Economics in a Changed Universe

A revolution in economics, politics, and international affairs has been shaped by the new economics of information. For the first time, we are able to look at our world through a lens illuminated by a much more precise understanding of how economies work and how individuals, groups, and corporations react to them. All of the disciplines of the social sciences are affected by this development but the greatest impact we can expect will be upon public policy-making. Joseph E. Stiglitz and his fellow Nobel Prize-winners have demonstrated, with the precision and force of logic, reason, and mathematics, that the folklore of what has been regarded as "political economy" for the past two hundred and thirty years has misled us with ideological and mystical but useless ideas such as "free enterprise" and the immutability of market "givens." Houseman describes and demonstrates the new resonance, liveliness, and optimism which characterize the economics of information, calling upon his own experience with "Third World" issues and problems. He also looks at this new (but often ignored) economics as a challenge to the existing literature of the social sciences and to the practices and assumptions of policy-makers, interest groups such as environmentalists, labor, and multinational corporations, "think tanks," international organizations such as the IMF and World Bank, and political activists. Effectively arguing that the changed universe of economics requires any of us concerned with world affairs to re-think and adjust our assumptions, Houseman provides us with the necessary insight to apply this new paradigm to real-world problems.

This is an important book. Anyone who notices a significant disconnect between the overblown rhetoric of big business and government and the reality that we face—like skyrocketing gasoline prices, the loss of middle class America, and increasing burdens on the poor—should read this book. Gerald Houseman clearly and concisely makes the case that Joseph Stiglitz is an important and prescient economist who champions the economics of information and exposed the term "Free Enterprise" as the fraud that justifies the great inequalities that exist in the world. If George Orwell's classic, 1984, troubled you, this book is for you. Houseman discusses the disturbing, Orwellian reality before us and leaves us asking ourselves: Will the great fraud of big business prevail or will truth and justice triumph?, Houseman breaks new ground, showing us that Nobel Prize-winner Joseph E. Stiglitz’s ideas reach beyond economics. Using Stiglitz’s insights, he explains why privatization and deregulation have failed and why free trade has impoverished developing nations. Lucky are we to have Houseman as our guide, as he leads us to the conclusion that the same asymmetry of information that makes markets fail also undermines democracy. Since Reagan, successive U.S. administrations have distorted the truth or kept it hidden from the public. Houseman reminds us that democracy cannot survive on spin., Explores the work of Joseph E. Stiglitz and how he and his colleagues heave helped create a breakthrough in economic theory and the study of globalization., Professor Joseph Stiglitz is well-respected in the world's less-developed nations, where we know him to be a friend. His insights and contributions need to be well-publicized because he has indeed revolutionized economics and our understanding of it. And Gerald Houseman has done us a great service not only by explaining the work of Stiglitz but by showing us its implications for the world.

Gerald L. Houseman is professor emeritus of political science at Indiana University, Fort Wayne.