government policy so that certain people earn more than they otherwise would. This doesn't just distribute wealth away from the 90% to the top 10%, but it also destroys wealth in the process (deadweight loss). Baker gives detailed descriptions of several areas of our economy that rely on rent-seeking including finance, CEOs, professionals, and owners of intellectual property.

The best part of the book, though, is that Baker does more than describe the problems. He also offers common-sense policies that could rein in these abuses. My favorite is increasing public financing on the model of the National Institute of Health to the levels of research done by Big Pharma. Grants/Contracts would be awarded for research that would have to be "copyleft" instead of copyright. This means the research is open for anyone's use as long as what they use it for is also open to anyone's use. This would lead to much faster research because all the results would be shared (instead of kept secret for fear of competition by Big Pharma), companies wouldn't duplicate research, and many other reasons that Baker explains. Most importantly, there would be no patent on the drugs developed, so that it could be put cheaply into generic production at a huge saving to purchasers of medicine. This plan would significantly lower drug costs while simultaneously increasing the speed of research.

The book has many other good policies, and it could almost be used as a political platform in itself.