Episode Summary
Executive Summary: In this year-end episode of Pitchfork Economics, hosts Nick Hanauer and Goldie Goldstein discuss the best and most important economics books of the year, critiquing mainstream works like 'Abundance' while highlighting alternatives that focus on inequality, middle-out economics, and the flaws in traditional economic theory. They emphasize that true economic growth comes from a strong middle class and fair distribution, not trickle-down policies.
Main Topics: Critique of 'Abundance' by Ezra Klein and David Thompson: Goldie criticizes the book for being a political rather than economic argument, arguing it ignores how inequality drives housing unaffordability and that distribution is key to solving abundance issues. Inshittification and Platform Decay: Discussion of Cory Doctorow's concept of 'enshittification' where platforms like Twitter become worse as monopolists prioritize profits over user experience, exemplified by Elon Musk's takeover. Thomas Piketty's Three New Books on Inequality: Overview of Piketty's 2024 releases: 'Equality is a Struggle', 'Nature, Culture, and Inequality', and 'Equality: What It Means and Why It Matters', each addressing inequality from different angles. GDP Critique and Diane Coyle's 'The Measure of Progress': Goldie explains how GDP is a flawed, constructed metric that ignores what truly matters, and that the concept of 'the economy' itself is a 20th-century invention. Historical Blueprint: The Garland Fund: Paul highlights John Fabian Witt's book about Charles Garland's 1922 million-dollar investment that helped create the New Deal, offering a model for using wealth to empower the middle class. Ricardo's Dream and the Flaws of Economic Theory: Goldie reviews Nat Dyer's book on how David Ricardo's comparative advantage theory, based on unrealistic assumptions, led economics astray by prioritizing elegant models over real-world complexity. Honorable Mentions and Rereads: Goldie and Paul recommend 'Gardens of Democracy', 'The Communist Manifesto', 'Why Information Grows', Robert Reich's memoir, and Liz Pelly's 'Mood Machine' on Spotify's exploitation of artists.
Key Arguments: Middle-out economics: The middle class is the source of growth, not its consequence. Trickle-down economics has failed over the last five decades, leading to rising inequality and political instability. Abundance cannot be achieved without addressing distribution; inequality drives housing crises. GDP is a constructed metric that measures the wrong things and ignores what truly matters for well-being. Economic theories like comparative advantage are based on unrealistic assumptions and ignore real-world consequences. Platform enshittification results from monopolistic power, where companies degrade user experience to extract profits. Historical examples like the Garland Fund show that targeted investment in progressive ideas can reshape society.
Data Points: Number of books published by Thomas Piketty in 2024: 3 - Piketty published three books this year: 'Equality is a Struggle', 'Nature, Culture, and Inequality', and 'Equality: What It Means and Why It Matters'. Garland Fund initial investment: $1 million - Charles Garland received a $1 million inheritance in 1922 and invested it in progressive causes that helped shape the New Deal. Percentage of Goldie's book completed: 65% - Goldie jokes that he has written 65% of his book, while Piketty published three full books in the same time.
Pivotal Quotes: "The middle class is the source of growth, not its consequence." — Nick Hanauer (via intro): Opening statement of the podcast, summarizing the core philosophy of middle-out economics. "Audiobooks totally count. I'm saying it now. Audiobooks count. You might not remember them the same way as a print book, but I think that audiobooks are totally count as reading books, and I think that it's regressive to say otherwise." — Paul Constant: Paul defends audiobooks as valid reading, responding to Goldie's earlier comment about reading a physical book. "The whole idea of there being an economy is a 20th century idea." — Goldie Goldstein: Goldie explains Diane Coyle's argument that 'the economy' is a constructed concept, not an objective reality.
Implications: Listeners should critically evaluate mainstream economic narratives and consider books that challenge trickle-down thinking. The episode encourages a shift toward middle-out policies and highlights the importance of distribution, regulation, and historical lessons for building a fairer economy.
From the Episode
The rising inequality and growing political instability that we see today are the direct result of decades of bad economic theory. The last five decades of trickle-down economics haven't worked. But what's the alternative? Middle-out economics is the answer. Because the middle class is the source of growth, not its consequence. That's right. This is Pitchfork Economics with Nick Hanauer, a podcast about how to build the economy from the middle out. Welcome to the show. David Goldie Goldstein, how are you? Paul Bobby Constant. How am I? You know, I'm insidified. We'll get to that. I'm feeling a little inshittified. The whole world is feeling insidified to me right now. But happy holidays. Indeed. Happy holidays to you. And, you know, we didn't do a summer reading episode this year because we were doing the Back to Basics series and So, I thought it would be fun to do a sort of best-of-year-in economics books episode for the end of the year. Maybe give people some book buying ideas because I think that books are the best holiday gift imaginable. So, are you down to play this game, Goldie? Sure. I actually read a book with my eyes this year because it wasn't available as an audiobook. Yeah, why not? Sure, you're the book person. We'll let you lead this.
Pan. Well, maybe we can do this again next summer, then, Paul. So maybe I'll actually read some books this year. You know, audiobooks totally count. I'm saying it now. Audiobooks count. You might not remember them the same way as a print book, but I think that audiobooks are totally count as reading books, and I think that it's regressive to say otherwise. Yeah, and my dog agrees with you because she'd much rather be out walking with me while I'm listening to a Book than just to sit there at my feet while I'm on the couch. Happy holidays, Rita. And of course, we will provide links in the show notes. To all of these books, if you can't pick them up at your local independent bookstore, we have links to bookshop.org, which is a great service that also shares profits with independent bookstores if you can't make it out to one in your community.
Management is powerful in and of itself and needs to be examined. That we've created it. And in fact, as she points out in the book, the whole idea of there being an economy is a 20th century idea. We didn't, you know, you've used the term political economy a couple times here. That was the old 18th, 19th century word. We have this idea of economics, and even once that was coined, we still didn't think of this of any. Economy as separate from politics and culture. And that is part of the problem of GDP: it measures the price of things that we produce and sell, as opposed to things that really matter. And we measure it that way because it's really hard to measure and quantify the things that matter. For the last book on the list, I wanted to talk about a historical book that I think is.
About Pitchfork Economics
We are living through a paradigm shift from trickle-down neoliberalism to middle-out economics — a new understanding of who gets what and why. Join zillionaire class-traitor Nick Hanauer and some of the world’s leading economic and political thinkers as they explore the latest thinking on how the economy actually works.